Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Income statements for The Gap, Inc., follow, along with selected balance sheet information ($ millions). The GAP, INC. Consolidated Statement of Earnings Fiscal year
Income statements for The Gap, Inc., follow, along with selected balance sheet information ($ millions). The GAP, INC. Consolidated Statement of Earnings Fiscal year ended Feb. 3, 2018 Jan. 28, 2017 Net sales $15,855 $15,516 Cost of goods sold and occupancy expenses 9,789 9.876 Gross profit 6,066 5,640 Operating expenses 4,587 4,449 Operating income 1,479 1,191 Interest expense 74 75 Interest income (19) (8) Income before income taxes 1,424 1,124 Income taxes 576 448 Net earnings $848 $676 The GAP, INC. Selected Balance Sheet Data Feb. 3, 2018 Jan. 28, 2017 Merchandise inventories Total assets $1,997 7,989 $1,830 Total stockholders' equity 3,144 7,610 2,904 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 February 3, 2018. (Round your answers to one decimal place.) ROE ROA ROFL 0% 0% 0% b. Disaggregate ROA into profit margin (PM) and asset turnover (AT). (Round your answers to one decimal place.) PM AT 0% 0 c. Compute the gross profit margin (GPM) and inventory turnover (INVT) ratios for the fiscal year ended February 3, 2018. (Round your answers to one decimal place.) GPM INVT 0% 0
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started