The Gap Inc. (GPS) operates specialty retail stores under such brand names as GAP, Old Navy, and Banana Republic. The following asset and liability data (in millions) were adapted from recent financial statements. Year 2 Year 1 Current assets: Cash $1,515 $1,510 Accounts receivable 275 462 Inventory 1,889 1,928 Prepaid and other current assets 638 530 Total current assets $4,317 $4,430 Total current liabilities $2,234 $2,342 1. Compute quick assets for Years 2 and 1. 2. Compute the quick ratio for Years 2 and 1. 3. The Gap’s quick assets have _______ from Year 1 to Year
The Gap Inc. (GPS) operates specialty retail stores under such brand names as GAP, Old Navy, and Banana Republic. The following asset and liability data (in millions) were adapted from recent financial statements. Year 2 Year 1 Current assets: Cash $1,515 $1,510 Accounts receivable 275 462 Inventory 1,889 1,928 Prepaid and other current assets 638 530 Total current assets $4,317 $4,430 Total current liabilities $2,234 $2,342 1. Compute quick assets for Years 2 and 1. 2. Compute the quick ratio for Years 2 and 1. 3. The Gap’s quick assets have _______ from Year 1 to Year
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Gap Inc. (GPS) operates specialty retail stores under such brand names as GAP, Old Navy, and Banana Republic. The following asset and liability data (in millions) were adapted from recent financial statements.
| Year 2 | Year 1 | ||||
| Current assets: | |||||
| Cash | $1,515 | $1,510 | |||
| |
275 | 462 | |||
| Inventory | 1,889 | 1,928 | |||
| Prepaid and other current assets | 638 | 530 | |||
| Total current assets | $4,317 | $4,430 | |||
| Total current liabilities | $2,234 | $2,342 |
1. Compute quick assets for Years 2 and 1.
2. Compute the quick ratio for Years 2 and 1.
3. The Gap’s quick assets have _______ from Year 1 to Year
2. Its quick ratio ______ from fill ______ in Year 1 to ______ in Year 2. Overall, The Gap’s liquidity position has _______ from Year 1 to Year 2.
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