A recent annual report issued by The Gap, Inc., revealed the following data.

The company’s income statement reported total annual revenue of $15.855 billion and net income for the year of $0.848 billion.

Instructions 

a. Evaluate The Gap’s profitability by computing its net income percentage and its return on equity for the year. 

b. Evaluate The Gap’s liquidity by computing its working capital and its current ratio at the beginning of the year and at the end of the year. c. Does The Gap, Inc., appear to be both profitable and liquid? Explain.

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Current assets. Current llabilities. Stockholders' equlty..... End of Year $4.568 billion $2.461 billion $3.144 billion Beginning of Year $4.315 billion $2.453 billion $2.904 billion