At the end of a recent year, the gap inc. reported total assets of 7,422 million, current assets as 4,309 million, total liabilities of 4,667, current liabilities of 2,128 million, and stockholder's equity of 2,775 million. What is the current ratio and what does this suggest about the company
At the end of a recent year, the gap inc. reported total assets of 7,422 million, current assets as 4,309 million, total liabilities of 4,667, current liabilities of 2,128 million, and stockholder's equity of 2,775 million. What is the current ratio and what does this suggest about the company
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of a recent year, the gap inc. reported total assets of 7,422 million, current assets as 4,309 million, total liabilities of 4,667, current liabilities of 2,128 million, and
a. The ratio of 1.59 suggests that the Gap has liquidity problems
b. The ratio of 2.02 suggests that The Gap has sufficient liquidity
c. The ratio of 1.59 suggests that The Gap has greater current assets than current liabilities
d. The ratio of 2.02 suggests that The Gap is not able to pay its short-term obligations with current assets
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