As a recently hired loan officer for USA Bank, your job description includes evaluating and recommending approval of commercial, real estate, or credit loans. USA has a policy of having its new hires go through a training exercise that includes evaluating a hypothetical loan application from a major corporation. The first step in the exercise is to peruse the financial statements of the chosen company, looking for trends in debt financing and in risk and profitability ratios for recent years. For this task, you are assigned to evaluate Macy’s Inc.

Required:
From Investor Relations at the Macy’s, Inc., (www.macys.com) website, access the company’s 10-K filing for the year ended February 1, 2020. Search or scroll to find the financial statements and related notes.
1. What is the total debt (including current liabilities and deferred taxes) reported in the balance sheet in the most recent two years?
2. Compare the total liabilities (including current liabilities and deferred taxes) with the shareholders’ equity and calculate the debt to equity ratio for the most recent two years.
3. Does Macy’s obtain more financing through notes, bonds, or commercial paper?
4. How would you describe the pattern of required debt payments over the next five years, increasing, decreasing, or exhibiting no discernable pattern?