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2016 ANNUAL REPORT GAPINC.COM 170252_L01_CVRS.indd 1 3/17/17 7:45 PM BOARD OF DIRECTORS LEADERSHIP TEAM C O R P O R AT E AND SHAREHOLDER I N F O R M...
Question:Objectives
· Locate specific financial accounting information in the Gap Inc. (Gap) 2016 Annual Report.
· Calculate various financial ratios and interpret.
· Gain a better understanding of the financial aspects of Gapâs retail business.
Instructions
1. Locate Gap Inc.âs 2016 Annual Report which has been posted to Blackboard with these instructions.
2. There are 10 sections of questions. You will find the information necessary to answer the questions in âItem 8. Financial Statements and Supplementary Data,â of the report. Read through the questions carefully and answer in the space provided.
Section 1. Balance Sheet - Overview
1. What are the following amounts at 1/30/17:
a. Total Assets __________________
b. Total Liabilities __________________
c. Total Ownerâs Equity __________________
2. At 1/30/17:
a. What is the percentage of debt used to finance Gap? ____________
b. What is the percentage of ownerâs equity used to finance Gap? ____________
c. What is the significance of these two percentages? ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
3. At 1/30/17:
a. What percentage of Gapâs total assets are current assets? __________
b. What percentage of Gapâs total assets are noncurrent assets? __________
c. Comment on whether this makes sense when you consider Gapâs line of business. ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Section 2. Income Statement - Overview
1. Is Gapâs income statement presented in a single-step or multiple-step format? _____________________
Why do you think that format was used? ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
2. What are the following amounts for the year ended 1/30/17:
a. Net Sales ____________
b. Cost of Goods Sold ____________
c. Gross Margin ____________
d. Gross Margin Percentage ____________
e. Operating Income ____________
f. Net Income ____________
Section 3. Cash Flow Statement - Overview
1. What are the following amounts for the year ended 1/30/17:
a. Cash flows from operating activities _______________
b. Cash flows from investing activities _______________
c. Cash flows from financing activities _______________
Section 4. Current Assets
1. What is the amount of Current Assets at 1/30/17? _______________
2. What is the amount of Inventories at 1/30/17? _______________
a. What valuation principle does Gap use to value these inventories?
________________________________________________________________________
b. Which cost flow assumption does Gap use to determine the cost of inventories?
________________________________________________________________________
Section 5. Noncurrent Assets
1. What is the amount of Noncurrent Assets at 1/30/17? _______________
2. What is the amount of Property and Equipment (net) held by Gap at 1/30/17? _______________
a. How much depreciation has been recorded on these assets at 1/30/17? _______________
b. What method does Gap use to calculate depreciation? _______________________
3. What is the amount of Furniture and Equipment held by Gap at 1/30/17? _______________
Section 6. Current Liabilities
1. What is the amount of Current Liabilities at 1/30/17? _______________
2. What are the following amounts for the year ended 1/30/17:
a. Accounts Payable _______________
b. Current ratio _______________
Section 7. Noncurrent Liabilities
1. What is the amount of Noncurrent Liabilities at 1/30/17? _______________
2. How much of Gapâs long-term debt will become due and payable in less than 1 year? ______________
Section 8. Shareholderâs Equity
1. At 1/30/17:
How many shares of common stock are: (a) authorized _______________
(b) issued _______________
(c) outstanding _______________
How many shares of preferred stock are: (a) authorized _______________
(b) issued _______________
(c) outstanding _______________
2. What was the amount of dividends paid to shareholders during 2016? _______________
Section 9. Other Information
Locate the following information in the Gap 2016 Annual Report:
a. Name of Gapâs CEO __________________
b. Name of Gapâs CFO __________________
c. Stock symbol on the New York Stock Exchange (NYSE) ___________________
d. Independent accountants (auditors) _________________________
Section 10. Recent Financial News
Search for a recent news article about Gap (within the past year) that discusses a topic which has financial implications to the company. Prepare a brief summary of the article (reference article here) and explain the importance or significance of this information to Gapâs financial statements.
