GPS common size balance sheet GAP Inc Dollar amounts in Millions Percentages Consolidated Balance Sheets Feb 03, 2024 Jan 28, 2023 Feb 03, 2024 Jan 28, 2023 Current assets Cash and cash equivalents $ 1,873 $ 1,215 16 96 10 67 Merchandise inventory 1,995 2,389 18 06 20 98 Other current assets 527 1,013 4 77 8 90 Total current assets $ 4,395 $ 4,617 39 80 40 55 Long term assets Property and equipment, net of accumulated depreciation 2,566 2,688 23 23 23 61 Operating lease assets 3,115 3,173 28 21 27 87 Other long term assets 968 908 8 76 7 97 Total assets $ 11,044 $ 11,386 100 00 100 00 Current liabilities Accounts payable 1,349 1,320 12 21 11 59 Accrued expenses and other current liabilities 1,108 1,219 10 03 10 71 Current portion of operating lease liabilities 600 667 5 43 5 86 Income taxes payable 39 50 0 35 0 44 Total current liabilities $ 3,096 $ 3,256 28 03 28 60 Long term liabilities Line of Credit Facility, Amount Outstanding 0 350 0 00 3 07 Long term debt 1,488 1,486 13 47 13 05 Long term operating lease liabilities 3,353 3,517 30 36 30 89 Other long term liabilities 512 544 4 64 4 78 Total long term liabilities $ 5,353 $ 5,897 48 47 51 79 Stockholders' equity Common stock $0 05 par value, Authorized 2,300 shares for all periods presented 19 18 0 17 0 16 Additional Paid in Capital 113 27 1 02 0 24 Retained earnings 2,420 2,140 21 91 18 80 Accumulated other comprehensive income 43 48 0 39 0 42 Total stockholders' equity $ 2,595 $ 2,233 23 50 19 61 Total liabilities and stockholders' equity $ 11,044 $ 11,386 100 00 100 00 TJX common size balance sheets TJX Companies Inc Dollar amounts in Millions Percentages CONSOLIDATED BALANCE SHEETS Feb 03, 2024 Jan 28, 2023 Feb 03, 2024 Jan 28, 2023 Current assets Cash and cash equivalents $ 5,600 $ 5,477 18 83 19 32 Accounts receivable, net 529 563 1 78 1 99 Merchandise inventories 5,965 5,819 20 05 20 53 Prepaid expenses and other current assets 511 478 1 72 1 69 Federal, state and foreign income taxes recoverable 59 119 0 20 0 42 Total current assets $ 12,664 $ 12,456 42 57 43 94 Net property at cost 6,571 5,783 22 09 20 40 Non current deferred income taxes, net 172 158 0 58 0 56 Operating lease right of use assets 9,396 9,086 31 59 32 05 Goodwill 95 97 0 32 0 34 Other assets 849 769 2 85 2 71 Total assets $ 29,747 $ 28,349 100 00 100 00 Current liabilities Accounts payable $ 3,862 $ 3,794 12 98 13 38 Accrued expenses and other current liabilities 4,870 4,346 16 37 15 33 Current portion of operating lease liabilities 1,620 1,610 5 45 5 68 Current portion of long term debt 0 500 0 00 1 76 Federal, state and foreign income taxes payable 99 55 0 33 0 19 Total current liabilities $ 10,451 $ 10,305 35 13 36 35 Long term liabilities Other long term liabilities 924 919 3 11 3 24 Non current deferred income taxes, net 148 127 0 50 0 45 Long term operating lease liabilities 8,060 7,775 27 10 27 43 Long term debt 2,862 2,859 9 62 10 09 Total long term liabilities $ 11,994 $ 11,680 40 32 41 20 Shareholders' equity Common stock, authorized 1,800,000,000 shares, par value $1, issued and outstanding 1,133,586,545 and 1,155,437,908 shares, respectively 1,134 1,155 3 81 4 07 Additional paid in capital 0 0 0 00 0 00 Accumulated other comprehensive (loss) income (532) (606) 1 79 0 00 Retained earnings 6,700 5,815 22 52 20 51 Total shareholders' equity $ 7,302 $ 6,364 24 55 22 45 Total liabilities and shareholders' equity $ 29,747 $ 28,349 100 00 100 00 GPS common size St of operations GAP Inc Common Size Statements of Operations 12 Months Ended Percentages Feb 03, 2024 Jan 28, 2023 Jan 29, 2022 Feb 03, 2024 Jan 28, 2023 Jan 29, 2022 Net sales $ 14,889 $ 15,616 $ 16,670 100 00 100 00 100 00 Cost of goods sold and occupancy expenses 9,114 10,257 10,033 61 21 65 68 60 19 Gross profit 5,775 5,359 6,637 38 79 34 32 39 81 Operating expenses 5,215 5,428 5,827 35 03 34 76 34 96 Operating income (loss) 560 (69) 810 3 76 0 44 4 86 Loss on extinguishment of debt 0 0 325 0 00 0 00 1 95 Interest expense 90 88 167 0 60 0 56 1 00 Interest income (86) (18) (5) 0 58 0 12 0 03 Income (Loss) from Continuing Operations before Income Taxes 556 (139) 323 3 73 0 89 1 94 Income tax expense 54 63 67 0 36 0 40 0 40 Net income (loss) $ 502 $ (202) $ 256 3 37 1 29 1 54 TJX common size St of operations TJX Companies Inc Common Size Statements of Operations 12 Months Ended Percentages Feb 03, 2024 Jan 28, 2023 Jan 29, 