SPECIALTY RETAILER—LIQUIDITY REVIEW

With this case, we review the liquidity of several specialty retail stores. The companies reviewed and the year end dates are as follows:

1. Abercrombie & Fitch Co. (January 31, 2009—52 week; February 2, 2008—52 week; February 3, 2007—53 week) ‘‘Abercrombie & Fitch Co …is a specialty retailer that operates stores and websites selling casual sportswear apparel.’’ 10 K

2. Limited Brands, Inc. (January 31, 2009—52 week; February 2, 2008—52 week; February 3, 2007—53 week) ‘‘We operate in the highly competitive specialty retail business.’’ 10 K

3. Gap Inc. (January 31, 2009—52 week; February 2, 2008—52 week; February 3, 2007—53 week) ‘‘We are a global specialty retailer offering clothing, accessories, and personal care products.’’ 10 K

 

Abercrombie Fitch

Limited Brands

GAP

Data Reviewed

2009

2008

2009

2008

2009

2008

Current ratio

2.41

2.10

2.28

2.12

1.86

1.68

Acid test

1.28

1.29

1.12

1.00

.79

.78

Required

a. For each company, indicate the trend in liquidity.

b. How would you rank these companies, considering liquidity?