Nordstrom, Inc. operates department stores in numerous states. Selected financial statement data for the year ending January 30, 2010, are shown below.

Nordstrom, Inc.

Balance Sheet (partial)

(in millions) End-of-Year Beginning-of-Year Cash and cash equivalents $ 795 A of Accounts receivable (net) 2,035 1,942 Merchandise inventory 898 900 Prepaid expenses 88 CE Other current assets 238 210 Total current assets $4,054 S327 Total current liabilities $2,014 $1,601 For the year, net sales were $8,258 and cost of goods sold was $5,328 (in millions).

Instructions

(a) Compute the four liquidity ratios at the end of the year.

(b) Using the data in the chapter, compare Nordstrom’s liquidity with (1) that of J.C. Penney Company, and (2) the industry averages for department stores.