2022 Feb 03, 2024 Jan 28, 2023 Jan 29, 2022 Net sales $ 54,217 $ 49,936 $ 48,550 100 00 100 00 100 00 Cost of sales, including buying and occupancy costs 37,951 36,149 34,714 70 00 72 39 71 50 Gross Profit 16,266 13,787 13,836 30 00 27 61 28 50 Selling, general and administrative expenses 10,469 8,927 9,081 19 31 17 88 18 70 Operating income 5,797 4,860 4,755 10 69 9 73 9 79 Impairment on equity investment 0 218 0 0 00 0 44 0 00 Loss on early extinguishment of debt 0 0 242 0 00 0 00 0 50 Interest (income) expense, net (170) 6 115 0 31 0 01 0 24 Income before income taxes 5,967 4,636 4,398 11 006 9 28 9 06 Provision for income taxes 1,493 1,138 1,115 2 75 2 28 2 30 Net income $ 4,474 $ 3,498 $ 3,283 8 25 7 00 6 76 Ratio Computations GAP Inc TJX Companies Inc in Millions Total Assets 2022 $12,761 Total Assets 2022 $28,461 Please note the ratio computations in the comment box This is the same information that was included in the part 2 instructions Please let me know if you have questions Total Stockholders' equity 2022 $2,722 Total Stockholder's equity 2022 $6,003 You must use cell references from applicable worksheets to earn credit Do not type any numbers on this worksheet, since all your calculations should be cell references Feb 03, 2024 Jan 28, 2023 Feb 03, 2024 Jan 28, 2023 1 Current ratio 1 42 1 42 1 Current ratio 1 21 1 21 2 Liabilities to equity 3 25 4 09 2 Liabilities to equity 3 07 0 77 3 Times interest earned 6 22 0 78 3 Times interest earned Do not complete for this year, since company had interest income and not interest expense 4 Return on Equity shown as a percentage 20 80 0 78 4 Return on Equity shown as a percentage 65 48 56 57 5 Profit Margin Shown as a percentage 3 37 1 29 5 Profit Margin Shown as a percentage 8 25 7 00 6 Asset Turnover 1 33 1 29 6 Asset Turnover 1 87 1 76 7 Financial Leverage 4 64 4 87 7 Financial Leverage 4 25 4 60 8 Redo your Return on Equity calculation by calculating Profit Margin Asset Turnover Financial Leverage 20 80 8 15 8 Redo your Return on Equity calculation by calculating Profit Margin Asset Turnover Financial Leverage 65 48 56 57 On this Analysis worksheet, answer the following questions using the results of ratio analysis and common size vertical analyses to explain your answer You grade is based on you applying financial analysis to the specific results you have determined throughout part 2 I am not looking for generic comments you have found on a website Make sure you review the ROE Disaggregation of DuPont Analysis in Module 4 and Appendix 4C a Compare the common size balance sheet statements of each company Explain and identify two major differences over time and or between the companies using the common size balance sheet statement analyses You need to provide at least two common size percentages for each company in your comparison comments Explain why you picked these two items b Which company is more profitable Discuss specifically which accounts impacted profitability Provide at least two common size percentages for each company in your comparison comments Which statement are you using to make your assessment on profitability Compare the percentage of profit margin ratio over the past 2 years Have there been changes in this ratio from the past year c Explain how the Return on Equity (ROE) has changed over time Explain how the profit margin, asset turnover, and financial leverage impact ROE Provide the amount of the ratios for each of the companies in your explanation Include a discussion of changes in profit margin, asset turnover, and financial leverage Explain what each ratio is measuring You need to identify the specific company ratios you computed in 3 d Explain what liquidity means Which company is more liquid than the other company is Why You must discuss the relevant ratio(s) that support your answer to this question from the work you completed in 3 and provide the specific ratio amount you used to analyze liquidity e Explain what solvency means Which company is more solvent Why You must discuss the relevant ratios that support your answer to this question from the work you completed in 3 and provide the specific ratios amount you used to analyze solvency Reference Easton, P , Wild, J , Halsey, B , McAnally, M L (2021) Financial Managerial Accounting for MBAs (6th ed ) Cambridge Business Publishers https mybusinesscourse com ebook finman6e 12266 1 31

