Question
The financial statements for Giardi Corporation, a retailer, follow. Giardi Corporation Consolidated Income Statements (Millions of dollars, except per share data) December 31 2019 2018
The financial statements for Giardi Corporation, a retailer, follow. Giardi Corporation Consolidated Income Statements (Millions of dollars, except per share data)
December 31 2019 2018 2017
Revenues $19,233 $17,927 $16,115
Costs and expenses:
Cost of retail sales, buying, and occupancy $14,164 $13,129 $11,751
Selling, publicity, and administration 3,175 2,978 2,801
Depreciation 498 459 410
Interest expense, net 446 437 398
Taxes other than income taxes 343 313 283
Total costs and expenses $18,626 $17,316 $15,643
Earnings before income taxes $607 $611 $472
Provision for income taxes 232 228 171
Net earnings $375 $383 $301
Giardi Corporation Consolidated Balance Sheets (Millions of dollars)
December 31, 2019 2018
ASSETS
Current assets:
Cash and cash equivalents $321 $117
Accounts receivable 1,536 1,514
Merchandise inventories 2,497 2,618
Other 157 165
Total current assets $4,511 $4,414
Property and equipment:
Land $1,120 $998
Buildings and improvements 4,753 4,342
Fixtures and equipment 2,162 2,197
Construction-in-progress 248 223
Accumulated depreciation (2,336) (2,197)
Net property and equipment $5,947 $5,563
Other 320 360
Total assets $10,778 $10,337
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $200 $23
Accounts payable 1,654 1,596
Accrued liabilities 903 849
Income taxes payable 145 125
Current portion of long-term debt 173 371
Total current liabilities $3,075 $2,964
Long-term debt 4,279 4,330
Deferred income taxes and other 536 450
Loan to ESOP (217) (267)
Total liabilities $7,673 $7,477
Stockholders' equity:
Preferred stock $368 $374
Common stock 72 71
Additional paid-in capital - common 73 58
Retained earnings 2,592 2,357
Total stockholders' equity $3,105 $2,860
Total liabilities and stockholders' equity $10,778 $10,337
Required: 1. Compute the four short-term liquidity ratios for 2018 and 2019 assuming operating cash flows are $281 million and $480 million, respectively. Round your answers to two decimal places.
2019 2018
Current ratio
Quick ratio
Cash ratio
Operating cash flow ratio
2. Conceptual Connection: Indicate which ratio appears to be most appropriate for a retail organization?
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Cornerstones Of Financial Accounting
Authors: Jay Rich, Jefferson Jones, Maryanne Mowen, Don Hansen, Donald Jones, Ralph Tassone
3rd Canadian Edition
017689859X, 9780176898595
