Interpreting Financial Reports: Comparison of ProfitabilityTwo of the largest chains of clothing stores in the United States are The Gap, Inc., and Abercrombie & Fitch Co. In fiscal 2011, Gap had net income of $833 million, and Abercrombie & Fitch Co. had net income of $128 million. It is difficult to judge from these figures alone which company is more profitable because they do not take into account the relative sales, sizes, and investments of the companies. Data (in millions) needed to complete financial analysis of the two companies follow:Gap:net sales: $14,549Beginning Total Assets: 7,065Ending total assets 7,422Beginning total liabilities 2,985Ending total liabilities 4,667Beginning stockholders equity 4,080Ending stockholders equity 2,755Abercrombie & FitchNet sales 4,158Beginning Total assets: 2,941Ending total assets: 3,048Beginning total liabilities: 1,051Ending total liabilities: 1,186Beginning stockholders equity: 1,891Ending stockholders equity: 1,862figure out the following for each company!Return to assets %Debt to equity ration %Return on equity %
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