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Question: GPS common size balance sheet GAP Inc. Dollar amounts in Millions Percentages Consolidated Balance Sheets Feb. 03, 2024 Jan. 28, 2023 Feb. 03, 2024 Jan.

GPS common size balance sheet

GAP Inc.	Dollar amounts in Millions	Percentages
Consolidated Balance Sheets	Feb. 03, 2024	Jan. 28, 2023	Feb. 03, 2024	Jan. 28, 2023
Current assets:
Cash and cash equivalents	$ 1,873	$ 1,215	16.96%	10.67%
Merchandise inventory	1,995	2,389	18.06%	20.98%
Other current assets	527	1,013	4.77%	8.90%
Total current assets	$ 4,395	$ 4,617	39.80%	40.55%
Long-term assets:
Property and equipment, net of accumulated depreciation	2,566	2,688	23.23%	23.61%
Operating lease assets	3,115	3,173	28.21%	27.87%
Other long-term assets	968	908	8.76%	7.97%
Total assets	$ 11,044	$ 11,386	100.00%	100.00%
Current liabilities:
Accounts payable	1,349	1,320	12.21%	11.59%
Accrued expenses and other current liabilities	1,108	1,219	10.03%	10.71%
Current portion of operating lease liabilities	600	667	5.43%	5.86%
Income taxes payable	39	50	0.35%	0.44%
Total current liabilities	$ 3,096	$ 3,256	28.03%	28.60%
Long-term liabilities:
Line of Credit Facility, Amount Outstanding	0	350	0.00%	3.07%
Long-term debt	1,488	1,486	13.47%	13.05%
Long-term operating lease liabilities	3,353	3,517	30.36%	30.89%
Other long-term liabilities	512	544	4.64%	4.78%
Total long-term liabilities	$ 5,353	$ 5,897	48.47%	51.79%
Stockholders' equity:
Common stock $0.05 par value, Authorized 2,300 shares for all periods presented	19	18	0.17%	0.16%
Additional Paid in Capital	113	27	1.02%	0.24%
Retained earnings	2,420	2,140	21.91%	18.80%
Accumulated other comprehensive income	43	48	0.39%	0.42%
Total stockholders' equity	$ 2,595	$ 2,233	23.50%	19.61%
Total liabilities and stockholders' equity	$ 11,044	$ 11,386	100.00%	100.00%

