Two of the largest chains of grocery stores in the U.S. are Albertson's, Inc. and A & P. In a recent fiscal
year, Albertson's had a net income of $765 million, and A & P had a net income of $14 million. It is difficult to judge which company is more profitable from those figures alone because they do not take into account the relative sales, sizes, and investments of the companies. Data (in millions) needed to complete a financial analysis of the two companies follow. Albertson's A & P Net sales $36,762 $10,151 Beginning total assets 15,719 3,335 Ending total assets 16,079 3,309 Beginning total liabilities 10,017 2,489 Ending total liabilities 10,394 2,512 Beginning stockholders equity 5,702 846 Ending stockholders' equity 5,684 797 Please determine which company was more profitable by computing profit margin, asset turnover, return on assets, debt to equity ratio, and return on equity for the two companies. Comment on the relative profitability of the two companies.
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