Appendix B Specimen Financial Statements: Columbia Sportswear Company Columbia Sportswear Company is a leader in outdoor sportswear. The following are Columbia's financial statements as presented in its 2020 annual report. The complete annual report, including notes to the financial statements, is available at the company's website. COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) ASSETS \begin{tabular}{|c|c|c|} \hline Current Assets: & & \\ \hline Cash and cash equivalents & $790,725 & $686,009 \\ \hline Short-term investments & 1,224 & 1,668 \\ \hline Accounts receivable, net of allowance of $21,810 and $8,925, respectively & 452,945 & 488,233 \\ \hline Inventories, net & 556,530 & 605,968 \\ \hline Prepaid expenses and other current assets & 54,197 & 93,868 \\ \hline Total current assets & 1,855,621 & 1,875,746 \\ \hline Property, plant and equipment, net & 309,792 & 346,651 \\ \hline Operating lease right-of-use assets & 339,244 & 394,501 \\ \hline Intangible assets, net & 103,558 & 123,595 \\ \hline Goodwill & 68,594 & 68,594 \\ \hline Deferred income taxes & 96,126 & 78,849 \\ \hline Other non-current assets & 63,636 & 43,655 \\ \hline Total assets & $2,836,571 & $2,931,591 \\ \hline LIABILITIES AND EQUITY & & \\ \hline \end{tabular} Current Liabilities: Accounts payable Accrued liabilities Operating lease liabilities Income taxes payable \begin{tabular}{|c|c|c|} \hline Income taxes payable & 23,181 & 15,801 \\ \hline Total current liabilities & 552,622 & 630,915 \\ \hline Non-current operating lease liabilities & 353,181 & 371,507 \\ \hline Income taxes payable & 49,922 & 48,427 \\ \hline Deferred income taxes & 5,205 & 6,361 \\ \hline Other long-term liabilities & 42,870 & 24,934 \\ \hline Total liabilities & 1,003,800 & 1,082,144 \\ \hline \multicolumn{3}{|l|}{ Commitments and contingencies (Note 12) } \\ \hline \multicolumn{3}{|l|}{ Shareholders' Equity: } \\ \hline Preferred stock; 10,000 shares authorized; none issued and outstanding & - & - \\ \hline Common stock (no par value); 250,000 shares authorized; 66,252 and 67,561 issued and outstanding, respectively & 20,165 & 4,937 \\ \hline Retained earnings & 1,811,800 & 1,848,935 \\ \hline Accumulated other comprehensive income (loss) & 806 & (4,425) \\ \hline Total shareholders' equity & 1,832,771 & 1,849,447 \\ \hline Total liabilities and shareholders' equity & $2,836,571 & $2,931,591 \\ \hline \end{tabular} See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF EQUITY (In thousands, except per share amounts) Columbia Snortswear Comnanv Shareholders' Eauitv for-sale securities, net \begin{tabular}{|c|c|c|c|c|c|c|} \hline \begin{tabular}{l} Unrealized holding gains on derivative \\ transactions, net \end{tabular} & - & - & - & 23,195 & 1,067 & 24,262 \\ \hline \begin{tabular}{l} Foreign currency translation \\ adjustment, net \end{tabular} & - & - & - & (17,800) & (279) & (18,079) \\ \hline Cash dividends ( $0.90 per share) & - & - & (62,664) & - & - & (62,664) \\ \hline Dividends to non-controlling interest & - & - & - & - & (21,332) & (21,332) \\ \hline Adoption of new accounting standards & - & - & 14,600 & (515) & - & 14,085 \\ \hline \begin{tabular}{l} Issuance of common stock related to stock- \\ based compensation, net \end{tabular} & 600 & 14,199 & - & - & - & 14,199 \\ \hline Stock-based compensation expense & - & 14,291 & - & - & - & 14,291 \\ \hline Repurchase of common stock & (2,349) & (74,319) & (127,281) & - & - & (201,600) \\ \hline BALANCE, DECEMBER 31, 2018 & 68,246 & - & 