Question

ANNUAL REPORT OF TOYS "R" US Intended for Uise after Chapter 8. In this appendix we present the 1995 annual report of Toys "R" Us, a publicly held corporation. This report was selected to illustrate many of the financial reporting concepts discussed in this textbook. But not all of the terminology and accounting policies appearing in this report are consistent with our text discussions. This illustrates some of the diversity that exists in financial reporting. TOSUs ANNUAL REPORT YEAR END ED JANUARY 28. 1 99s

7. a. What was the amount of net sales during the 4^th quarter of the fiscal year ended January 28, 1995?

b. What was the percentage change in this 4^th quarter’s net sales relative to sales in the 4^th quarter of the prior year?

c. Comment upon the pattern of quarterly sales within the year, and offer your own explanation for this pattern.

8. What does management point out as evidence of the company’s strong financial position (liquidity)?

9. a. How many stores did the company operate at the end of the fiscal year ended January 28, 1995?

b. How many stores does it plan to open during 1995 (the next fiscal year)?

10. a. In how many foreign countries did the company’s International Division operate during 1994?

b. In what specific countries did the company begin operations in 1994?

Other Notes:

- Toys “R” Us ends its fiscal years on unusual dates. Before answering questions about this company’s financial statements, read the note Fiscal Year on page D-11 of the annual report.

- Annual reports include not only comparative financial statements, but also the following sources of information:

a. Financial highlights, a summary of key statistics for the past 5 or 10 years.

b. A letter from management addressed To Our Stockholders.

c. A discussion by management of the results of operations and the company’s financial condition.

d. Several pages of Notes that accompany the financial statements.

e. Reports by management and by the independent auditors in which they express their respective responsibilities for the financial statements.

- Answer each of the following questions and briefly explain where in the statements, notes, or other sections of the annual report you located the information used in your answer.

Answer 1

Part 7: Sub part a: Amount of net sales during the fourth quarter of the fiscal year ended jan 28,1995 (Found under the heading quarterly financial data) Subpart b: 4,200,191 Net sales of fourt quarter for the year ended jan 28, 1995 S4,200,191 Net sales of fourt quarter for the year ended jan 28, 1994 S 3,893,458 Percentage of change (4,200,191-3,893,458) /3,893,458 100 -7.878% increase { Found under the heading quarterly financial data ) Subpart c: by looking the pattern of sales, it is clearly showing that the sales are high in last two quarters when compared to first two quarters. Sales are high especially in the fourth quarter and it is a continuing trend when we observe the facts of previous year Part 8 Working capital is the indicator of liquidity positon of a company. The company has huge working capital at the end of fiscal year Therefore management pointed working capitalas evidence of company's strong financial position which is S 394 million at the end year jan 28, 1995 Found in LIQUIDITY AND CAPITAL RESOURCES notes)

Part 9: Subpart a Toys R Us United states International stores 618 293 Kids R Us United states Total stores { Found under Financial highlights} Subpart b Following are the stores planned to be opened in the year 1995 Toys R Us United states International stores Kids R Us United states Total stores 204 1115 40 50 10 100 Found under store growth notes

Part 10 Subpart a: The company is opearting in 20 foreign countries internationally. (Found in page of Table of contents under store location heading Subpart b: Company started opearations for the first time in Denmark, luxembourg, sweden and united arb emirates. Found in page of Table of contents under store location heading!