Hmw1 Essay

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Part I: Case study: Gap Inc. (5 points) Using the fiscal 2011 (year end Jan 28, 2012) 10k for Gap Inc., answer the following questions. Be sure to provide well-written answers that are clearly supported. 1. What was Gap’s Total Assets at the fiscal yearend of 2011? $7,422.00 What was its Total Liabilities? $2,128.00 + $2,539.00 = $4,667.00 What was the largest asset of Gap in the year 2011? Property and equipment, net ($2,523.00) 2. What was Gap’s current ratio for the year 2011? Current Ratio 2011 = Current Assets / Current liabilities Gaps Current Ratio = 4,309 / 2,128 = 2.0249 This means that The Gap Inc. is capable of paying its short-term liabilities two times by selling its current assets. What was the current ratio for 2010? How did the current ratio change? Current Ratio 2010 = 3,926 / 2,095 = 1.8739 The current Ratio for The Gap Inc. Increase from 1.8739 to 2.0249 What is the implication of that change? The current ratio increased because there was a considerable increase in Cash and other current assets. Meanwhile, current liabilities remained unchanged. 3. What was the Net Sales in 2011, 2010, and 2009? How does Net Sales change during these three years? What could be the reason for the change in Net Sales in 2011? According to the Risk factors mentioned in the Financial Statements, factors such as current economic conditions, timing of new merchandise releases and promotional events, changes in merchandise mix, success of marketing programs, and weather conditions are the main factors that affect sales in a company such as The Gap Inc. 4. What was the change of Retained Earnings from the year 2010 to 2011? Retained earnings increase by $597.00 they raised from $11,767.00 to $12,364.00, an increase approximately of 5.07% And what was the Net Income for the year 2011? The Net income for

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