Question

Background Info:

(Gap Inc owns Gap, Banana Republic, Old Navy, Intermix, Hill City, and Athleta. Gap Inc. is the largest specialty retailer in the United States, and is 3rd in total international locations.)

1. What percentage of Gap’s total assets are current assets? ___53%_____
2. What percentage of Gap’s total assets are noncurrent assets? __47%_____

If you need more info, please do not try to answer the question. Just defining current and noncurrent assets is NOT answering the question.

Question:

Does it makes sense for a company like Gap to have 53% of total assets as current assets and 47% as non-current assets? Why?

Answer 1

Yes it is possible.

The Current assets may include Cash, Bank Balances,Stock, Debtors,Etc

The Non Current Assets involves investment in Fixed assets like Land,Building, Furniture etc.

the current assets are more liquid assets and encasheable with in a year.

so the company having more current assets than Non current asset means the company having more liquidity position

some times the company held assets for resale treated as current assets.in that cases also current assets show in high value