Presented below are condensed financial statements adapted from those of two actual companies competing in the pharmaceutical industryJohnson and Johnson (J&J) and Pfizer, Inc. ($ in millions, except per share amounts).

Balance Sheets ($ in millions, except per share data)
	J&J			Pfizer
Assets:
Cash	$	5,377		$	1,520
Short-term investments		4,146			10,432
Accounts receivable (net)		6,574			8,775
Inventories		3,588			5,837
Other current assets		3,310			3,177
Current assets		22,995			29,741
Property, plant, and equipment (net)		9,846			18,287
Intangibles and other assets		15,422			68,747
Total assets	$	48,263		$	116,775
Liabilities and Shareholders' Equity:
Accounts payable	$	4,966		$	2,601
Short-term notes		1,139			8,818
Other current liabilities		7,343			12,238
Current liabilities		13,448			23,657
Long-term debt		2,955			5,755
Other long-term liabilities		4,991			21,986
Total liabilities		21,394			51,398
Capital stock (par and additional paid-in capital)		3,120			67,050
Retained earnings		30,503			29,382
Accumulated other comprehensive income (loss)		(590	)		195
Less: Treasury stock and other equity adjustments		(6,164	)		(31,250	)
Total shareholders' equity		26,869			65,377
Total liabilities and shareholders' equity	$	48,263		$	116,775
Income Statements
Net sales	$	41,862		$	45,188
Cost of goods sold		12,176			9,832
Gross profit		29,686			35,356
Operating expenses		19,763			28,486
Other (income) expensenet		(385	)		3,610
Income before taxes		10,308			3,260
Tax expense		3,111			1,621
Net income	$	7,197		$	1,639	*
Basic net income per share	$	2.42		$	0.22

*	This is before income from discontinued operations.

Evaluate and compare the two companies by responding to the following questions.

Note: Because two-year comparative statements are not provided, you should use year-end balances in place of average balances as appropriate.

Required:

1-a.	Compute the receivables turnover for both the companies. (Round your answers to 2 decimal places.) 1-b. Compute the average collection for both the companies. (Consider 365 days a year. Round your answers to the nearest whole number.)

1-c.

Which of the two companies appears more efficient in collecting its accounts receivable? 1-d. Compute the inventory turnover for both the companies. (Round your answers to 2 decimal places.) 1-e. Compute the average days in inventory for both the companies. (Consider 365 days a year. Round your answers to the nearest whole number.) 1-f. Which of the two companies appears more efficient in managing its inventory?

2-a.

Compute the rate of return on assets for both the companies. (Round your percentage answers to 1 decimal place.)

2-b. Which of the two firms had greater earnings relative to resources available? 3-a. Compute the profit margin, asset turnover and return on assets. (Do not round intermediate calculations. The expected format for rounding is presented in each row of the table.) 3-b. Have the two companies achieved their respective rates of return on assets with similar combinations of profit margin and turnover? 4-a. Compute the rate of return on shareholders equity for both the companies. (Round your percentage 4-b. From the perspective of a common shareholder, which of the two firms provided a greater rate of return? 5. Compute the equity multiplier shareholders equity for both the companies. (Round your answers to 2 decimal places.)