For many years Borders Group and Barnes and Noble

were #6297
For many years, Borders Group and Barnes and Noble were the dominant booksellers in the
United States. They experienced rapid growth, and in the process they forced many small,
independent bookstores out of business. Recently, Borders filed for bankruptcy. It was the
victim of its inability to change with the times. It did not develop a viable business plan for
dealing with digital books and online sales. Below is financial information (in millions) for the two
companies, taken from the annual reports of each company one year before Borders filed for
bankruptcy.Instructions(a) Compute the current ratio for each company.(b) Compute the debt to
assets ratio and times interest earned for each company. (A tax benefit means that rather than
pay taxes, the company was due a refund because of its losses. For ratio purposes, a tax
benefit is treated the opposite of tax expense.)(c) Discuss the relative liquidity and solvency of
each company. Did the bankruptcy ofBorders seem likely?View Solution:
For many years Borders Group and Barnes and Noble were

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