1. Use the financial statement, calculate the American Apparels financial ratios for the last five years
Leverage Ratio Analysis
- Ratio of Total Liabilities-To-Total Assets
- Ratio of Long-Term Liabilities-To-Equity
- Ratio of Total Liabilities-To-Equity
Coverage Ratio Analysis
Liquidity and Solvency Ratio Analysis
- Current Ratio
- Quick Ratio
Efficiency Ratio Analysis
- Working Capital Turnover
- Inventory Turnover
- Receivable Turnover
Profitability Ratio Analysis
- Net Profit Margin Ratio
- Gross Profit Ratio
- Rate Earned on Equity
- Rate Earned on Assets
Cash Performance
- Operating Cash Return on Equity
- Operating Cash Return on Assets
- Operating Cash Return to Revenue
2. Analyze the five years (from 2009 - 2013) financial statements of America Apparel on the basis of its common size statements.
EXHIBIT 2: AMERICAN APPAREL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS, 2009-2014 (Amounts and shares in thousands, except per share amounts) Years Ended December 31, 2013 2012 2011 2010 2009 Net sales $ 633,941 5617,310 $ 547,336 5 532,989 $ 558,775 Cost of sales 313,056 289,927 252,436 253,080 238,863 Gross profit 320,885 327,383 294,900 279,909 319,912 Selling expenses 241,683 227,447 209,841 218,198 198,518 General and administrative expenses 106,957 97,327 104,085 103, 167 93,636 Retail store impairment 1,540 1,647 4,267 8,597 3,343 (Loss) income from operations (29,295) 962 (23,293) (50,053) 24,415 Interest expense 39,286 41,559 33, 167 23,752 22,627 Foreign currency transaction loss 1 120 1,679 (686) (2.920) Unrealized loss (gain) on change in fair value of warrants and purchase rights 3,713 4,126 (23,467) 993 Loss (gain) on extinguishment of debt 32,101 (11,588) 3,114 Other expense (income) 131 204 (193) 39 (220) Loss before income taxes (104,527) (33,459) (37,593) (74,151) 4,928 Income tax provision 1,771 3,813 1,721 12,164 3,816 Net loss $ (106,298) 5 (37,272) $ (39,314) $ (86,315) $ 1,112 Basic and diluted loss per share $ (0.96) $ (0.35) S (0.42) 5 (1.21) 5 0.02 Weighted average basic and diluted shares $ (1.21) $ 0.01 outstanding 110,326 105,980 92,599 71,626 71,026 Net loss (from above) $ (106,298) $ (37,272) $ (39,314) $ (86,315) $ 1,112 Other comprehensive (loss) income item: Foreign currency translation, net of tax (1,581) 631 (188) (1,085) 620 Other comprehensive (loss) income, net of tax (1,581) (188) (1,085) 620 Comprehensive loss S (107,879) S (36,641) $ (39,502) 5 (87,400) 5 1.732 Source: Compiled by the author from American Apparel's annual reports, year 2009 - 2013. American Apparel, Inc., Edgar Online, accessed March 27, 2016. 631 EXHIBIT 3: AMERICAN APPAREL INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET, 2008-2013 December 31 2011 2013 2012 2010 2009 2008 $ 8,676 $ 12,853 $ 10,293 $ 7,656 S 9,046 $ 11,368 20,701 22.962 20,939 16,688 16,907 16.439 3.733 15,636 9,589 7,631 9,401 9,994 5,369 169,378 174,229 185,764 178,052 141,235 148,154 306 530 5.955 4,114 4,494 604 599 494 148 626 4.627 3,935 215,296 224, 390 230,730 216,537 186,303 185,869 69,303 67,778 67,438 85,400 103,310 112,408 2.426 1.261 1.529 1.695 12.033 10.137 46,727 34,783 25.024 24,318 25.933 25,195 $ 333,752 $328,212 $324,721 $327,950 $327,579 $333,609 $ 3,993 $ $ 1,921 $ 3,328 $ 3.741 $ 2,413 (Amounts and shares in thousands, except per share amounts) ASSETS CURRENT ASSETS Cash Trade accounts receivable Restricted cash Prepaid expenses and other current assets Inventories, net Income taxes receivable and prepaid income taxes Deferred