Excerpted financial information from the records of The Gap Inc., a major clothing retailer, follows (dollars in
Question:
Excerpted financial information from the records of The Gap Inc., a major clothing retailer, follows (dollars in millions):
a. Compute the current ratio for each year.
b. Compute the gross margin ((Sales - COGS)/Sales) for each year.
c. Compute inventory turnover and inventory days for 2019 and 2018; compute accounts payable turnover and accounts payable days for 2019 and 2018.
d. Comment on the company's solvency trend.
Transcribed Image Text:
2019 2018 2017 Inventory $ 2,131 $ 1,997 $ 1,830 Current assets 4,251 4,568 4,315 Accounts payable 1,126 1,181 1,243 Current liabilities 2,174 2,461 2,453 Sales 16,580 15,855 15,516 Cost of goods sold 10,258 9,789 9,876
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a The current ratio is calculated by dividing current assets by current liabilities Using the given information we get 2019 42512174 195 2018 45682461 ...View the full answer
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