When looking at The Gap, Inc 2011 annual report (Form 10-K) at first it was a little bit intimidating with it being close to a hundred pages of financial information. But when looking at this information section by section it is easily seen that for the most part, this information is rather straight forward and gives a lot of good information on the company’s current financial condition. It uses a lot of comparisons with the figures from years past to give stockholders a good idea of what the company is doing and what the company expects to do in the future. Item 1- The Business-
Under item 1 it gives the general background information of the company. The Gap was incorporated in the State of California in 1969, and then reincorporated under the laws of the state of Delaware in 1988. The Gap offers products in apparel, accessories, and personal care, with products for men, women, children, and babies. They sell these products under different company names: The Gap, Old Navy, Banana Republic, Piperlime, and Athleta, where products are sold in retail locations or online. Gap, Inc has company-operated stores in the United States, Canada, United Kingdom, France, Ireland, Japan, China, and Italy. Other information included with general business information was: merchandise vendors, franchising, inventory, competitors, employees, and executive officer profiles. Item 1A- Risk Factors-
Also included under item 1 was liability factors that the company was at risk of incurring in the day-to-day operations of the business. Some of the risks that the company was liable for was, global economic conditions that could adversely impact the results of operations, such as high unemployment, fluctuating interest rates, fuel, and energy costs. Also The Gap is competing in a highly competitive market, where they compete on a local, national, and global level against many different forms of similar companies. They are also at the mercy of the independent third party manufactures that manufacture nearly all of the products that are sold. During the fiscal year 2011 there was a substantial rise in the price of cotton that put significant pressure on the average unit costs, and gross margin. These are just a few examples of the many different types of risk that this company is liable for. Item 2- Properties-
Included under item 2 is the breakdown of properties owned/leased by Gap Inc. It shows that almost all of the company’s 37.2 million square feet of company-operated stores are leased, and they have one or more renewal options after the initial term. While they own 1.2 million square feet of corporate office space that is located in San Francisco, San Bruno, and Rocklin, California the company also leases 1.2 million square feet of regional offices (9) in North America and international offices (27). The Gap also owns approximately 8.6 million square feet in distribution space and they lease 2.4 million square feet of distribution space located in North America and United Kingdom. Item 3- Legal Proceedings-
Included in item 3 are the legal proceedings that could arise from some of the listed risk factors included in 1A. This saying a company that operates on a multinational basis are subject to many different types of proceedings, lawsuits, disputes, and claims arising in the ordinary course of business. They basically say they cannot predict with assurance the outcome of actions brought against the business, but they don’t believe that any current action would have an effect on their financial results. Item 5- Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities-
Item 5 describes that the principal market on which the stock is traded is the New York Stock Exchange. It shows the number of stockholders as of March 13, 2012 was 8,396, and has a table that lists the market prices of shares, and dividends paid for each quarter of the fiscal years 2010 and 2011. Also under item...
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