Refer to the Foot Locker, Inc., financial statements in Appendix B at the end of the book.

Question:

Refer to the Foot Locker, Inc., financial statements in Appendix B at the end of the book. Suppose you are an investor considering buying Foot Locker, Inc., common stock. The following questions are important: Show amounts in millions and round to the nearest $1 million.

1. Explain whether Foot Locker, Inc., had more sales revenue, or collected more cash from customers, during 2007. Why is accounts receivable missing from its balance sheet? (Challenge)

2. Investors are vitally interested in a company’s sales and profits, and its trends of sales and profits over time. Consider Foot Lockers sales and net income (net loss) during the period from 2005 through 2007. Compute the percentage increase or decrease in net sales and also in net income (net loss) from 2005 to 2007. Which item grew faster during this two-year period, net sales or net income (net loss)? Can you offer a possible explanation for these changes? (Challenge)

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...