At the start of this chapter, you learned a little about Safeway and its history. Now lets

Question:

At the start of this chapter, you learned a little about Safeway and its history. Now let’s look at the company’s financial performance in recent years. Refer to Safeway’s income statement (on page 35), the (on page 30), and the statement of cash flows (on page 39). Based on information contained in these financial statements, answer the following questions:
1. As a percentage of total assets, did current assets increase or decrease from 2007 to 2008? What was the primary reason for the change?
2. Divide gross profit by sales for 2007 and 2008. For which year is the gross profit percentage higher? What does that change represent?
3. In 2008, did Safeway generate enough cash from operations to fund all of its investing activities? Did Safeway generate enough cash from operations to cover both its investing and its financing activities?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...