Both part A and B are at the bottom of page 2. If you could explain each step for me that would really help my understanding. Thank you
LIMITED BRANDS INC. 2007 2006 2005 ASSETS Cash & Short-Term Investments 500.000 1,208.000 1,161.000 Net Receivables 176.000 182.000 128.000 Inventories 1,770.000 1,160.000 1,142.000 Prepaid Expenses 0.000 34.000 33.000 Other Current Assets 325.000 200.000 220.000 Total Current Assets 2,771.000 2,784.000 2,684.000 Gross Plant, Property & Equipment 4,307.000 3,998.000 3,782.000 Accumulated Depreciation 2,445.000 2,383.000 2,298.000 Net Plant, Property & Equipment 1,862.000 1,615.000 1,484.000 Investments at Equity 4.000 10.000 14.000 Other Investments 55.000 55.000 43.000 Intangibles 2,318.000 1,804.000 ,800.000 Other Assets 83.000 78.000 64.000 TOTAL ASSETS 7,093.000 6,346.000 6,089.000 LIABILITIES Long Term Debt Due In One Year 8.000 7.000 0.000 Accounts Payable 593.000 535.000 496.000 Taxes Payable 179.000 211.000 155.000 Accrued Expenses 377.000 308.000 317.000 Other Current Liabilities 552.000 514.000 483.000 Total Current Liabilities 1,709.000 1,575.000 1,451.000 Long Term Debt 1,665.000 1,669.000 1,646.000 Deferred Taxes 173.000 146.000 177.000 Minority Interest 71.000 33.000 33.000 Other Liabilities 520.000 452.000 447.000 TOTAL LIABILITIES 4,138.000 3,875.000 3,754.000 EQUITY Common Stock 262.000 262.000 262.000 Capital Surplus 1,565.000 1,597.000 1,649.000 Retained Earnings 4,260.000 3,833.000 3,392.000 Less: Treasury Stock 3,132.000 3,221.000 2,968.000 TOTAL EQUITY 2,955.000 2,471.000 2,335.000 TOTAL LIABILITIES & EQUITY 7,093.000 6,346.000 6,089.000 Common Shares Outstanding 398.000 395.000 407.000INCOME STATEMENTS ( $MIL.) 2007 2006 Sales 10,671.000 9,669.000 Cost of Goods Sold 6,342.000 5,920.000 Gross Profit 4,329.000 3,749.000 Selling, General, & Administrative Exp. 2,837.000 2,502.500 Operating Income Before Deprec. 1,492.000 1,246.500 Depreciation, Depletion, & Amortization 316.000 299.000 Operating Profit 1,176.000 947.500 Interest Expense 102.000 94.000 Non-Operating Income/Expense 23.000 25.000 Special Items 0.000 78.500 Pretax Income 1,097.000 957.000 Total Income Taxes 422.000 291.000 Adjusted Available for Common 675.000 666.000 Extraordinary Items 1.000 17.000 Discontinued Operations 0.000 0.000 Adjusted Net Income 676.000 683.000 Dividends per share $ 0.60 $ 0.61 Use the company's Operating Profit as an approximation of its EBIT, and you may assume a 40 percent tax rate for your computations. a. For the fiscal years ending in January of 2006, 2007, calculate: - Limited Brand's total liabilities-to-equity ratio - Times interest earned ratio - Times burden covered. b. What percentage decline in EBIT could Limited Brands have sustained in fiscal years 2006, 2007 before failing to cover Interest and principal repayment requirements - Interest, principal, and common dividend payments
