Following are selected income statement data for two companies, Pfizer (pharmaceutical company) and TJX Companies (clothing retailer),
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Following are selected income statement data for two companies, Pfizer (pharmaceutical company) and TJX Companies (clothing retailer), for the fiscal year 2018.
Income Statement ($ millions) | Pfizer | TJX Companies |
---|---|---|
Sales | $53,647 | $38,973 |
Cost of goods sold | 11,248 | 27,831 |
Gross profit | 42,399 | 11,142 |
Total expenses | 31,211 | 8,082 |
Net income | $11,188 | $3,060 |
Balance Sheet ($ millions) | Pfizer | TJX Companies |
---|---|---|
Current assets | $49,926 | $8,469 |
Long-term assets | 109,496 | 5,857 |
Total assets | $159,422 | $14,326 |
Current liabilities | $31,858 | $5,531 |
Long-term liabilities | 63,806 | 3,746 |
Total liabilities | 95,664 | 9,277 |
Stockholders’ equity | 63,758 | 5,049 |
Total liabilities and equity | $159,422 | $14,326 |
a. Compare gross profit and net income as a percentage of sales for these two companies.
b. Compare sales versus total assets.
Pfizer | TJX Companies | |
---|---|---|
Sales versus total assets | Answer | Answer |
Based on the calculation above, can you conclude that one company is more capital intensive than the other?
c. Which company has the higher percentage of total liabilities to stockholders’ equity?
Pfizer | TJX Companies | |
---|---|---|
Total liabilities to stockholders' equity | Answer | Answer |
Based on the calculation above, can you conclude that one company is riskier than the other?
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