menu
bartleby
search
close search
Hit Return to see all results
close solutoin list

Analyze and compare Foot Locker and The Finish Line The Foot Locker, Inc. (FL) and The Finish Line, Inc. (FINL) are two retail athletic footwear chains. The current assets and current liabilities from recent balance sheets for both companies are as follows (in millions): a. Compute the working capital for Year 2 and Year 1 for each company. b. Compute the current ratio for Year 2 and Year 1 for each company. Round to one decimal place. c. If you were a supplier to these two companies, in which company would you feel most confident about receiving payment? d. For each company, did liquidity improve or decline between the two years?

BuyFindarrow_forward

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

Solutions

Chapter
Section
BuyFindarrow_forward

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
Chapter 4, Problem 3MAD
Textbook Problem
28 views

Analyze and compare Foot Locker and The Finish Line

The Foot Locker, Inc. (FL) and The Finish Line, Inc. (FINL) are two retail athletic footwear chains. The current assets and current liabilities from recent balance sheets for both companies are as follows (in millions):

Chapter 4, Problem 3MAD, Analyze and compare Foot Locker and The Finish Line The Foot Locker, Inc. (FL) and The Finish Line,

  1. a. Compute the working capital for Year 2 and Year 1 for each company.
  2. b. Compute the current ratio for Year 2 and Year 1 for each company. Round to one decimal place.
  3. c. If you were a supplier to these two companies, in which company would you feel most confident about receiving payment?
  4. d. For each company, did liquidity improve or decline between the two years?

a.

To determine

Compute the working capital for Year 2 and Year 1 for Company FL and Company TFL.

Explanation of Solution

Working capital: Working capital refers to the excess amount of current assets over its current liabilities of a business. It measures the excess funds that are required for the companies to carry out their day to day operations, excluding any new funds that have been invested during the year. Working capital is calculated by using the formula:

Working capital=Current assetsCurrent liabilities

Compute the working capital of Company FL for Year 2 and Year 1:

ParticularsYear 2Year 1
Current assets$2,606$2,456
Less: Current liabilities($700)($696)

b.

To determine

Compute the current ratio for Year 2 and Year 1 for Company FL and Company TFL.

c.

To determine

From the viewpoint of supplier for both companies, identify the company that would make the payment promptly.

d.

To determine

Identify whether the liquidity position of the company has increased or decreased between the two years.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Chapter 4 Solutions

Financial And Managerial Accounting
Show all chapter solutions
add
Ch. 4 - Flow of accounts into financial statements The...Ch. 4 - Statement of stockholders equity Scott Lockhart...Ch. 4 - Classified balance sheet The following accounts...Ch. 4 - Closing entries After the accounts have been...Ch. 4 - Accounting cycle From the following list of steps...Ch. 4 - Working capital and current ratio Current assets...Ch. 4 - Flow of accounts into financial statements The...Ch. 4 - Classifying accounts Balances for each of the...Ch. 4 - Financial statements from the end-of-period...Ch. 4 - Financial statements from the end-of-period...Ch. 4 - Income statement The following account balances...Ch. 4 - Income statement; net loss The following revenue...Ch. 4 - Income statement FedEx Corporation (FDX) had the...Ch. 4 - Statement of stockholders equity Climate Control...Ch. 4 - Statement of stockholders equity; net loss...Ch. 4 - Classifying assets Identify each of the following...Ch. 4 - Balance sheet classification At the balance sheet...Ch. 4 - Balance sheet Dynamic Weight Loss Co. offers...Ch. 4 - Balance sheet The following balance sheet was...Ch. 4 - Identifying accounts to be closed From the list...Ch. 4 - Closing entries with net income Automation...Ch. 4 - Closing entries with net loss Summit Services Co....Ch. 4 - Identifying permanent accounts Which of the...Ch. 4 - Post-closing trial balance An accountant prepared...Ch. 4 - Steps in the accounting cycle Rearrange the...Ch. 4 - Completing an end-of-period spreadsheet List (a)...Ch. 4 - Appendix 1 Adjustment data on an end-of-period...Ch. 4 - Appendix 1 Completing an end-of-period spreadsheet...Ch. 4 - Appendix 1 Financial statements from an...Ch. 4 - Appendix 1 Adjusting entries from an end-of-period...Ch. 4 - Appendix 1 Closing entries from an end-of-period...Ch. 4 - Reversing entry The following adjusting entry for...Ch. 4 - Adjusting and reversing entries On the basis of...Ch. 4 - Adjusting and reversing entries On the basis of...Ch. 4 - Entries posted to wages expense account Portions...Ch. 4 - Entries posted to wages expense account Portions...Ch. 4 - Financial statements and closing entries Beacons...Ch. 4 - Financial statements and closing entries Foxy...Ch. 4 - T accounts, adjusting entries, financial...Ch. 4 - Ledger accounts, adjusting entries, financial...Ch. 4 - Complete accounting cycle For the past several...Ch. 4 - Financial statements and closing entries Last...Ch. 4 - Financial statements and closing entries The...Ch. 4 - T accounts, adjusting entries, financial...Ch. 4 - Ledger accounts, adjusting entries, financial...Ch. 4 - Complete accounting cycle For the past several...Ch. 4 - The unadjusted trial balance of PS Music as of...Ch. 4 - Kelly Pitney began her consulting business, Kelly...Ch. 4 - Analyze and compare Amazon.com to Best Buy...Ch. 4 - Analyze and compare Zynga, Electronic Arts, and...Ch. 4 - Analyze and compare Foot Locker and The Finish...Ch. 4 - Analyze Under Armour The following year-end data...Ch. 4 - Analyze Sears Holding Corporation Sears Holdings...Ch. 4 - Analyze and compare Alphabet (Google) and...Ch. 4 - Ethics in Action New Wave Images is a graphics...Ch. 4 - Your friend, Daniel Nat, recently began work as...Ch. 4 - Minus for supplies? The following is an excerpt...Ch. 4 - Financial statements and loan Assume that you...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions add
Explain how absolute advantage and comparative advantage differ.

Principles of Microeconomics (MindTap Course List)

Describe how research and development leads to new products.

Foundations of Business (MindTap Course List)

What is the purpose of physical controls?

Accounting Information Systems

NONCONSTANT GROWTH VALUATION Hart Enterprises recently paid a dividend, D0, of 1.25. It expects to have noncons...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

In what ways is economics a science?

Principles of Macroeconomics (MindTap Course List)