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a. What is the percentage of debt used to finance Gap? ____________ b. What is the percentage of owner’s equity used to finance Gap? ____________ c. What is the significance of these two percentag

a. What is the percentage of debt used to finance Gap? ____________ b. What is the percentage of owner’s equity used to finance Gap? ____________ c. What is the significance of these two percentag

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter21: The Statement Of Cash Flows
Section: Chapter Questions
Problem 17E: Investing Activities and Depreciable Assets Verlando Company had the following account balances and...
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At 2/1/20:

a. What is the percentage of debt used to finance Gap? ____________

b. What is the percentage of owner’s equity used to finance Gap? ____________

c. What is the significance of these two percentages? ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

 

February 1, 2020 February 2, 2019 ($ and shares in millions except par value) ASSETS Current assets: Cash and cash equivalents 1,364 $ 1,081 Short-term investments 290 288 Merchandise inventory Other current assets 2,156 2,131 706 751 Total current assets 4,516 4,251 Property and equipment, net of accumulated depreciation of $5,839 and $5,755 3,122 2,912 Operating lease assets Other long-term assets 5,402 639 886 Total assets $ 13,679 $ 8,049 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable Accrued expenses and other current liabilities Current portion of operating lease liabilities Income taxes payable 1,174 $ 1,126 1,067 1,024 920 48 24 Total current liabilities 3,209 2,174 Long-term liabilities: Long-term debt Long-term operating lease liabilities Lease incentives and other long-term liabilities Total long-term liabilities Commitments and contingencies (see Note 16) Stockholders' equity: Common stock $0.05 par value Authorized 2,300 shares for all periods presented; Issued and Outstanding 371 and 378 shares 1,249 1,249 5,508 397 1,073 2,322 7,154 19 19 Additional paid-in capital Retained earnings - 3,257 3,481 Accumulated other comprehensive income 40 53 Total stockholders' equity Total liabilities and stockholders' equity 3,316 3,553 13,679 $ 8,049 %24 %24 %24
Transcribed Image Text:February 1, 2020 February 2, 2019 ($ and shares in millions except par value) ASSETS Current assets: Cash and cash equivalents 1,364 $ 1,081 Short-term investments 290 288 Merchandise inventory Other current assets 2,156 2,131 706 751 Total current assets 4,516 4,251 Property and equipment, net of accumulated depreciation of $5,839 and $5,755 3,122 2,912 Operating lease assets Other long-term assets 5,402 639 886 Total assets $ 13,679 $ 8,049 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable Accrued expenses and other current liabilities Current portion of operating lease liabilities Income taxes payable 1,174 $ 1,126 1,067 1,024 920 48 24 Total current liabilities 3,209 2,174 Long-term liabilities: Long-term debt Long-term operating lease liabilities Lease incentives and other long-term liabilities Total long-term liabilities Commitments and contingencies (see Note 16) Stockholders' equity: Common stock $0.05 par value Authorized 2,300 shares for all periods presented; Issued and Outstanding 371 and 378 shares 1,249 1,249 5,508 397 1,073 2,322 7,154 19 19 Additional paid-in capital Retained earnings - 3,257 3,481 Accumulated other comprehensive income 40 53 Total stockholders' equity Total liabilities and stockholders' equity 3,316 3,553 13,679 $ 8,049 %24 %24 %24
THE GAP, INC. CONSOLIDATED STATEMENTS OF INCOME Fiscal Year 2018 16,580 $ ($ and shares in millions except per share amounts) 2019 2017 Net sales $ 16,383 $ 15,855 Cost of goods sold and occupancy expenses Gross profit Operating expenses Operating income Interest expense Interest income 10,250 10,258 9,789 6,133 6,322 6,066 5,559 4,960 4,587 574 1,362 1,479 76 73 74 (30) (33) (19) 1,424 Income before income taxes 528 1,322 Income taxes 177 319 576 Net income $ 351 $ 1,003 $ 848 Weighted-average number of shares-basic Weighted-average number of shares-diluted 376 385 393 378 388 396 $ 2.61 $ 2.16 Earnings per share-basic Earnings per share-diluted 0.93 $ $ 0.93 $ 2.59 $ 2.14 Cash dividends declared and paid per share 0.97 $ 0.97 $ 0.92 %24
Transcribed Image Text:THE GAP, INC. CONSOLIDATED STATEMENTS OF INCOME Fiscal Year 2018 16,580 $ ($ and shares in millions except per share amounts) 2019 2017 Net sales $ 16,383 $ 15,855 Cost of goods sold and occupancy expenses Gross profit Operating expenses Operating income Interest expense Interest income 10,250 10,258 9,789 6,133 6,322 6,066 5,559 4,960 4,587 574 1,362 1,479 76 73 74 (30) (33) (19) 1,424 Income before income taxes 528 1,322 Income taxes 177 319 576 Net income $ 351 $ 1,003 $ 848 Weighted-average number of shares-basic Weighted-average number of shares-diluted 376 385 393 378 388 396 $ 2.61 $ 2.16 Earnings per share-basic Earnings per share-diluted 0.93 $ $ 0.93 $ 2.59 $ 2.14 Cash dividends declared and paid per share 0.97 $ 0.97 $ 0.92 %24
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