The Foot Locker, Inc. (FL) and The Finish Line, Inc. (FINL) are two retail athletic footwear chains. The current assets and current liabilities from recent balance sheets for both companies are as follows (in millions):

a. Compute the working capital for Year 2 and Year 1 for each company.
b. Compute the current ratio for Year 2 and Year 1 for each company. Round to one decimal place.
c. If you were a supplier to these two companies, in which company would you feel most confident about receiving payment?
d. For each company, did liquidity improve or decline between the two years?

Transcribed Image Text:

The Finish Line Year 2 Year 1 $521 221 Foot Locker Year 2 Year 1 Current assets $2,456 $531 $531 191 $2,606 Current liabilities 700 696