Posted by & filed under Financial Reporting and Analysis.

Description:   With too much debt and too much inventory, Payless Shoes will be seeking bankruptcy protection. All of its almost 250 stores in Canada will be shutting down. The company missed its February rent payments on most of those stores, signalling bad news for employees and landlords. One has to wonder if online sales may have been a big factor in the shoe-seller’s decline.

Date:  February 19 , 2019



Discussion points:  

1) Have you been a fan of Payless Shoes? When did you last shop there?

2) To what extent do you think online sales may have hampered Payless?

3) In this story we can read how Payless had too much inventory. Where in Wiley’s Financial Accounting: Tools for Business Decision-Making can you find two financial ratios that can help a company evaluate its inventory levels? What are those ratios?

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