1. Calculating Gross Profit and Preparing an Income Statement

In 2013, Adidas reported net sales of 14,492 million and cost of sales of 7,352 million. Its net income was 790 million. Calculate gross profit and prepare an income statement.

2. Applying the Accounting Equation and Calculating Return on Equity and Debt-to-Equity Ratio

At the end of 2013, Adidas Group reported equity of 5,481 million and total assets of 11,599 million. Its balance in equity at the end of 2012 was 5,291 million. Net income in 2013 was 790 million.

a. Calculate Adidas return on equity ratio for 2013.

b. Calculate its debt-to-equity ratio as of December 31, 2013. (Hint: Apply the accounting equation to determine total liabilities.)