Nordstrom, Inc.operates department stores in numerous states. Selected financial statement data for the year ending February 2, 2008, are as follows.

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Nordstrom, Inc.operates department stores in numerous states. Selected financial statement data for the year ending February 2, 2008, are as follows.

 

NORDSTROM, INC.

 

Balance Sheet (partial)

 

(in millions)

End-of-Year

 

Beginning-of-Year

 

Cash and cash equivalents

$ 358

 

 

$ 403

 

 

Receivables (net)

1,788

 

 

684

 

 

Merchandise inventory

956

 

 

997

 

 

Prepaid expenses

78

 

 

61

 

 

Other current assets

181

 

 

597

 

 

Total current assets

$3,361

 

 

$2,742

 

 

Total current liabilities

$1,635

 

 

$1,433

 

For the year, net sales were $8,828, and cost of goods sold was $5,526 (in millions).

 

 

 

Compute the four liquidity ratios at the end of the year. (Round answers to 1 decimal place, e.g. 10.5.)

Current ratio

:1

Acid-test ratio

:1

Receivables turnover

times

Inventory turnover

times

 

 

 

 

 

 

 

 

Using the data in the chapter, compare Nordstrom's liquidity with (1) that of J.C. Penney Company, and (2) the industry averages for department stores. (Round answers to 1 decimal place, e.g. 10.5.)

Ratio

Nordstrom

J. C. Penney

Industry

Current

:1

:1

:1

Acid-test

:1

:1

:1

Receivables turnover

:1

:1

:1

Inventory turnover

:1

:1

:1

Nordstrom is belowabove J.C. Penney for the current ratio 
Nordstrom is abovebelow J.C. Penney for the acid-test ratio 
Nordstrom is abovebelow J.C. Penney for the receivable turnover 
Nordstrom is abovebelowJ.C. Penney for the inventory turnover

Nordstrom is belowabove Industry for the current ratio 
Nordstrom is belowabove Industry for the acid-test ratio 
Nordstrom is belowabove Industry for the receivable turnover 
Nordstrom is belowaboveIndustry for the inventory turnover

 

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    E18-5(Nordstrom Inc)
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