Refer to Reebok’s financial statements in Appendix E. Review the financial statements to determine how and where shareholders’ equity has been reported.

Required

a. Calculate the financial leverage ratio for each year. Interpret your results.

b. Based on the notes, is there any other possible way in which the leverage ratio can be calculated? If so, do so by taking a more liberal (or more conservative) approach to reclassifying any convertible securities. Contrast these results with your earlier results.

c. Calculate the market-to-book value ratio. If market prices are not disclosed somewhere in the annual report, go to your library to determine the market price at the end of each fiscal year. Discuss your results.

d. Calculate the price-to-earnings ratio, using the market price determined above. Discuss your results.

e. Discuss any other unusual concerns regarding Reebok’s shareholders’ equity. What other related information might an external analyst require or prefer?