This and similar cases in each chapter are based on the consolidated financial statements of Foot Locker, Inc., given in Appendix B at the end of this book. As you work with Foot Locker, Inc., you will develop the ability to analyze the financial statements of actual companies.

Requirements

1. Write Foot Locker, Inc.’s accounting equation at February 2, 2008, the end of fiscal 2007 (express all items in millions and round to the nearest $1 million). Does Foot Locker, Inc.’s financial condition look strong or weak? How can you tell?

2. What was the result of Foot Locker, Inc.’s operations during fiscal 2007? Identify both the name and the dollar amount of the result of operations for fiscal 2007. Does an increase (decrease) signal good news or bad news for the company and its stockholders?

3. Examine retained earnings in the Consolidated Statements of Shareholders Equity. What caused retained earnings to increase during fiscal 2007?

4. Which statement reports cash as part of Foot Locker, Inc.’s financial position? Which statement tells why cash increased (or decreased) during the year? What two individual items caused Foot Locker, Inc’s cash to change the most during fiscal 2007?