Thursday, 25 August 2011

Southgate, Inc. operates department stores in numerous states. Selected financial statement data (in millions of dollars) for the year ended Februar...

Southgate, Inc. operates department stores in numerous states. Selected financial statement data (in millions of dollars) for the year ended Februar...

Q:


Southgate, Inc. operates department stores in numerous states. Selected financial statement data (in millions of dollars) for the year ended February 3, 2007, are as follows.

End of Year Beginning of Year

Cash and cash equivalents $459 $469

Receivables (net) 734 654

Merchandise inventory 1,068 1,036

Other current assets 737 853

Total current assets $2,998 $3,012

Total current liabilities $1,653 $1,908

(a) Compute the working capital and current ratio at the beginning of the year and at the end of the current year.

(b) Did Southgate's liquidity improve or worsen during the year?


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