The financial statements for Giardi Corporation, a retailer, follow.

LIABILITIES AND STOCKHOLDERS€™ EQUITY

Required:
1. Compute the four short-term liquidity ratios (rounded to two decimal places) for 2010 and
2011, assuming operating cash flows are $281 million and $483 million, respectively.
2. Indicate which ratios appear to be most appropriate for a retail organization. Indicate what other information you would like to know to comment on Giardi€™s short-term liquidity.

Transcribed Image Text:

Giardi Corporation Mil Consolidated Income Statements lions of dollars except per share data) December 31 2011 2010 2009 Revenues $19,233 $17,927 $16,115 Costs and expenses: Cost of retail sales, buying, and occupancy Selling, publicity, and administration Depreciation Interest expense, net Taxes other than income taxes $14,164 3,175 498 446 343 $11,751 2,801 410 398 283 $18,626 $17,316 $15,643 472 $13,129 2,978 459 437 313 Total costs and expenses Earnings before income taxes Provision for income taxes Net earnings $ 607 611 228 232 375 383301 Giardi Corporation Consolidated Balance Sheets (Millions of dollars) December 31, ASSETS 2011 2010 Current assets: Cash and cash equivalents Accounts receivable Merchandise inventories Other $ 321 1,536 2,497 157 1,514 2,618 Total current assets 4,511 $ 4,414 Property and equipment: Land Buildings and improvements Fixtures and equipment Construction-inprogress 1,120 4,753 2,162 248 2.336) 5,947 320 $ 998 4,342 2,197 223 Net property and equipment Other 5,563 360 $10776 10,337 Total assets Aocounts payable 3 Income taxes payable Current portion of long erm debt Total current liabilities $ 2,964 Deferred income taxes and other $ 7.673 $ 7477 Stockholders' equity: Additional paid-in capital-common Total stockholders' equity Total liabilities and stockholders' equity $10,778 $10,337