Toys R Us declared Chapter 11 bankruptcy protection in September 2017, for its US operations. The...

 

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Toys "R" Us declared Chapter 11 bankruptcy protection in September 2017, for its US operations. The toy retailer is seeking to restructure or remove some of its debts. Toys "R" Us is also looking to take similar actions for its Canadlan operations. Here are the two most recent Toys "R" Us balance sheets. Toys "R" Us, Inc. and Subsidiaries Consolidated Balance Sheets Condensed and adapted for educational use In millions Fiscal year ending 1/28/2017 1/30/2016 ASSETS Current assets: Cash and cash equivalents 566 $ 680 Accounts and other receivables 255 225 Merchandise inventories 2,476 2,270 Other current assets 92 113 Total current assets $ 3,389 $ 3,288 Property and equipment, net 3,067 3,163 Other assets 452 459 Total assets $ 6,908 $ 6,910 LIABLITIES AND EQUITY $ 2,738 $ 2,798 4,612 Current liabilities Long-term debt 4,642 Other non-current liabilities 820 765 $ 8,200 $ 8,175 (1,292) (1,265) $ 6,908 $ 6,910 Total liabilities Total stockholders' equity (deficit) Total liabilities and equity Discussion Questions 1, Calculate the Toys “R" Us current ratio for the most recent two years. Interpret these ratios. 2. Calculate the Toys "R" Us quick ratio for the most recent two years. Interpret these ratios. How does the quick ratio compare to the current ratio? 3. Calculate the Toys "R" Us debt ratio for the most recent two years. Interpret these ratios. 4. Why is total stockholders' equity negative? Toys "R" Us declared Chapter 11 bankruptcy protection in September 2017, for its US operations. The toy retailer is seeking to restructure or remove some of its debts. Toys "R" Us is also looking to take similar actions for its Canadlan operations. Here are the two most recent Toys "R" Us balance sheets. Toys "R" Us, Inc. and Subsidiaries Consolidated Balance Sheets Condensed and adapted for educational use In millions Fiscal year ending 1/28/2017 1/30/2016 ASSETS Current assets: Cash and cash equivalents 566 $ 680 Accounts and other receivables 255 225 Merchandise inventories 2,476 2,270 Other current assets 92 113 Total current assets $ 3,389 $ 3,288 Property and equipment, net 3,067 3,163 Other assets 452 459 Total assets $ 6,908 $ 6,910 LIABLITIES AND EQUITY $ 2,738 $ 2,798 4,612 Current liabilities Long-term debt 4,642 Other non-current liabilities 820 765 $ 8,200 $ 8,175 (1,292) (1,265) $ 6,908 $ 6,910 Total liabilities Total stockholders' equity (deficit) Total liabilities and equity Discussion Questions 1, Calculate the Toys “R" Us current ratio for the most recent two years. Interpret these ratios. 2. Calculate the Toys "R" Us quick ratio for the most recent two years. Interpret these ratios. How does the quick ratio compare to the current ratio? 3. Calculate the Toys "R" Us debt ratio for the most recent two years. Interpret these ratios. 4. Why is total stockholders' equity negative?

Answer rating: 100% (QA)

1 Calculation of current ratio for the most recent two years and interpretation Current ratio Current assets Current liabilities Year ended 1282017 Ye... View the full answer