In early 2016, the following information was true about Abercrombie and Fitch (ANF) and The Gap...
In early 2016, the following information was true about Abercrombie and Fitch (ANF) and The Gap (GPS), both clothing retailers. Values (except price per share) are in millions of dollars.
|
Book Equity |
Price Per Share |
Number of Shares |
|
|
ANF |
$1,294 |
$22.48 |
68.99 million |
|
GPS |
$2,547 |
$24.82 |
395.29 million |
a. What is the market-to-book ratio of each company?
b. What conclusion do you draw from comparing the two ratios?
Homework Answers
| a. | ||
| Formula to calculate market to book ratio | ||
| Market to book ratio = Market value of equity/Book value of equity | ||
| Calculation of market to book ratio for ANF | ||
| Market to book ratio = ($22.48*68.99)/$1,294 | ||
| Market to book ratio= $1,550.895/1,294 | ||
| Market to book ratio= 1.20 | ||
| Calculation of market to book ratio for GPS | ||
| Market to book ratio = ($24.82*395.29)/$2,547 | ||
| Market to book ratio= $9,811.098/$2,547 | ||
| Market to book ratio= 3.85 | ||
| b. The market to book ratio for GPS is higher than for ANF which mean investors are willing to pay more for share of GPS then for ANF which mean the demand and performance of company GPS is better than for ANF. | ||
Add Answer to:
In early 2016, the following information was true about
Abercrombie and Fitch (ANF) and The Gap...
In early 2018, Abercrombie & Fitch (ANF) had a book equity of $ 1 comma 256$1,256...
In early 2018, Abercrombie & Fitch (ANF) had a book equity of $ 1 comma 256$1,256 million, a price per share of $ 22.49$22.49, and 67.767.7 million shares outstanding. At the same time, The Gap (GPS) had a book equity of $ 3 comma 149$3,149 million, a share price of $ 32.08$32.08, and 393393 million shares outstanding. a. What is the market-to-book ratio of each of these clothing retailers? b. What conclusions do you draw from comparing the two ratios?...
Q-4 (20 points) Definition of Valuation Ratios. In early 2018, Abercrombie & Fitch (ANF) and Gap...
Q-4 (20 points) Definition of Valuation Ratios. In early 2018, Abercrombie & Fitch (ANF) and Gap (GPS) had the following financial information (in $ million): ANF GPS Market capitalization 1,538 12,347 Debt 250 1,249 Cash 676 1,783 Revenue 3,493 15,855 Net Income 11 848 If you only have access to the above information: (a) To assess the market value of the firm's underlying business, which valuation ratio is calculated based on the firm's market capitalization? Calculate that valuation ratio for...
Analyze and compare Abercrombie & Fitch and The Gap Abercrombie & Fitch Co. (ANF) and The...
Analyze and compare Abercrombie & Fitch and The Gap Abercrombie & Fitch Co. (ANF) and The Gap, Inc. (GPS) are two U.S. apparel retailers. The current assets and current liabilities for each company from recent balance sheets are as follows (in thousands): Abercrombie & Fitch The Gap Current assets: Cash $547,189 1,783,000 Accounts receivable 93,384 Inventories 399,795 1,830,000 Other current assets 702,000 98,932 $1,139,300 $4,315,000 Total current assets Current liabilities: $ 1,243,000 $187,017 Accounts payable Other current liabilities 1,210,000 298,983...
Comparing Abercrombie & Fitch and TJX Companies Following are selected financial statement data from Abercrombie & Fitch (ANF-upscale clothing retailer) and TJX Companies (TJX-value-priced clo...
Comparing Abercrombie & Fitch and TJX Companies Following are selected financial statement data from Abercrombie & Fitch (ANF-upscale clothing retailer) and TJX Companies (TJX-value-priced clothing retailer including TJ Maxx). ($ thousands) Company Total Assets Net Income Sales 2015 TJX Companies Inc. $10,988,750 2016 TJX Companies Inc. 11,499,482 $2,277,658 $30,944,938 2015 Abercrombie & Fitch 2,505,167 2016 Abercrombie & Fitch 2,443,039 35,576 3,518,680 (a) Compute the return on assets for both companies for the year ended 2016. Round your answers to one...
Comparing Income Statements and Balance Sheets of Competitors Following are selected income statement and balance sheet...
Comparing Income Statements and Balance Sheets of Competitors Following are selected income statement and balance sheet data from two retailers: Abercrombie & Fitch (clothing retailer in the high-end market) and TJX Companies (clothing retailer in the value-priced market) (a) Express each income statement amount as a percentage of sales. Round your answers to one decimal place (ex: 0.2345-23.5%) Income Statement ANF $3,750 1,239 TJX $18,647 14,082 ($ millions) Sales Cost of goods sold 0% 0% Gross profit 2,511 4,565 0%...
1.4 Consider the following financial information for a company (in millions of dollars) Partial income statement...
1.4 Consider the following financial information for a company (in millions of dollars) Partial income statement (latest year ending December 31, 2017): Sales $900 Cost of goods sold ($350) Other expenses ($200) Depreciation ($120) Interest expenses ($30) Partial balance sheet (as of December 31) 2016 2017 Cash $30 $20 Receivables $200 $250 Inventories $220 $210 Net fixed assets $500 $520 Accounts payable $100 $120 Accruals $80 $100 Short-term debt $50 $10 Long-term debt $270 $270 a) Assuming an income...
1.4 Consider the following financial information for a company (in millions of dollars) Partial income statement...
1.4 Consider the following financial information for a company (in millions of dollars) Partial income statement (latest year ending December 31, 2017): Sales $900 Cost of goods sold ($350) Other expenses ($200) Depreciation ($120) Interest expenses ($30) Partial balance sheet (as of December 31) 2016 2017 Cash $30 $20 Receivables $200 $250 Inventories $220 $210 Net fixed assets $500 $520 Accounts payable $100 $120 Accruals $80 $100 Short-term debt $50 $10 Long-term debt $270 $270 Net income after taxes...
JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per...
JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per Share Amounts) (Note 1)* 2016 71,890 21,789 50.101 20,067 9.143 29 Sales to customers Cost of products sold Gross profit Selling, marketing and administrative expenses Research and development expense In-process research and development Interest income Interest expense, net of portion capitalized (Note 4) Other (income) expense, net Restructuring (Note 22) Eamings before provision for taxes on income Provision for taxes on income (Note 8)...
JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per...
JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per Share Amounts) (Note 1)* 2016 71,890 21,789 50.101 20,067 9.143 29 Sales to customers Cost of products sold Gross profit Selling, marketing and administrative expenses Research and development expense In-process research and development Interest income Interest expense, net of portion capitalized (Note 4) Other (income) expense, net Restructuring (Note 22) Eamings before provision for taxes on income Provision for taxes on income (Note 8)...
Q-4 (20 points) Definition of Valuation Ratios. In early 2018, Abercrombie & Fitch (ANF) and Gap (GPS) had the following financial information (in $ million): ANF GPS Market capitalization 1,538 12,347 Debt 250 1,249 Cash 676 1,783 Revenue 3,493 15,855 Net Income 11 848 If you only have access to the above information: (a) To assess the market value of the firm's underlying business, which valuation ratio is calculated based on the firm's market capitalization? Calculate that valuation ratio for...
Analyze and compare Abercrombie & Fitch and The Gap Abercrombie & Fitch Co. (ANF) and The Gap, Inc. (GPS) are two U.S. apparel retailers. The current assets and current liabilities for each company from recent balance sheets are as follows (in thousands): Abercrombie & Fitch The Gap Current assets: Cash $547,189 1,783,000 Accounts receivable 93,384 Inventories 399,795 1,830,000 Other current assets 702,000 98,932 $1,139,300 $4,315,000 Total current assets Current liabilities: $ 1,243,000 $187,017 Accounts payable Other current liabilities 1,210,000 298,983...
Comparing Income Statements and Balance Sheets of Competitors Following are selected income statement and balance sheet data from two retailers: Abercrombie & Fitch (clothing retailer in the high-end market) and TJX Companies (clothing retailer in the value-priced market) (a) Express each income statement amount as a percentage of sales. Round your answers to one decimal place (ex: 0.2345-23.5%) Income Statement ANF $3,750 1,239 TJX $18,647 14,082 ($ millions) Sales Cost of goods sold 0% 0% Gross profit 2,511 4,565 0%...
JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per Share Amounts) (Note 1)* 2016 71,890 21,789 50.101 20,067 9.143 29 Sales to customers Cost of products sold Gross profit Selling, marketing and administrative expenses Research and development expense In-process research and development Interest income Interest expense, net of portion capitalized (Note 4) Other (income) expense, net Restructuring (Note 22) Eamings before provision for taxes on income Provision for taxes on income (Note 8)...
JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per Share Amounts) (Note 1)* 2016 71,890 21,789 50.101 20,067 9.143 29 Sales to customers Cost of products sold Gross profit Selling, marketing and administrative expenses Research and development expense In-process research and development Interest income Interest expense, net of portion capitalized (Note 4) Other (income) expense, net Restructuring (Note 22) Eamings before provision for taxes on income Provision for taxes on income (Note 8)...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 11 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 11 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 11 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 11 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 11 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 11 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 11 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 11 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 11 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 11 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 11 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 11 months ago