1,677,920 & (4,063) & 16,456 & 1,690,313 \\ \hline Net income & - & - & 330,489 & - & - & 330,489 \\ \hline Purchase of non-controlling interest & - & - & - & (99) & (16,456) & (16,555) \\ \hline \multicolumn{7}{|l|}{ Other comprehensive income (loss): } \\ \hline \begin{tabular}{l} Unrealized holding gains on available- \\ for-sale securities, net \end{tabular} & - & - & - & 56 & - & 56 \\ \hline \begin{tabular}{l} Unrealized holding losses on derivative \\ transactions, net \end{tabular} & - & - & - & (2,383) & - & (2,383) \\ \hline \begin{tabular}{l} Foreign currency translation \\ adjustment, net \end{tabular} & - & - & - & 2,064 & - & 2,064 \\ \hline Cash dividends ( $0.96 per share) & - & - & (65,127) & - & - & (65,127) \\ \hline \begin{tabular}{l} Issuance of common stock related to stock- \\ based compensation, net \end{tabular} & 558 & 13,987 & - & - & - & 13,987 \\ \hline Stock-based compensation expense & - & 17,832 & - & - & - & 17,832 \\ \hline Repurchase of common stock & (1,243) & (26,882) & (94,347) & - & - & (121,229) \\ \hline BALANCE, DECEMBER 31, 2019 & 67,561 & 4,937 & 1,848,935 & (4,425) & & 1,849,447 \\ \hline Net income & - & - & 108,013 & - & - & 108,013 \\ \hline \multicolumn{7}{|l|}{ Other comprehensive income (loss): } \\ \hline \begin{tabular}{l} Unrealized holding gains on available- \\ for-sale securities, net \end{tabular} & - & - & - & 4 & - & 4 \\ \hline \begin{tabular}{l} Unrealized holding losses on derivative \\ transactions, net \end{tabular} & - & - & - & (18,851) & - & (18,851) \\ \hline Cash dividends ( $0.26 per share) & - & - & (17,195) & - & - & (17,195) \\ \hline \begin{tabular}{l} Issuance of common stock related to stock- \\ based compensation, net \end{tabular} & 248 & 2,386 & - & - & - & 2,386 \\ \hline Stock-based compensation expense & - & 17,778 & - & - & - & 17,778 \\ \hline Repurchase of common stock & (1,557) & (4,936) & (127,953) & - & - & (132,889) \\ \hline BALANCE, DECEMBER 31, 2020 & 66,252 & 20,165 & 1,811,800 & 806 & - & 1,832,771 \\ \hline \end{tabular} See accompanying notes to consolidated financial statements See accompanying notes. Under Armour, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity (In thousands) \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline \begin{tabular}{l} Balance as of \\ December 31,2018 \end{tabular} & 187,710 & $62 & 34,450 & $11 & 226,422 & $75 & $916,628 & $1,139,082 & $(38,987) & $2,016,871 \\ \hline \begin{tabular}{l} Balance as of \\ December 31,2018 \end{tabular} & 187,710 & $62 & 34,450 & $11 & 226,422 & $75 & $916,628 & $1,139,082 & $(38,987) & $2,016,871 \\ \hline \begin{tabular}{l} Exercise of stock \\ options and warrants \end{tabular} & 441 & - & - & - & 293 & - & 2,101 & - & - & 2,101 \\ \hline \begin{tabular}{l} Shares withheld in \\ consideration of \\ employee tax \\ obligations relative to \\ stock-based \\ compensation \\ arrangements \end{tabular} & (15) & - & - & - & (227) & - & - & (4,235) & - & (4,235) \\ \hline \begin{tabular}{l} Issuance of Class A \\ Common Stock, net of \\ forfeitures \end{tabular} & 154 & - & - & - & - & - & - & - & - & - \\ \hline \begin{tabular}{l} Issuance of Class C \\ Common Stock, net of \\ forfeitures \end{tabular} & - & - & - & - & 2,540 & 1 & 5,370 & - & - & 5,371 \\ \hline \begin{tabular}{l} Stock-based \\ compensation expense \end{tabular} & - & - & - & - & - & - & 49,618 & - & - & 49,618 \\ \hline Comprehensive loss & & & & & & & - & 92,139 & (11,778) & 80,361 \\ \hline \begin{tabular}{l} Balance as