At the end of a recent year, The Gap, Inc., reported total assets of $13,679 million, current

Question:

At the end of a recent year, The Gap, Inc., reported total assets of $13,679 million, current assets of $4,516 million, total liabilities of $10,363 million, current liabilities of $3,209 million, and stockholders’ equity of $3,316 million. What is its current ratio and what does this suggest about the company?
a. The ratio of 1.32 suggests that The Gap has liquidity problems.
b. The ratio of 1.41 suggests that The Gap has sufficient liquidity.
c. The ratio of 1.32 suggests that The Gap has greater current assets than current liabilities.
d. The ratio of 1.41 suggests that The Gap is not able to pay its short-term obligations with current assets.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Financial Accounting

ISBN: 9781264229734

11th Edition

Authors: Robert Libby, Patricia Libby, Frank Hodge

Question Posted: