Let’s take a look at both current assets and current liabilities for three competitors in the retail sales marketplace:
|Macy’s, Inc.||Kohl’s, Inc.||Nordstrom, Inc.|
|Cash and cash equivalents||$ 685||$ 723||$ 853|
|Prepaid expenses and other current assets||528||389||278|
|$ 6,810||$ 4,649||$ 3,230|
|Short-term debt||$ 539||$ –||$ –|
|Accounts payable and accrued liabilities||5,130||2,439||3,276|
|Current portion of long-term debt||–||282||244|
|Working capital||$ 1,060||$ 1,880||$ (290)|
By now you should be recognizing these major categories of current liabilities and what they mean, as well as their relationship to the current assets. Just as current assets are expected to become cash in the near future, current liabilities are expected to consume cash in the near future. Based on this, both Macy’s and Kohl’s seemed to be in fairly good shape at the end of January of 2020. Nordstrom though shows more current debt than current assets.
- What else do you notice about the three companies?
- What do they have in common? Where are they drastically different?
- What more would you like to know about these companies?
Access the financial statements from the following links and discuss any details you find interesting that are not apparent in the above summary: