PREPARATION OF COMPONENT PERCENTAGE STATEMENTS. Financial statements for The Limited, Inc., appear below:

REQUIRED:
1. Prepare component percentage income statements for The Limited for 1993, 1992, and 1991. Prepare component percentage balance sheets for The Limited for the years ending January 29, 1994, and January 30, 1993. 2. Did gross margin grow as much as sales between 1991 and 1992? Between 1992 and 1993? If so, why?
3. Did the relative proportion of The Limited’s assets change between January 29, 1994, and January 30, 1993? If so, how? 4. Did the relative proportion of The Limited’s liabilities and equity change between January 29, 1994, and January 30, 1993? If so, how? 5. How does The Limited appear to have financed the 7.5% increase in assets that occurred between January 29, 1994, and January 30, 1993?

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Consolidated Statements of Income (thousands except per share amounts) The Limited, Inc. 1993 1992 1991 Net Sales $7,245,088 $6,944,296 $6,149,218 Cost of Goods Sold, Occupancy and Buying Costs Gross Income General, Administrative and Store Opening Expenses Special and Nonrecurring Items, (5,286,253) (4,953,556) (4,355.675) 1,958,835 1,990,740 1,793,543 (1,259,896) (1,202,042) (1,080,843) net 2,617 Operating Income 701,556 788,698 712,700 Interest Expense (63,865) (62,398) (63,927) Other Income, net 7,308 10,080 11,529 Gain on Issuance of United Retail Group Stock 9,117 Income Before Income Taxes 644,999 745,497 660,302 Provision for Income Taxes 254,000 290,000 257,000 Net Income $390,999 $455,497 $403,302 Net Income Per Share $1.08 $1,25 $1.11