Unload Shares of Great Atlantic & Pacific Tea

Cash and cash equivalents at the end of the third quarter dwindled 72.9% to $165.58 million from $611.52 million. Moreover, a quick ratio of 0.47 reflects the company's potential inability to cover any short-term cash needs. Total debt more than doubled to $1.49 billion from $538.29 million.

Shareholders' equity soared 25.4% to $451.91 million from $360.36 million. As a result, the debt-to-equity ratio worsened to 3.29 from 1.49. Meanwhile, return on assets improved to a negative 2.43% from a negative 5.16% in the third quarter 2007, while return on equity deteriorated to a negative 10.48% from a positive 33.46% a year earlier.

During the quarter under review, GAP operated 444 stores compared to 322 stores in the year-ago quarter. The company realized approximately $30 million of synergies from the acquisition during the quarter comprised of reduced administrative, merchandise and store operating, marketing and advertising costs.

Looking forward, GAP continues to expect positive cash flow for the fourth quarter of 2008 and fiscal year 2009. Furthermore, the company plans to spend around $130 million during fiscal year 2009 for capital expenditures.