of \\ December 31,2019 \end{tabular} & 188,290 & $62 & 34,450 & $11 & 229,028 & $76 & $973,717 & $1,226,986 & $(50,765) & $2,150,087 \\ \hline \begin{tabular}{l} Exercise of stock \\ options \end{tabular} & 148 & - & - & - & 136 & - & 517 & - & - & 517 \\ \hline \begin{tabular}{l} Shares withheld in \\ consideration of \\ employee tax \\ obligations relative to \\ stock-based \\ compensation \\ arrangements \end{tabular} & (1) & - & - & - & (262) & - & - & (3,954) & - & (3,954) \\ \hline \begin{tabular}{l} Issuance of Class C \\ Common Stock, net of \\ forfeitures \end{tabular} & - & - & - & - & 3,052 & 1 & 4,225 & - & - & 4,226 \\ \hline \begin{tabular}{l} Stock-based \\ compensation expense \end{tabular} & - & - & - & - & - & - & 42,070 & - & - & 42,070 \\ \hline \begin{tabular}{l} Equity Component \\ value of convertible \\ notes issuance, net \end{tabular} & - & - & - & - & - & - & 40,644 & - & - & 40,644 \\ \hline \begin{tabular}{l} Comprehensive income \\ (loss) \end{tabular} & & & = & - & & - & - & (549,177) & (8,420) & (557,597) \\ \hline \end{tabular} The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of Under Armour, In are presented in Appendix C. Click here to view Appendix B. Click here to view Appendix C. (a) Based on the information contained in these financial statements, determine the following values for each company. (Round percentage answers to 1 decimal place, e.g. 52.7\% and other answers to 0 decimal place, e.g. 5,275. Enter negative answers using either a negative sign preceding the number e.g. 45% or parentheses e.g. (45)\%.) 1. Profit margin for 2020. 2. Gross profit for 2020 . 3. Gross profit rate for 2020 . 4. Operating income for 2020 . 5. Percentage change in Income from operations from 2019 to 2020. Appendix B Specimen Financial Statements: Columbia Sportswear Company Columbia Sportswear Company is a leader in outdoor sportswear. The following are Columbia's financial statements as presented in its 2020 annual report. The complete annual report, including notes to the financial statements, is available at the company's website. COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) ASSETS \begin{tabular}{|c|c|c|} \hline Current Assets: & & \\ \hline Cash and cash equivalents & $790,725 & $686,009 \\ \hline Short-term investments & 1,224 & 1,668 \\ \hline Accounts receivable, net of allowance of $21,810 and $8,925, respectively & 452,945 & 488,233 \\ \hline Inventories, net & 556,530 & 605,968 \\ \hline Prepaid expenses and other current assets & 54,197 & 93,868 \\ \hline Total current assets & 1,855,621 & 1,875,746 \\ \hline Property, plant and equipment, net & 309,792 & 346,651 \\ \hline Operating lease right-of-use assets & 339,244 & 394,501 \\ \hline Intangible assets, net & 103,558 & 123,595 \\ \hline Goodwill & 68,594 & 68,594 \\ \hline Deferred income taxes & 96,126 & 78,849 \\ \hline Other non-current assets & 63,636 & 43,655 \\ \hline Total assets & $2,836,571 & $2,931,591 \\ \hline LIABILITIES AND EQUITY & & \\ \hline \end{tabular} Current Liabilities: Accounts payable Accrued liabilities Operating lease liabilities Income taxes payable \begin{tabular}{|c|c|c|} \hline Income taxes payable & 23,181 & 15,801 \\ \hline Total current liabilities & 552,622 & 630,915 \\ \hline Non-current operating lease liabilities & 353,181 & 371,507 \\ \hline Income taxes payable & 49,922 & 48,427 \\ \hline Deferred income taxes & 5,205 & 6,361 \\ \hline Other long-term liabilities & 42,870 & 24,934 \\ \hline Total liabilities & 1,003,800 & 1,082,144 \\ \hline \multicolumn{3}{|l|}{ Commitments and contingencies (Note 12) } \\ \hline \multicolumn{3}{|l|}{ Shareholders' Equity: } \\ \hline Preferred stock; 10,000 shares authorized; none issued and outstanding & - & - \\ \hline Common stock (no par value); 250,000 shares authorized; 66,252 and 67,561 issued and outstanding, respectively & 20,165 & 4,937 \\ \hline Retained earnings & 1,811,800 & 1,848,935 \\ \hline Accumulated other comprehensive income (loss) & 806 & (4,425) \\ \hline Total shareholders' equity & 1,832,771 & 1,849,447 \\ \hline Total liabilities and shareholders' equity & $2,836,571 & $2,931,591 \\ \hline \end{tabular} See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF EQUITY (In thousands, except per share amounts) Columbia Snortswear Comnanv Shareholders' Eauitv for-sale securities, net \begin{tabular}{|c|c|c|c|c|c|c|} \hline \begin{tabular}{l} Unrealized holding gains on derivative \\ transactions, net \end{tabular} & - & - & - & 23,195 & 1,067 & 24,262 \\ \hline \begin{tabular}{l} Foreign currency translation \\ adjustment, net \end{tabular} & - & - & - & (17,800) & (279) & (18,079) \\ \hline Cash dividends ( $0.90 per share) & - & - & (62,664) & - & - & (62,664) \\ \hline Dividends to non-controlling interest & - & - & - & - & (21,332) & (21,332) \\ \hline Adoption of new accounting standards & - & - & 14,600 & (515) & - & 14,085 \\ \hline \begin{tabular}{l} Issuance of common stock related to stock- \\ based compensation, net \end{tabular} & 600 & 14,199 & - & - & - & 14,199 \\ \hline Stock-based compensation expense & - & 14,291 & - & - & - & 14,291 \\ \hline Repurchase of common stock & (2,349) & (74,319) & (127,281) & - & - & (201,600) \\ \hline BALANCE, DECEMBER 31, 2018 & 68,246 & - & 1,677,920 & (4,063) & 16,456 & 1,690,313 \\ \hline Net income & - & - & 330,489 & - & - & 330,489 \\ \hline Purchase of non-controlling interest & - & - & - & (99) & (16,456) & (16,555) \\ \hline \multicolumn{7}{|l|}{ Other comprehensive income (loss): } \\ \hline \begin{tabular}{l} Unrealized holding gains on available- \\ for-sale securities, net \end{tabular} & - & - & - & 56 & - & 56 \\ \hline \begin{tabular}{l} Unrealized holding losses on derivative \\ transactions, net \end{tabular} & - & - & - & (2,383) & - & (2,383) \\ \hline \begin{tabular}{l} Foreign currency translation \\ adjustment, net \end{tabular} & - & - & - & 2,064 & - & 2,064 \\ \hline Cash dividends ( $0.96 per share) & - & - & (65,127) & - & - & (65,127) \\ \hline \begin{tabular}{l} Issuance of common stock related to stock- \\ based compensation, net \end{tabular} & 558 & 13,987 & - & - & - & 13,987 \\ \hline Stock-based compensation expense & - & 17,832 & - & - & - & 17,832 \\ \hline Repurchase of common stock & (1,243) & (26,882) & (94,347) & - & - & (121,229) \\ \hline BALANCE, DECEMBER 31, 2019 & 67,561 & 4,937 & 1,848,935 & (4,425) & & 1,849,447 \\ \hline Net income & - & - & 108,013 & - & - & 108,013 \\ \hline \multicolumn{7}{|l|}{ Other comprehensive income (loss): } \\ \hline \begin{tabular}{l} Unrealized holding gains on available- \\ for-sale securities, net \end{tabular} & - & - & - & 4 & - & 4 \\ \hline \begin{tabular}{l} Unrealized holding losses on derivative \\ transactions, net \end{tabular} & - & - & - & (18,851) & - & (18,851) \\ \hline Cash dividends ( $0.26 per share) & - & - & (17,195) & - & - & (17,195) \\ \hline \begin{tabular}{l} Issuance of common stock related to stock- \\ based compensation, net \end{tabular} & 248 & 2,386 & - & - & - & 