Balance sheet as of January 31, 2009 GAP Inc LTD Brands
Current liabilities 2158 1255
Long term debt 0 2897
Other non current liabilities 1019 946
Shareholders equity 4387 1874
Total 7564 6972
Minimum payment under operating leases
2009 1069 478
2010 927 455
2011 712 416
2012 520 373
2013 386 341
After 2013 1080 1334
Total 4694 3397
a. Compute the present value of operating lease obligations using a 6.25% discount rate.
Assume that all cash ?ows occur at the end of each year. Also assume that the minimum lease payments after 2017 occur evenly over a five-year period.=
b.Re-compute the long-term debt to long-term capital ratio assuming that Starbucks capitalizes operating leases and reports the long-term portion as part of long-term debt.
c. Re-compute the long-term debt to long-term capital ratio assuming that the long-term