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Nordstrom's liquidity with (1) that of J.C. Penney Company

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Nordstrom Inc. operates department stores in numerous states. Selected financial statement data for the year ending January 29, 2012, are as follows.
NORDSTROM, INC.
Balance Sheet (partial)
(in millions) End-of-Year Beginning-of-Year
Cash and cash equivalents $ 482 $ 369
Receivables (net) 679 684
Merchandise inventory 1,050 935
Prepaid expenses 66 60
Other current assets 613 586
Total current assets $2,890 $2,634
Total current liabilities $1,879 $1,449
For the year, net sales were $8,178, and cost of goods sold was $4,612 (in millions
Compute the four liquidity ratios at the end of the year. (Round ratios to 2 decimal place, e.g. 10.57:1 and turnovers 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 ratios to 2 decimal place, e.g. 10.57:1 and turnovers to 1 decimal place, e.g. 10.5.)
Ratio Nordstrom J. C. Penney Industry
Current :1
2.02:1 1.06:1
Acid-test :1
0.87:1 0.29:1
Receivables turnover :1
57.0:1 28.2:1
Inventory turnover :1
3.5:1 7.0:1
Nordstrom is J.C. Penney for the current and acid-test ratios and the receivables turnover. Nordstrom is than J.C. Penney for inventory turnover.
Nordstrom is than the industry average for the current and acid test ratio, but the industry average for receivables turnover and the inventory turnover ratios.

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Nordstrom Inc. operates department stores in numerous states. Selected financial statement data for the year ending January 29, 2012, are as follows.
NORDSTROM, INC.
Balance Sheet (partial)
(in millions) End-of-Year Beginning-of-Year
Cash and cash equivalents $ 482 $ 369
Receivables (net) 679 684
Merchandise inventory 1,050 935
Prepaid expenses 66 60
Other current assets 613 586
Total current assets $2,890 $2,634
Total current liabilities $1,879 $1,449
For the year, net sales were $8,178, and ...

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Solution discusses and helps in computing Nordstrom's liquidity with (1) that of J.C. Penney Company

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Liquidity Ratio Calculations

Nordstrom Inc. operates department stores in numerous states. Selected financial statement data for the year ending January 29, 2012, are as follows.

NORDSTROM, INC.
Balance Sheet (partial)

(in millions) End-of-Year // Beginning-of-Year

Cash and cash equivalents : $ 474 // $ 387
Receivables (net) : 678 // 670
Merchandise inventory : 1,050 // 944
Prepaid expenses : 75 // 66
Other current assets : 621 // 589
Total current assets : $2,898 // $2,656
Total current liabilities : $1,884 // $1,461

For the year, net sales were $8,133, and cost of goods sold was $4,578 (in millions).

Compute the four liquidity ratios at the end of the year:

Current ratio
Acid-test ratio
Receivables turnover
Inventory turnover

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.

Current ratio
Nordstorm :1
J.C. Penny 2.02:1
Industry 1.06:1

Acid-test ratio
Nordstorm :1
J.C. Penny 0.87:1
Industry 0.29:1

Receivables turnover
Nordstorm :1
J.C. Penny 57.0:1
Industry 28.2:1

Inventory turnover
Nordstorm :1
J.C. Penny 3.5:1
Industry 7.0:1

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