A recent annual report issued by The Gap, Inc., revealed the following data: The companys income statement

Question:

A recent annual report issued by The Gap, Inc., revealed the following data:

                     

The company’s income statement reported total annual revenue of $14.5 billion and net income for the year of $833 million.
Instructions
a. Evaluate The Gap’s profitability by computing its net income percentage and its return on equity for the year.
b. Evaluate The Gap’s liquidity by computing its working capital and its current ratio at the beginning of the year and at the end of the year.
c. Does The Gap, Inc., appear to be both profitable and liquid? Explain.

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Financial and Managerial Accounting the basis for business decisions

ISBN: 978-0078025778

17th edition

Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello

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