Safeway At the start of this chapter you learned a little about Safeway and its history. Now let’s take a look at the company’s financial performance in recent years. Refer back to Safeway’s income statement (on page 40), the balance sheet (on page 36), and the statement of cash flows (on page 44).

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 2004 to 2005? What was the primary reason for the change?

2. Divide gross profit by sales for 2004 and 2005. For which year is the gross profit percentage higher? What does that change represent?

3. In 2005, did Safeway generate enough cash from operations to fund all of its investing activities? Looking at the financing activities section of the statement of cash flows, would you predict that long-term debt on the balance sheet went up or down in 2005?