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In a recent press release, Foot Locker Inc. reported that its fiscal first-quarter net income fell 46% due to losses...

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In a recent press release, Foot Locker Inc. reported that its fiscal first-quarter net income fell 46% due to losses related to discontinued operations, but earnings from continuing operations jumped 19% amid a modest increase in sales. The specialty athletic retailer said net income was $20 million for the quarter ended May 4, compared with net income of $37 million a year earlier. The latest results included a loss of $18 million from discontinued operations. Last year, the company had earnings of $5 million, or four cents a share, from discontinued operations. Foot Locker said earnings from continuing operations were $38 million, compared with $32 million a year earlier.;Explain why net income, often referred to as ?the bottom line,? is not always a good predictor of future income and discuss how Foot Locker's press release relates to its earnings quality.

 

Paper#80630 | Written in 18-Jul-2015

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