Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hello, need some help with the answers including formulas (and the process) please Compute, Disaggregate and Interpret ROE and ROA Income statements for The Gap,

Hello, need some help with the answers including formulas (and the process) pleaseimage text in transcribed

Compute, Disaggregate and Interpret ROE and ROA Income statements for The Gap, Inc., follow, along with selected balance sheet information (5 millions). The GAP, INC. Consolidated Statement of Earnings Fiscal year ended Jan. 28, 2012 Jan. 29, 2011 Net sales $14.649 $14.664 Cost of goods sold and occupancy expenses 9.275 8.775 Gross profit 5.374 5.889 Operating expenses 3.836 3.921 Operating income 1.538 1.968 Interest expense (reversal) 74 (8) Interest income (5) (6) Income before income taxes 1,469 1.982 Income taxes 536 778 Net earnings $933 $1.204 The GAP, INC. Selected Balance Sheet Data Jan. n. 28, 2012 Jan. 29, 2011 Merchandise inventories $1,415 $1,620 Total assets 7.222 7,065 Total stockholders' equity 2.755 4.080 Assume a statutory tax rate of 35%. a. Compute the return on equity (ROE), return on assets (ROA), and return on financial leverage (ROFL) for the fiscal year ended January 28, 2012. (Round your answers to one decimal place.) ROE X ROA ROFL 096 X 0% x b. Disaggregate ROA into profit margin (PM) and asset turnover (AT). (Round your answers to one decimal place.) PM 0% X AT c. Compute the gross profit margin (GPM) and inventory turnover (INVT) ratios for the fiscal year ended January 28, 2012. (Round your answers to one decimal place.) GPM 0 % X INVT OX

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial And Managerial Accounting Working Papers Volume 1

Authors: Belverd E. Needles

6th Edition

0618102337, 978-0618102334

More Books

Students also viewed these Accounting questions