美国MBA会计学经典课程FinancialAccounting案例.pdfVIP

Mini Case 1 MGMT 60000 – Krannert School of Management Limited Brands, Inc. Using the 2005 (year end Jan 2006) 10k for Limited answer the following questions. Be sure to provide well written answers that are clearly supported. 1. As of January 28, 2006 what was Limited’s Total Assets? Has it changed much from the previous year? How much and why? (1 major increase and decrease only) Total Assets (TA) as of Jan 28, 2006= $6,346 millions TA as of Jan 28, 2005= $6,089 Change = $257 The largest increase is recorded in Property and equipment, net = $131. Largest decrease in Other Current Assets = -$19. Also, Accounts Receivable (AR) increased on a percentage basis by 42%. 2. What are the sources and relative percentage of financing for these assets? (2 categories only) TA are financed 39% by Equity (2,471/6,346) and 61% by Liabilities (1,575+146+1,669+452+33)) 3. Compare 2006’s Current Asset total to the Current Liability total. Why would this comparison be of interest? CA= $2,784 CL = $1,575 CA/CL = 1.77 The current ratio (CA/CL) is a measure of the short-term liquidity of a firm. Generally, the ability to pay your short term obligations is a function of your short term assets. A rule of thumb is that this ratio should be at least 1. CA-CL = Working Capital (WC) = $1,209 WC is a useful measure of the liquidity position of a company. WC enables companies to finance their daily operations – buy materials, pay suppliers, employees, etc. 4. What is Limited’s largest single asset group? Is this surprising? Property and equipment, net. Somewhat surprising – Limited is a retailer and consequently owns equipment, furniture, and improvements on leased property. However, most retailers rent most, if not all of their store space, so PPE is not always very large. Limited has a large investment in their distribution centers and head office complex. Also, notice that inventory is a