Refer to Reebok’s financial statements in Appendix E. Review the balance sheet to determine how and where fixed assets and the associated accumulated depreciation were reported.

Required

a. Read Notes 1 and 4. Identify and discuss any unusual terms. Trace any numerical disclosures of fixed asset costs in the notes to corresponding disclosures in the financial statements.

b. Determine whether Reebok has any unusual fixed assets. If so, discuss how they might be interpreted by financial analysts. Discuss how Reebok’s managers might view such assets.

c. Identify Reebok’s accumulated depreciation balances at the end of each year.

If these items are not disclosed, what effects will this have on your analysis of the financial statements?

d. Calculate the following ratios for Reebok:

• Fixed asset turnover

• Percentage of PPE depreciated

e. Based on your answers above, how effectively is Reebok managing its longterm assets?