At the start of this chapter, you learned a little about Safeway and its history. Now let s look at the company s nancial performance in recent years. Refer to Safeway s income statement (on page 3

At the start of this chapter, you learned a little about Safeway and its history. Now let’s look at the

company’s financial performance in recent years. Refer to Safeway’s income statement (on page 35),

the balance sheet (on page 30), and the statement of cash flows (on page 39). Based on information

contained in these financial statements, answer the following questions:

1. As a percentage of total assets, did current assets increase or decrease from 2007 to 2008?

What was the primary reason for the change?

2. Divide gross profit by sales for 2007 and 2008. For which year is the gross profit percent-

age higher? What does that change represent?

3. In 2008, did Safeway generate enough cash from operations to fund all of its investing

activities? Did Safeway generate enough cash from operations to cover both its investing

and its financing activities?

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