2,386 \\ \hline Stock-based compensation expense & - & 17,778 & - & - & - & 17,778 \\ \hline Repurchase of common stock & (1,557) & (4,936) & (127,953) & - & - & (132,889) \\ \hline BALANCE, DECEMBER 31, 2020 & 66,252 & 20,165 & 1,811,800 & 806 & - & 1,832,771 \\ \hline \end{tabular} See accompanying notes to consolidated financial statements See accompanying notes. Under Armour, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity (In thousands) \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline \begin{tabular}{l} Balance as of \\ December 31,2018 \end{tabular} & 187,710 & $62 & 34,450 & $11 & 226,422 & $75 & $916,628 & $1,139,082 & $(38,987) & $2,016,871 \\ \hline \begin{tabular}{l} Balance as of \\ December 31,2018 \end{tabular} & 187,710 & $62 & 34,450 & $11 & 226,422 & $75 & $916,628 & $1,139,082 & $(38,987) & $2,016,871 \\ \hline \begin{tabular}{l} Exercise of stock \\ options and warrants \end{tabular} & 441 & - & - & - & 293 & - & 2,101 & - & - & 2,101 \\ \hline \begin{tabular}{l} Shares withheld in \\ consideration of \\ employee tax \\ obligations relative to \\ stock-based \\ compensation \\ arrangements \end{tabular} & (15) & - & - & - & (227) & - & - & (4,235) & - & (4,235) \\ \hline \begin{tabular}{l} Issuance of Class A \\ Common Stock, net of \\ forfeitures \end{tabular} & 154 & - & - & - & - & - & - & - & - & - \\ \hline \begin{tabular}{l} Issuance of Class C \\ Common Stock, net of \\ forfeitures \end{tabular} & - & - & - & - & 2,540 & 1 & 5,370 & - & - & 5,371 \\ \hline \begin{tabular}{l} Stock-based \\ compensation expense \end{tabular} & - & - & - & - & - & - & 49,618 & - & - & 49,618 \\ \hline Comprehensive loss & & & & & & & - & 92,139 & (11,778) & 80,361 \\ \hline \begin{tabular}{l} Balance as of \\ December 31,2019 \end{tabular} & 188,290 & $62 & 34,450 & $11 & 229,028 & $76 & $973,717 & $1,226,986 & $(50,765) & $2,150,087 \\ \hline \begin{tabular}{l} Exercise of stock \\ options \end{tabular} & 148 & - & - & - & 136 & - & 517 & - & - & 517 \\ \hline \begin{tabular}{l} Shares withheld in \\ consideration of \\ employee tax \\ obligations relative to \\ stock-based \\ compensation \\ arrangements \end{tabular} & (1) & - & - & - & (262) & - & - & (3,954) & - & (3,954) \\ \hline \begin{tabular}{l} Issuance of Class C \\ Common Stock, net of \\ forfeitures \end{tabular} & - & - & - & - & 3,052 & 1 & 4,225 & - & - & 4,226 \\ \hline \begin{tabular}{l} Stock-based \\ compensation expense \end{tabular} & - & - & - & - & - & - & 42,070 & - & - & 42,070 \\ \hline \begin{tabular}{l} Equity Component \\ value of convertible \\ notes issuance, net \end{tabular} & - & - & - & - & - & - & 40,644 & - & - & 40,644 \\ \hline \begin{tabular}{l} Comprehensive income \\ (loss) \end{tabular} & & & = & - & & - & - & (549,177) & (8,420) & (557,597) \\ \hline \end{tabular} The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of Under Armour, In are presented in Appendix C. Click here to view Appendix B. Click here to view Appendix C. (a) Based on the information contained in these financial statements, determine the following values for each company. (Round percentage answers to 1 decimal place, e.g. 52.7\% and other answers to 0 decimal place, e.g. 5,275. Enter negative answers using either a negative sign preceding the number e.g. 45% or parentheses e.g. (45)\%.) 1. Profit margin for 2020. 2. Gross profit for 2020 . 3. Gross profit rate for 2020 . 4. Operating income for 2020 . 5. Percentage change in Income from operations from 2019 to 2020