income taxes, net of valuation allowance Total current assets Property and equopment, net Deffered taxes Other assets, bet TOTAL ASSETS LIABILITIES AND STOCKHOLDERS DEFICIT) EQUITY CURRENT LIABILITIES Cash overdraft Revolving credit facilities and current portion of long-term debt Accounts payable Accrued expenses and other current liabilities Fair value of warrant liability Income taxes payable Deferred income tax liability, curent Current portion of capital lease obligations Total current liabilities LONG-TERM DEBT.net of namortized discount of $5,779 and $27.929 at December 31, 2013 and 2012, respectively Subordinated notes payble to related party Capital lease obligations net of current portion Deferred tax hability Deferred rent, net of current portion Other long-term liabilities Total Long-Term Liabilites TOTAL LIABILITIES STOCKHOLDERS (DEFICIT) EQUITY Shares outstanding at December 31, 2012 Additional pand-an capital Accumulated other comprehensive loss Accumulated deficit Less: Treasury stock, 304 shares at cost TOTAL STOCKHOLDERS' DEFICIT) EQUITY TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY 138,478 31,534 39,028 993 6,346 19.705 30.573 2,608 44,042 38,290 50,018 20,954 1,742 1.241 1,709 161,989 50,375 33,920 43,725 9,633 2,445 150 1.181 143.350 34 318 32,731 22.140 8,582 60,556 38,160 41,516 17,241 2,137 296 1.703 161,609 230 2.616 560 214, 151 1.907 64,880 102,800 213,468 5.453 97.142 110.012 2.844 536 18.225 11.485 249,167 411.156 262 20,706 10,695 144 519 306,128 1,726 96 22,231 12.046 133,241 276,591 444 4,611 65.997 67,050 542 4355 3,292 260 1,020 1.986 24,924 22.052 16.011 7,994 11.934 6,058 38,775 105,358 94 397 252.926 $ 170,238 $ 197,197 7 11 11 11 8 7 185,472 177,081 166,486 153,881 150,449 131,252 (4,306) (2.725) (3.356) (3.168) (2.083) (2,703) (256,424) (150,126) (112.854) (73,540) 19,012 17.900 (2,157) (2,157) (2.157 (2.157) (10,044) (10,044) 67.404 22,084 48,130 75,024 157,341 136,412 $ 333.752 $328,212 $324 721 $327.950 $327 579 $333,609 Source: Compiled by the author from American Apparel's 8-K reports for the year 2008-2013 American Apparel, Inc., Edgar Online, accessed March 27, 2016. EXHIBIT 2: AMERICAN APPAREL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS, 2009-2014 (Amounts and shares in thousands, except per share amounts) Years Ended December 31, 2013 2012 2011 2010 2009 Net sales $ 633,941 5617,310 $ 547,336 5 532,989 $ 558,775 Cost of sales 313,056 289,927 252,436 253,080 238,863 Gross profit 320,885 327,383 294,900 279,909 319,912 Selling expenses 241,683 227,447 209,841 218,198 198,518 General and administrative expenses 106,957 97,327 104,085 103, 167 93,636 Retail store impairment 1,540 1,647 4,267 8,597 3,343 (Loss) income from operations (29,295) 962 (23,293) (50,053) 24,415 Interest expense 39,286 41,559 33, 167 23,752 22,627 Foreign currency transaction loss 1 120 1,679 (686) (2.920) Unrealized loss (gain) on change in fair value of warrants and purchase rights 3,713 4,126 (23,467) 993 Loss (gain) on extinguishment of debt 32,101 (11,588) 3,114 Other expense (income) 131 204 (193) 39 (220) Loss before income taxes (104,527) (33,459) (37,593) (74,151) 4,928 Income tax provision 1,771 3,813 1,721 12,164 3,816 Net loss $ (106,298) 5 (37,272) $ (39,314) $ (86,315) $ 1,112 Basic and diluted loss per share $ (0.96) $ (0.35) S (0.42) 5 (1.21) 5 0.02 Weighted average basic and diluted shares $ (1.21) $ 0.01 outstanding 110,326 105,980 92,599 71,626 71,026 Net loss (from above) $ (106,298) $ (37,272) $ (39,314) $ (86,315) $ 1,112 Other comprehensive (loss) income item: Foreign currency translation, net of tax (1,581) 631 (188) (1,085) 620 Other comprehensive (loss) income, net of tax (1,581) (188) (1,085) 620 Comprehensive loss S (107,879) S (36,641) $ (39,502) 5 (87,400) 5 1.732 Source: Compiled by the author from American Apparel's annual reports, year 2009 - 2013. American Apparel, Inc., Edgar Online, accessed March 27, 2016. 