ASSURANCE OF LEARNING EXERCISES 1. Using the financial ratios provided in Table 4.1 and following the financial statement Connect information presented for Urban Outfitters, Inc., calculate the following ratios for Urban Outfitters for both 2016 and 2017: a. Gross profit margin b. Operating profit margin c. Net profit margin d. Times-interest-earned (or coverage) ratio e. Return on stockholders' equity f. Return on assets g. Debt-to-equity ratio h. Days of inventory i. Inventory turnover ratio j. Average collection period Based on these ratios, did Urban Outfitter's financial performance improve, weaken, or remain about the same from 2016 to 2017? Consolidated Income Statements for Urban Outfitters, Inc., 2016-2017 (in thousands, except per share data) LO 4-1 Net sales (total revenue) Cost of sales. Selling, general, and administrative 2016 2017 $3,545,794 $3,445,134 2,301,181 2,243,232 906,086 848,323 (continued) Operating income 2016 2017 338,527 353,579 Other income (expense). Other expenses (4,587) (5,449) Interest income and other, net 4159 1901 Income before income taxes 338,099 350,031 Provision for income taxes.. 119,979 125,542 Net income. Basic earnings per share Diluted earnings per share Source: Urban Outfitters, Inc., 2017. $218,120 $224,489 $ 1.87 $ 1.79 $ 1.86 $ 1.78 Consolidated Balance Sheets for Urban Outfitters, Inc., 2016-2017 (in thousands, except per share data) Assets Current Assets Cash and cash equivalents Short-term investments Receivables, net Merchandise Inventories January 31, 2017 January 31, 2016 $ 248,140 111,067 $ 248,140 61,061 54,505 75,723 338,590 330,223 Consolidated Balance Sheets for Urban Outfitters, Inc., 2016-2017 (in thousands, except per share data) January 31, 2017 January 31, 2016 Assets Current Assets Cash and cash equivalents Short-term investments $ 248,140 $ 248,140 111,067 61,061 Receivables, net 54,505 75,723 Merchandise inventories 338,590 330,223 Prepaid expenses and other current assets. 129,095 102,078 Total current assets 881,397 834,361 Net property and equipment. 867,786 863,137 Deferred income taxes and Other assets 153,454 135,803 Total assets. $1,902,637 $1,833,301 Liabilities and Shareholders' Equity Current Liabilities Accounts payable Accrued salaries and benefits. Accrued expenses and Other current liabilities Total current liabilities $ 11537 $ 118,035 58,782 41,474 174,609 169,722 352,928 329,231 (continued) Long-term debt Deferred rent and other liabilities. Total liabilities.. Commitments and Contingencies Lapabilities, and Competitiveness January 31, 2017 January 31, 2016 150,000 236.625 216,843 589,553 696,074 Equity Preferred stock $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding 0 Common stock $0.001 par value; 200,000,000 shares authorized; 116,233,781 and 117,321,120 shares issued 12 12 and outstanding Additional paid-in capital Retained earnings. Total stockholders' equity Total Liabilities and Equity $ 0 1,347,141 1,160,666 1,313,084 1,137,227 $1,902,637 $1,833,301 Source: Urban Outfitters Inc 2017 10K