Question - Nordstrom, Inc. operates department store in numerous states. Selected financial statement data for the year ending January 31, 2009 are shown below.
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NORDSTROM, INC. Balance Sheet (partial)
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(in millions)
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End-of-Year
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Beginning-of-Year
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Cash and cash equivalents
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$72
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$358
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Accounts receivable (net)
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1,942
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1,788
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Merchandise inventory
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900
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956
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Prepaid expenses
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93
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78
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Other current assets
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210
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181
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Total current assets
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$3,217
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$3,361
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Total current liabilities
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$1,601
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$1,635
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For the year, net credit sales were $8,272, and cost of goods sold was $5,417 (in millions).
Instructions -
(a) Compute the four liquidity ratios at the end of the year.
(b) 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.