Nordstrom, Inc. operates department stores in numerous states. Selected financia

Question

Nordstrom, Inc. operates department stores in numerous states. Selected financial statement data for the year ending January 30, 2010, are as follows. NORDSTROM, INC. Balance Sheet (partial) (in millions) End-of-Year Beginning-of-Year Cash and cash equivalents $ 795 $ 72 Accounts receivable (net) 2,035 1,942 Merchandise inventory 898 900 Prepaid expenses 88 93 Other current assets 238 210 Total current assets $4,054 $3,217 Total current liabilities $2,014 $1,601 For the year, net sales were $8,258 and cost of goods sold was $5,328 (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 above or below? J.C. Penney for the current ratio Nordstrom is above or below? J.C. Penney for the acid-test ratio Nordstrom is above or below? J.C. Penney for the receivable turnover Nordstrom is above or below? J.C. Penney for the inventory turnover Nordstrom is above or below? Industry for the current ratio Nordstrom is above or below? Industry for the acid-test ratio Nordstrom is above or below? Industry for the receivable turnover Nordstrom is above or below? Industry for the inventory turnover is above or below?

Explanation / Answer

(a) Current ratio = 2.01:1 ($3,217

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