Using Common Size Statements}

Gilsig Ltd. owns and operates a small chain of sportswear stores located near colleges and universities. Gilsig has experienced significant growth in recent years. The following data are available for Gilsig:

\section*{Required:}
1. Determine how much Gilsig's sales, net income, and assets have grown during these three years.
2. Explain how Gilsig has financed the increase in assets.
3. Determine whether Gilsig's liquidity is adequate.
4. CONCEPTUAL CONNECTION Explain why interest expense is growing.
5. If Gilsig's sales grow by \(25 \%\) in 2019 , what would you expect net income to be?
6. If Gilsig's assets must grow by \(25 \%\) to support the \(25 \%\) sales increase and if \(50 \%\) of net income is paid in dividends, how much capital must Gilsig raise in 2019?
\section*{OBJECTIVE 23 Problem

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Sales Cost of goods sold Gross margin Other income, net Costs and expenses: Selling and administrative Interest Total costs and expenses Income before income taxes Provision for income taxes Net income Gilsig Ltd. Consolidated Statements of Earnings in thousands) Year Ended December 31, 2018 2017 2016 $51,638 $41,310 $34,425 31,050 24,840 20,700 20,588 16,470 13,725 383 426 405 20,971 16,896 14,130 16,570 13,465 11,350 1,237 765 554 17,807 14,230 11,904 3,164 2,666 2,226 885 746 623 S 2,279 $ 1,920 $ 1,603