Question: This and similar cases in each chapter are based on the financial statements of Pier 1 Imports, Inc., given in Appendix B at the end

This and similar cases in each chapter are based on the financial statements of Pier 1 Imports, Inc., given in Appendix B at the end of this book. As you work with Pier 1, you will develop the ability to analyze the financial statements of actual companies.
Required
1. Write Pier 1's accounting equation at the end of 2006 (express all items in millions and round to the nearest $1 million). Does Pier 1's financial condition look strong or weak?
How can you tell?
2. What was the result of Pier 1's operations during 2006? Identify both the name and the dollar amount of the result of operations for 2006. Does an increase (decrease) signal good news or bad news for the company and its stockholders?
3. Examine retained earnings on the balance sheet and on the statement of stockholders' equity. What caused retained earnings to decrease during 2006?

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