PI-21 all questions

INTRODUCTION TO USING ACCOUNTING INFORMATION 9 PI-21. Comparing GAP and Polo Ralph Lauren Corp (LG 5). The GAP, Inc. and Polo Ralph Lauren, Inc. both operate in the retailing clothing business. Listed below are comparative balance sheets and income statements 2008 and 2007 (in millions), REQUIRED BALANCE SHEET QUESTIoNS: 1. At the end of fisceal 2008, which company has higher total assets in daollas? 2. From 2007 to For this answer, compute a percent change in total assets from 2007 to 2008 for each company). 3. At the end of 2008, which company has more risk in terms of liablities? Briefly explain. INCOME STATEMENT QUESTIONS 4. For 2008, which company had higher total revenues in dollars? 5. For 2008, which company had the lowest percent of total expenses to total revenues? As a result, which company had the highest percent of net income to total revenuesi? 6. From 2007 to 2008, which company was able to reduce expenses as a percent of total 2007 revenues better? (Hint: For this answer, examine the comparative common size and 2008 total expense percents for each company). INTEGRATIVE BALANCE SHEET AND INCOME STATEMENT QUESTION 7. For 2005, which company is operating more efficiently by using the least amount of asset investment to generate a given level of revenues? Briefly explain why the nature of each company's business may help to explain the ratio results. (Hint: For this answer, you will need to compute total asset turmocer ratios for both companies). GAR INC. AND POLO RALPH LAUREN CORP COMPARATIVE CONMON SIZE BALANCE SHEETS Fiecal 200 Total owners saos 4274 84. ownand equty AND POLO RALPH LAUREN COR Fiscal 2008 And