Let’s continue our examination of Dick’s Sporting Goods (Dick’s). Return to Dick’s Annual Report (see the Continuing Financial Statement Analysis Problem in Chapter 2 for instructions on how to access the Annual Report). Now answer the following questions:

1. Look at Dick’s balance sheet. How much cash and cash equivalents does Dick’s have as of January 28, 2017, and January 30, 2016? Did the amount go up or down?

2. Read through management’s discussion of cash and liquidity found on pages 26 through 28 in Dick’s 2016 annual report. Look at footnote 1 in Dick’s 2016 annual report (page 45). Why does Dick’s have this much cash and why do you think the amount changed during the past year?

3. Examine Dick’s balance sheet. How much accounts receivable, net of allowance for doubtful accounts (bad debt allowance), does Dick have as of January 28, 2017, and January 30, 2016?

4. Review footnote 1 of Dick’s 2016 annual report (page 45). What does it tell you about the accounts receivable?

5. Compute Dick’s current and quick ratios for the years ending January 28, 2017, and January 30, 2016. Have they changed? What do these ratios tell you about Dick’s management of liquidity?

6. Compute Dick’s accounts receivable turnover rate and receivable collection period for 2016. (Assume all sales are credit or debit card sales and thus are short-term receivables.) What do the turnover rate and collection period tell you about Dick’s management of receivables?

7. Looking back over your answers to questions 1 through 6, how do you think Dick’s is performing? What do you think about Dick’s management of cash and receivables?