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Types of Debt - Pier 1

Use the Pier 1 Imports' financial statements to answer the following questions:

To obtain Pier 1 Imports' financial statements you can go to www.Pier1.com and click on the link at the bottom of the first page titled Investor's Relations and then choose Annual Reports and Proxy Statements.

1. Does Pier 1 have a significant amount of bad debts? How can you tell?
2. What types of debt does Pier 1 Company have? Where did you find this information?
3. In addition to selling treasury stock, a company may use treasury stock when stock options are exercised or when debt is converted to stock. Pier 1 used some of its treasury shares to do this during 2000 and 2001. Where is this disclosed in the financial statements? Describe how the dollar amount of treasury shares on the comparative balance sheets decreased while, at the same time, the statement of cash flows shows cash outflow for the purchase of treasury shares.

Solution Preview

Use the Pier 1 Imports' financial statements to answer the following questions:

1. Does Pier 1 have a significant amount of bad debts? How can you tell?
Company has 2.6 mn$ of Bad debt in the year 2004 (Given in Annual report-2005, Page 17). As a percentage of Sales it is 2.6/1897 = .1370% which is very low. So it does not have significant amount of bad debts.

2. What types of debt does Pier 1 Company have? Where did you find this information?

It is attached in the excel ...

Solution Summary

The solution discusses the types of debt of Pier 1 Company and uses an excel chart to show the annual report.

$2.19