631 EXHIBIT 3: AMERICAN APPAREL INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET, 2008-2013 December 31 2011 2013 2012 2010 2009 2008 $ 8,676 $ 12,853 $ 10,293 $ 7,656 S 9,046 $ 11,368 20,701 22.962 20,939 16,688 16,907 16.439 3.733 15,636 9,589 7,631 9,401 9,994 5,369 169,378 174,229 185,764 178,052 141,235 148,154 306 530 5.955 4,114 4,494 604 599 494 148 626 4.627 3,935 215,296 224, 390 230,730 216,537 186,303 185,869 69,303 67,778 67,438 85,400 103,310 112,408 2.426 1.261 1.529 1.695 12.033 10.137 46,727 34,783 25.024 24,318 25.933 25,195 $ 333,752 $328,212 $324,721 $327,950 $327,579 $333,609 $ 3,993 $ $ 1,921 $ 3,328 $ 3.741 $ 2,413 (Amounts and shares in thousands, except per share amounts) ASSETS CURRENT ASSETS Cash Trade accounts receivable Restricted cash Prepaid expenses and other current assets Inventories, net Income taxes receivable and prepaid income taxes Deferred income taxes, net of valuation allowance Total current assets Property and equopment, net Deffered taxes Other assets, bet TOTAL ASSETS LIABILITIES AND STOCKHOLDERS DEFICIT) EQUITY CURRENT LIABILITIES Cash overdraft Revolving credit facilities and current portion of long-term debt Accounts payable Accrued expenses and other current liabilities Fair value of warrant liability Income taxes payable Deferred income tax liability, curent Current portion of capital lease obligations Total current liabilities LONG-TERM DEBT.net of namortized discount of $5,779 and $27.929 at December 31, 2013 and 2012, respectively Subordinated notes payble to related party Capital lease obligations net of current portion Deferred tax hability Deferred rent, net of current portion Other long-term liabilities Total Long-Term Liabilites TOTAL LIABILITIES STOCKHOLDERS (DEFICIT) EQUITY Shares outstanding at December 31, 2012 Additional pand-an capital Accumulated other comprehensive loss Accumulated deficit Less: Treasury stock, 304 shares at cost TOTAL STOCKHOLDERS' DEFICIT) EQUITY TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY 138,478 31,534 39,028 993 6,346 19.705 30.573 2,608 44,042 38,290 50,018 20,954 1,742 1.241 1,709 161,989 50,375 33,920 43,725 9,633 2,445 150 1.181 143.350 34 318 32,731 22.140 8,582 60,556 38,160 41,516 17,241 2,137 296 1.703 161,609 230 2.616 560 214, 151 1.907 64,880 102,800 213,468 5.453 97.142 110.012 2.844 536 18.225 11.485 249,167 411.156 262 20,706 10,695 144 519 306,128 1,726 96 22,231 12.046 133,241 276,591 444 4,611 65.997 67,050 542 4355 3,292 260 1,020 1.986 24,924 22.052 16.011 7,994 11.934 6,058 38,775 105,358 94 397 252.926 $ 170,238 $ 197,197 7 11 11 11 8 7 185,472 177,081 166,486 153,881 150,449 131,252 (4,306) (2.725) (3.356) (3.168) (2.083) (2,703) (256,424) (150,126) (112.854) (73,540) 19,012 17.900 (2,157) (2,157) (2.157 (2.157) (10,044) (10,044) 67.404 22,084 48,130 75,024 157,341 136,412 $ 333.752 $328,212 $324 721 $327.950 $327 579 $333,609 Source: Compiled by the author from American Apparel's 8-K reports for the year 2008-2013 American Apparel, Inc., Edgar Online, accessed March 27, 2016
