The following information was reported by Gap, Inc. in its 2006 annual report. (a) Determine the overall
Question:
The following information was reported by Gap, Inc. in its 2006 annual report.
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(a) Determine the overall percentage decrease in Gap's total assets from 2002 to 2006. What was the average decrease per year?
(b) Comment on the change in Gap's liquidity. Does working capital or the current ratio appear to provide a better indication of Gap's liquidity? What might explain the change in Gap's liquidity during this period?
(c) Comment on the change in Gap's solvency during this period.
(d) Comment on the change in Gap's profitability during this period. How might this affect your prediction about Gap's futureprofitability?
Solvency means the ability of a business to fulfill its non-current financial liabilities. Often you have heard that the company X went insolvent, this means that the company X is no longer able to settle its noncurrent financial...
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a The percentage decrease in Gaps total assets during this period is calculated as The average decre...View the full answer
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Related Book For 
Financial Accounting Tools for Business Decision Making
ISBN: 978-0470239803
5th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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