TJX common size balance sheets

TJX Companies Inc.	Dollar amounts in Millions	Percentages
CONSOLIDATED BALANCE SHEETS	Feb. 03, 2024	Jan. 28, 2023	Feb. 03, 2024	Jan. 28, 2023
Current assets:
Cash and cash equivalents	$ 5,600	$ 5,477	18.83%	19.32%
Accounts receivable, net	529	563	1.78%	1.99%
Merchandise inventories	5,965	5,819	20.05%	20.53%
Prepaid expenses and other current assets	511	478	1.72%	1.69%
Federal, state and foreign income taxes recoverable	59	119	0.20%	0.42%
Total current assets	$ 12,664	$ 12,456	42.57%	43.94%
Net property at cost	6,571	5,783	22.09%	20.40%
Non-current deferred income taxes, net	172	158	0.58%	0.56%
Operating lease right of use assets	9,396	9,086	31.59%	32.05%
Goodwill	95	97	0.32%	0.34%
Other assets	849	769	2.85%	2.71%
Total assets	$ 29,747	$ 28,349	100.00%	100.00%
Current liabilities:
Accounts payable	$ 3,862	$ 3,794	12.98%	13.38%
Accrued expenses and other current liabilities	4,870	4,346	16.37%	15.33%
Current portion of operating lease liabilities	1,620	1,610	5.45%	5.68%
Current portion of long-term debt	0	500	0.00%	1.76%
Federal, state and foreign income taxes payable	99	55	0.33%	0.19%
Total current liabilities	$ 10,451	$ 10,305	35.13%	36.35%
Long-term liabilities:
Other long-term liabilities	924	919	3.11%	3.24%
Non-current deferred income taxes, net	148	127	0.50%	0.45%
Long-term operating lease liabilities	8,060	7,775	27.10%	27.43%
Long-term debt	2,862	2,859	9.62%	10.09%
Total long-term liabilities	$ 11,994	$ 11,680	40.32%	41.20%
Shareholders' equity
Common stock, authorized 1,800,000,000 shares, par value $1, issued and outstanding 1,133,586,545 and 1,155,437,908 shares, respectively	1,134	1,155	3.81%	4.07%
Additional paid-in capital	0	0	0.00%	0.00%
Accumulated other comprehensive (loss) income	(532)	(606)	-1.79%	0.00%
Retained earnings	6,700	5,815	22.52%	20.51%
Total shareholders' equity	$ 7,302	$ 6,364	24.55%	22.45%
Total liabilities and shareholders' equity	$ 29,747	$ 28,349	100.00%	100.00%

GPS common size St of operations

GAP Inc. Common Size Statements of Operations	12 Months Ended	Percentages
Feb. 03, 2024	Jan. 28, 2023	Jan. 29, 2022	Feb. 03, 2024	Jan. 28, 2023	Jan. 29, 2022
Net sales	$ 14,889	$ 15,616	$ 16,670	100.00%	100.00%	100.00%
Cost of goods sold and occupancy expenses	9,114	10,257	10,033	61.21%	65.68%	60.19%
Gross profit	5,775	5,359	6,637	38.79%	34.32%	39.81%
Operating expenses	5,215	5,428	5,827	35.03%	34.76%	34.96%
Operating income (loss)	560	(69)	810	3.76%	-0.44%	4.86%
Loss on extinguishment of debt	0	0	325	0.00%	0.00%	1.95%
Interest expense	90	88	167	0.60%	0.56%	1.00%
Interest income	(86)	(18)	(5)	-0.58%	-0.12%	-0.03%
Income (Loss) from Continuing Operations before Income Taxes	556	(139)	323	3.73%	-0.89%	1.94%
Income tax expense	54	63	67	0.36%	0.40%	0.40%
Net income (loss)	$ 502	$ (202)	$ 256	3.37%	-1.29%	1.54%

