Corporate Financial Accounting
15th Edition
ISBN: 9781337398169
Author: Carl Warren, Jeff Jones
Publisher: Cengage Learning
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Chapter 10, Problem 10.4MAD
Analyze and compare Neiman Marcus and Kohl’s
Neiman Marcus Group (NMG) is one of the largest luxury fashion retailers in the world. Kohl’s Corporation (KSS) sells moderately priced private and national branded products through more than 1,100 department stores located throughout the United States. The current assets and current liabilities at the end of a recent year for both companies are as follows (in millions):
| Neiman Marcus | Kohl’s | |
| Current assets: | ||
| Cash | $ 62 | $1,074 |
| Inventories | 1,125 | 3,795 |
| Other current assets | 147 | 378 |
| Total current assets | $1,334 | $5,247 |
| Current liabilities: | ||
| Accounts payable | $ 318 | $1,507 |
| Other current liabilities | 522 | 1,467 |
| Total current liabilities | $ 840 | $2,974 |
a. 
Would an analysis of
b. Compute the quick ratio for both companies. Round to one decimal place.
c. Interpret your results.
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Students have asked these similar questions
Nordstrom, Inc. operates department stores in numerous states. Suppose selected financial statement data (in millions of dollars) for a recent year follow.
End of Year
Beginning of Year
Cash and cash equivalents
$ 72
$ 358
Receivables (net)
1,942
1,788
Merchandise inventory
900
956
Other current assets
303
259
Total current assets
$3,217
$3,361
Total current liabilities
$1,601
$1,635
Compute working capital and the current ratio at the beginning of the year and at the end of the year. (Round current ratio to 2 decimal places, e.g. 15.25.)
Beginning of Year
End of Year
Working capital
$
enter a dollar amount
$
enter a dollar amount
Current ratio
enter current ratio rounded to 2 decimal places
:1
enter current ratio rounded to 2 decimal places
:1
Nordstrom, Inc. operates department stores in numerous states. Selected hypothetical financial statement data (in millions) for 2022 are presented below.
End of Year
Beginning of Year
Cash and cash equivalents
$ 1,289
$ 126
Accounts receivable (net)
3,600
3,400
Inventory
1,600
1,600
Other current assets
571
531
Total current assets
$7,060
$5,657
Total current liabilities
$3,530
$2,802
For the year, net credit sales were $14,350 million, cost of goods sold was $9,280 million, and net cash provided by operating activities was $1,256 million.Compute the current ratio, accounts receivable turnover, average collection period, inventory turnover, and days in inventory for the current year. (Round Current ratio to 2 decimal places, e.g. 1.62 and all other answers to 1 decimal place, e.g. 1.6.)
Current ratio
enter the ratio rounded to 2 decimal places
:1
Accounts…
Saturn Computer is considering to expand, but before that, the management wants to know the financial position of the company compared to that of the industry. Data for Saturn Computer Co. and its industry averages follow.
Items
Amount ($)
Items
Amounts ($)
Cash
87,500
Accounts Payable
110,000
Total Operating Expense
123,000
Interest Expense
26,500
Income Tax
18,200
Total Sales
1,607,500
Net Fixed Assets
292,500
Long-term Bank Loan
246,500
Cost of Goods Sold
1,352,500
Common Stock Equity
361,000
Inventories
211,500
Other Current Liabilities
84,000
Accounts Receivables
336,000
Notes Payable (Maturity within 1 year)
107,000
Total Operating Profit
110,000
Net Profit after tax
88,300…
Chapter 10 Solutions
Corporate Financial Accounting
Ch. 10 - Does a discounted note payable provide credit...Ch. 10 - Employees are subject to taxes withheld from their...Ch. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - Prob. 5DQCh. 10 - To match revenues and expenses properly, should...Ch. 10 - Prob. 7DQCh. 10 - Installment notes require equal periodic payments....Ch. 10 - When should the liability associated with a...Ch. 10 - Prob. 10DQ
Ch. 10 - Proceeds from notes payable On January 26, Nyree...Ch. 10 - Prob. 10.2BECh. 10 - Journalize period payroll The payroll register of...Ch. 10 - Prob. 10.4BECh. 10 - Prob. 10.5BECh. 10 - Journalizing installment notes On the first day of...Ch. 10 - Prob. 10.7BECh. 10 - Quick ratio Adieu Company reported the following...Ch. 10 - Current liabilities Bon Nebo Co. sold 30,000...Ch. 10 - Entries for notes payable Bennett Enterprises...Ch. 10 - Evaluating alternative notes A borrower has two...Ch. 10 - Entries for notes payable A business issued a...Ch. 10 - Entries for discounted note payable A business...Ch. 10 - Fixed asset purchases with note On June 30,...Ch. 10 - Prob. 10.7EXCh. 10 - Calculate payroll An employee earns 30 per hour...Ch. 10 - Prob. 10.9EXCh. 10 - Summary payroll data In the following summary of...Ch. 10 - Prob. 10.11EXCh. 10 - Payroll entries The payroll register for D. Salah...Ch. 10 - Payroll entries Widmer Company had gross wages of...Ch. 10 - Prob. 10.14EXCh. 10 - Prob. 10.15EXCh. 10 - Accrued vacation pay A business provides its...Ch. 10 - Prob. 10.17EXCh. 10 - Prob. 10.18EXCh. 10 - Entries for installment note transactions On the...Ch. 10 - Entries for installment note transactions On...Ch. 10 - Entries for installment note transactions On...Ch. 10 - Accrued product warranty Fosters Manufacturing Co....Ch. 10 - Prob. 10.23EXCh. 10 - Prob. 10.24EXCh. 10 - Liability transactions The following items were...Ch. 10 - Entries for payroll and payroll taxes The...Ch. 10 - Wage and tax statement data on employer FICA tax...Ch. 10 - Prob. 10.4APRCh. 10 - Payroll accounts and year-end entries The...Ch. 10 - Prob. 10.1BPRCh. 10 - Prob. 10.2BPRCh. 10 - Wage and tax statement data and employer FICA tax...Ch. 10 - Prob. 10.4BPRCh. 10 - Payroll accounts and year-end entries The...Ch. 10 - Prob. 3COPCh. 10 - Analyze and compare Amazon.com to Best Buy...Ch. 10 - Prob. 10.2MADCh. 10 - Prob. 10.3MADCh. 10 - Analyze and compare Neiman Marcus and Kohls Neiman...Ch. 10 - Analyze and compare Cabelas and Dicks Sporting...Ch. 10 - Ethics in Action Tonya Latirno is a staff...Ch. 10 - Prob. 10.4TIFCh. 10 - Prob. 10.5TIF
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