FIN - Case 7-10 SPECIALITY RETAILER and Case 6-4 TECHNOLOGY
Case 7-10 SPECIALITY RETAILER – DEBT VIEW
In this
case, we review the debt of several specialty retail stores. The companies
reviewed and the year-end dates are as follows:
1. Abercrombie & Fitch Co.
(52-week fiscal year ended January 29,2011; 52-week fiscal year ended
January 30, 2010; 52-week fiscal year ended January 31, 2009)
‘‘Abercrombie * Fitch Co… is a specialty retailer that operates stores and
websites selling casual sportswear apparel.’’ 10-K
2. Limited Brands, Inc.
(52-week fiscal year ended January 29,2011; 52-week fiscal year ended January
30, 2010; 52-week fiscal year ended January 31, 2009)
‘‘We operate in the highly competitive specialty retail business.’’ 10-K
3. Gap Inc.
(52-week fiscal year ended January 29,2011; 52-week fiscal year ended
January 30, 2010; 52-week fiscal year ended January 31, 2009) ‘‘We are a global
specialty retailer offering clothing, accessories, and personal care
products.’’ 10-K
Required
a.
Comment on the relative times interest earned between the companies.
b.
Comment on the relative fixed charge coverage for each company.
c.
Comment on the relative times interest earned vs. the fixed charge coverage.
Why is the times interest earned materially higher than the fixed charge
coverage?
d. Why
is the debt/equity materially more than the debt ratio?
e.
Considering the debt ratio, comment on the relative debt position of these
companies.
f. Why
is the debt to tangible net worth usually higher than the debt/equity ratio?
Case 6-4 TECHNOLOGY
“”3M is a diversified technology company with a global presence in the following businesses: Industrial and Transportation; Health Care; Consumer and Office; Safety, Security and Protection Services; Display and Graphics; and Electro and Communications. 3M is among the leading manufacturers of products for many of the markets it serves. Most 3M products involve expertise in product development, manufacturing and marketing, and are subject to competition from products manufactured and sold by other technologically oriented companies”
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Rating:
5/
Solution: FIN - Case 7-10 SPECIALITY RETAILER and Case 6-4 TECHNOLOGY SOLUTION