TJX common size St of operations

TJX Companies Inc. Common Size Statements of Operations	12 Months Ended	Percentages
Feb. 03, 2024	Jan. 28, 2023	Jan. 29, 2022	Feb. 03, 2024	Jan. 28, 2023	Jan. 29, 2022
Net sales	$ 54,217	$ 49,936	$ 48,550	100.00%	100.00%	100.00%
Cost of sales, including buying and occupancy costs	37,951	36,149	34,714	70.00%	72.39%	71.50%
Gross Profit	16,266	13,787	13,836	30.00%	27.61%	28.50%
Selling, general and administrative expenses	10,469	8,927	9,081	19.31%	17.88%	18.70%
Operating income	5,797	4,860	4,755	10.69%	9.73%	9.79%
Impairment on equity investment	0	218	0	0.00%	0.44%	0.00%
Loss on early extinguishment of debt	0	0	242	0.00%	0.00%	0.50%
Interest (income) expense, net	(170)	6	115	-0.31%	0.01%	0.24%
Income before income taxes	5,967	4,636	4,398	11.006%	9.28%	9.06%
Provision for income taxes	1,493	1,138	1,115	2.75%	2.28%	2.30%
Net income	$ 4,474	$ 3,498	$ 3,283	8.25%	7.00%	6.76%

Ratio Computations

	GAP Inc.		TJX Companies Inc.
in Millions	Total Assets 2022	$12,761	Total Assets 2022	$28,461		Please note the ratio computations in the comment box. This is the same information that was included in the part 2 instructions. Please let me know if you have questions.
	Total Stockholders' equity 2022	$2,722	Total Stockholder's equity 2022	$6,003		***You must use cell references from applicable worksheets to earn credit. Do not type any numbers on this worksheet, since all your calculations should be cell references.

	Feb. 03, 2024	Jan. 28, 2023		Feb. 03, 2024	Jan. 28, 2023
1. Current ratio	1.42	1.42	1. Current ratio	1.21	1.21
2. Liabilities-to-equity	3.25	4.09	2. Liabilities-to-equity	3.07	0.77
3. Times interest earned	6.22	-0.78	3. Times interest earned	Do not complete for this year, since company had interest income and not interest expense
4. Return on Equity -shown as a percentage	20.80%	-0.78%	4. Return on Equity -shown as a percentage	65.48%	56.57%
5. Profit Margin-Shown as a percentage	3.37%	-1.29%	5. Profit Margin-Shown as a percentage	8.25%	7.00%
6. Asset Turnover	1.33	1.29	6. Asset Turnover	1.87	1.76
7. Financial Leverage	4.64	4.87	7. Financial Leverage	4.25	4.60
8. Redo your Return on Equity calculation by calculating Profit MarginAsset TurnoverFinancial Leverage.	20.80%	-8.15%	8. Redo your Return on Equity calculation by calculating Profit MarginAsset TurnoverFinancial Leverage.	65.48%	56.57%

On this Analysis worksheet, answer the following questions using the results of ratio analysis and common-size vertical analyses to explain your answer.You grade is based on you applying financial analysis to the specific results you have determined throughout part 2.I am not looking for generic comments you have found on a website. Make sure you review the ROE Disaggregation of DuPont Analysis in Module 4 and Appendix 4C.

a.Compare the common-size balance sheet statements of each company. Explain and identify two major differences over time and/or between the companies using the common-size balance sheet statement analyses. You need to provide at least two common-size percentages for each company in your comparison comments. Explain why you picked these two items.

b. Which company is more profitable? Discuss specifically which accounts impacted profitability. Provide at least two common-size percentages for each company in your comparison comments. Which statement are you using to make your assessment on profitability? Compare the percentage of profit margin ratio over the past 2 years. Have there been changes in this ratio from the past year?

c. Explain how the Return on Equity (ROE) has changed over time? Explain how the profit margin, asset turnover, and financial leverage impact ROE. Provide the amount of the ratios for each of the companies in your explanation. Include a discussion of changes in profit margin, asset turnover, and financial leverage. Explain what each ratio is measuring. You need to identify the specific company ratios you computed in #3.

d. Explain what liquidity means. Which company is more liquid than the other company is? Why? You must discuss the relevant ratio(s) that support your answer to this question from the work you completed in #3 and provide the specific ratio amount you used to analyze liquidity.

e. Explain what solvency means. Which company is more solvent? Why? You must discuss the relevant ratios that support your answer to this question from the work you completed in #3 and provide the specific ratios amount you used to analyze solvency.

Reference

Easton, P., Wild, J., Halsey, B., & McAnally, M. L. (2021). Financial & Managerial Accounting for MBAs (6th ed.). Cambridge Business

Publishers.https://mybusinesscourse.com/ebook/finman6e/12266/1-31

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