Suppose Nordstrom, Inc., which operates department stores in numerous states, has the following selected financial statement data for a recent year.

For the year, net sales were $8,258 and cost of goods sold was $5,328 (in millions).

Instructions

(a) Compute the four liquidity ratios at the end of the year.

(b) Using the data in the chapter, compare Nordstrom’s liquidity with (1) that of Macy’s, Inc., and (2) the industry averages for department stores.

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NORDSTROM, INC. Balance Sheet (partial) (in millions) Cash and cash equivalents Accounts receivable (net) Inventory Prepaid expenses Other current assets Beginning-of-Year $ 72 End-of-Year $ 795 2,035 898 1,942 900 88 93 238 210 Total current assets $4,054 $3,217 Total current liabilities $2,014 $1,601