International Business Entity of Gap Inc Assignment

International Business Entity of hoo-hah Inc - Assignment Examplewell-nigh 12.4 % of all business establishments in US are involved in the retail labor and the rough-cut margin of the industry is between 31% and 33%. There is stiff competition in the retail industry and this has seen the sales of Gap Inc drop significantly. Apart from the drop in sales, the play along has also been experiencing a decrease in the number of customers. This prompted the company to explore strategies of improving on their sales. The company adopted any(prenominal) measures such as markdowns, aggressive promotion and product campaigns among others. This has caused a recent improvement in the sales of the company though slight. A pecuniary analysis of Gap Inc is critical at this time to square the financial soundness of the company. monetary analysis is the process of selecting, evaluating and interpreting discipline from the financial statements of a company in pitch to obtain information for d ecision-making. Financial statements puddle to be interpreted in order to make sense to decision makers in the stiff. Financial analysis makes sense out of the financial statements and this enables decision-making. Financial statement analysis is therefore a very important tool for the success and growth of an organization. It provides information for decision making either outside or inside the organization. The main tool used to conceive out financial analysis is the dimension analysis. ...data include the press releases about the economy or industry performance and economic data such as the gross domestic product (Block & Geoffrey, 2009). It is important for the financial analyst to make a careful selection of relevant data for analysis. All data essential be obtained before beginning the process. There are numerous financial ratios. A ratio is an grimace of quantitative relationship between elements (Helfert, 2001). Financial ratios are classified into various categories s uch as liquidity ratios, profitability ratios and activity ratios among others. These ratios are classified based on the information they provide for decision makers of the company. Gap Inc. Mission The mission statement of Gap Inc. is that the firm never stops moving. The firm takes many talented, impassioned and dedicated workers across the world to deliver the products of the firm and enable customers have their expected and wonderful obtain experience. Financial Ratio Analysis 1. Ratios measuring the Liquidity of Gap Inc. The ratios are vital for the operations of the firm since they help in determination of the ability of the corporation from trifleing its daily operations. Gap Inc. is expected to have high liquidity in order to assure its stakeholders of continued operations. Therefore, high liquidity ratios are approbatory for the corporation. These assets are also known as liquid assets and they include cash, bank deposits, stock, and notes receivable among others (Vanc e, 2002). a) Current ratio Current ratio is the ratio of current assets to current liabilities and it is an indicator of the ability of a company to meet current liabilities using current assets.