- Calculate the gross profit margin. Be sure to show the calculation for Gross Profit if it is not shown on the statement.
- Did the balance in the Merchandise Inventory account increase or decrease and by what percentage?
- How are inventories stated/valued/accounted for? (hint: you will need to review the notes to the financial statements)
- Calculate average inventory.
- Calculate the Inventory Turnover Ratio.
- Calculate the number of days' sales in Inventory.
- Calculate the profit margin.
- Calculate the quality of earnings ratio.
tenis Albertsons Companies, Inc. and Subsidiaries Consolidated Statements of Operations and Comprehensive Income (in millions, except per share data) Net sales and other revenue Cost of sales Gross profit 52 weeks ended 53 weeks ended 52 weeks ended February 27, 2021 February 29, 2020 February 23, 2019 $ 69,690.4 $ 62,455.1 S 60,534.5 49,275.9 44,860.9 43,639.9 20,414.5 17,594.2 16,894.6 18,835.8 16,641.9 16,272.3 Selling and administrative expenses Gain on property dispositions and impairment losses, net Operating income (38.8) 1,617.5 (484.8) 1,437.1 (165.0) 787.3 Interest expense, net Loss on debt extinguishment Other (income) expense, net Income before income taxes 538.2 85.3 (134.7) 1,128.7 698.0 111.4 28.5 599.2 830.8 8.7 (104.4) 52.2 132.8 Income tax expense (benefit) Net income 278.5 850.2 (78.9) 131.1 $ $ 466.4 S Other comprehensive income (loss), net of tax: Loss on interest rate swaps Recognition of pension gain (loss) Other Other comprehensive income (loss) 183.0 (1.0) 182.0 (3.4) (210.5) 4.1 (209.8) $ (15.5) (83.1) (1.2) (99.8) $ Comprehensive income $ 1,032.2 $ 256.6 $ 31.3 0.23 $ $ 1.53 $ 1.47 $ 0.80 S 0.80 $ 0.23 Net income per Class A common share: Basic net income per Class A common share Diluted net income per Class A common share Weighted average Class A common shares outstanding: Basic Diluted 500.3 578.1 579.4 580.3 580.5 580.7 Table of Contents Albertsons Companies, Inc. and Subsidiaries Consolidated Statements of Cash Flows (in millions) 52 weeks ended 53 weeks ended 52 weeks ended February 27, 2021 February 29, 2020 February 23, 2019 Cash flows from operating activities: Net income $ 850.2 466.4 S 131.1 Adjustments to reconcile net income to net cash provided by operating activities: Gain on property dispositions and impairment losses, net (38.8) (484.8) (165.0) Depreciation and amortization 1,536.9 1,691.3 1,738.8 Operating lease right-of-use assets amortization 581.5 570.3 LIFO expense 58.7 18.4 8.0 Deferred income tax (112.3) (5.9) (81.5) Pension and post-retirement benefits (income) expense (36.4) (2.0) 24.5 Contributions to pension and post-retirement benefit plans (60.0) (11.0) (199.3) Loss (gain) on interest rate swaps and commodity hedges, net 16.9 50.6 (1.3) Deferred financing costs 20.9 39.8 42.7 Loss on debt extinguishment 85.3 111.4 8.7 Equity-based compensation expense 59.0 32.8 47.7 Other operating activities (143.0) 2.5 (42.7) Changes in operating assets and liabilities, net of effects of acquisition of businesses: Receivables, net 0.4 60.8 28.8 Inventories, net 9.2 (38.1) 80.3 Accounts payable, accrued salaries and wages and other accrued liabilities 787.4 85.3 98.4 Operating lease liabilities (563.3) (584.4) Pension withdrawal liabilities 672.3 (62.3) (18.2) Self-insurance assets and liabilities 6.5 (4.0) (48.7) Other operating assets and liabilities 171.1 (33.2) 35.6 Net cash provided by operating activities 3,902.5 1,903.9 1,687.9 (97.9) Cash flows from investing activities: Business acquisitions, net of cash acquired Payments for property, equipment and intangibles, including lease buyouts Proceeds from sale of assets Other investing activities Net cash used in investing activities (1,630.2) 161.6 (5.5) (1,572.0) (1,475.1) 1,096.7 (0.1) (378.5) (1,362.6) 1,252.0 23.8 (86.8) 69 Albertsons Companies, Inc. and Subsidiaries Consolidated Statements of Cash Flows (in millions) 52 weeks ended 53 weeks ended 52 weeks ended February 27, 2021 February 29, 2020 February 23, 2019 4,094.0 S (4,446.7) (79.9) 3,874.0 $ (5,676.6) (109.3) 1,969.8 (3,082.3) (97.5) (3.1) (27.0) (53.2) Cash flows from financing activities: Proceeds from issuance of long-term debt Payments on long-term borrowings Payments of obligations under finance leases Payment of redemption premium on debt extinguishment Payments for debt financing costs Dividends paid on common stock Dividends paid on convertible preferred stock Proceeds from convertible preferred stock Third party issuance costs on convertible preferred stock Treasury stock purchase, at cost Employee tax withholding on vesting of restricted stock and phantom units Other financing activities Net cash used in financing activities (71.6) (21.9) (93.7) (66.0) 1,680.0 (80.9) (1.881.2) (25.8) (14.1) (59.8) (18.8) (30.3) (2,014.2) (15.3) (33.0) (1,314.2) (1,041.8) 1,288.7 (488.8) 286.9 Net increase (decrease) in cash and cash equivalents and restricted cash Cash and cash equivalents and restricted cash at beginning of period Cash and cash equivalents and restricted cash at end of period 478.9 967.7 680.8 1,767.6 $ 478.9 $ 967.7 $ Reconciliation of capital investments: Payments for property and equipment, including payments for lease buyouts Lease buyouts Total payments for capital investments, excluding lease buyouts (1,630.2) $ (13.0) (1,475.1) $ 7.7 (1,362.6) 18.9 $ (1,643.2) $ (1,467.4) $ (1,343.7) 38.8 $ S 6.0 Supplemental cash flow information: Non-cash investing and financing activities were as follows: Additions of finance lease obligations, excluding business acquisitions $ Purchases of property and equipment included in accounts payable Interest and income taxes paid: Interest paid, net of amount capitalized Income taxes paid 360.8 230.8 243.1 574.3 366.2 718.5 228.8 805.9 18.2 The accompanying notes are an integral part of these Consolidated Financial Statements. 70 Albertsons Companies, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity (in millions, except share data) Treasury Stock Shares Amount Accumulated other Total comprehensive Retained stockholders' income (loss) earnings equity $ 191.1 S (569) $ 1,398.2 47.7 (15.3) 3,671,621 (25.8) (25.8) 13.1 131.1 131.1 (99.8) (99.8) 1.5 6.1 3,671,621 (25.8) 91.3 (431.8) 1,450.7 - 32.8 - (18.8) Class A Common Stock Additional paid in Shares Amount capital Balance as of February 24, 2018 579,443,146 S 5.8 S 1,770.3 Equity-based compensation 47.7 Employee tax withholding on vesting of phantom units (15.3) Repurchase of common stock Reorganization transactions 13.1 Net income Other comprehensive loss, nct of tax Other activity (4.6) Balance as of February 23, 2019 579,443,146 5.8 1,811.2 Issuance of commun stock to Company's parents 3,554,105 Equity-based compensation 32.8 Employee tax withholding on vesting of phantom units (18.8) Adoption of new accounting standards, net of tax Net income Other comprehensive loss, net of tax Other activity (0.9) Balance as of February 29, 2020 582,997.251 5.8 1.824.3 Issuance of common stock to Company's parents 1,312,859 Equity-based compensation 59.0 Shares issued and employee tax withholding on vesting of phantom units and restricted stock 1,264,556 0.1 (14.1) Equity reclassification 30.0 Repurchase of common stock Dividends declared on common stock Dividends accrued on convertible preferred stock Net income Other comprehensive income, net of tax Other activity (0.3) 16.6 558.0 466.4 574,6 466.4 1 1 1 11 (226,4) (226.4) (0.3) (1.2) 3,671,621 (25.8) (118,5) 592.3 2,278.1 - 59.0 - - - (14.0) 30.0 116,338,026 (1.881.2) (1.881.2) (93.7) (93.7) 1 - - 1 (86.0) ( 850.2 (86,0) 850,2 1 1 1 182.0 | | 182.0 (0.1) 0.2 tenis Albertsons Companies, Inc. and Subsidiaries Consolidated Statements of Operations and Comprehensive Income (in millions, except per share data) Net sales and other revenue Cost of sales Gross profit 52 weeks ended 53 weeks ended 52 weeks ended February 27, 2021 February 29, 2020 February 23, 2019 $ 69,690.4 $ 62,455.1 S 60,534.5 49,275.9 44,860.9 43,639.9 20,414.5 17,594.2 16,894.6 18,835.8 16,641.9 16,272.3 Selling and administrative expenses Gain on property dispositions and impairment losses, net Operating income (38.8) 1,617.5 (484.8) 1,437.1 (165.0) 787.3 Interest expense, net Loss on debt extinguishment Other (income) expense, net Income before income taxes 538.2 85.3 (134.7) 1,128.7 698.0 111.4 28.5 599.2 830.8 8.7 (104.4) 52.2 132.8 Income tax expense (benefit) Net income 278.5 850.2 (78.9) 131.1 $ $ 466.4 S Other comprehensive income (loss), net of tax: Loss on interest rate swaps Recognition of pension gain (loss) Other Other comprehensive income (loss) 183.0 (1.0) 182.0 (3.4) (210.5) 4.1 (209.8) $ (15.5) (83.1) (1.2) (99.8) $ Comprehensive income $ 1,032.2 $ 256.6 $ 31.3 0.23 $ $ 1.53 $ 1.47 $ 0.80 S 0.80 $ 0.23 Net income per Class A common share: Basic net income per Class A common share Diluted net income per Class A common share Weighted average Class A common shares outstanding: Basic Diluted 500.3 578.1 579.4 580.3 580.5 580.7 Table of Contents Albertsons Companies, Inc. and Subsidiaries Consolidated Statements of Cash Flows (in millions) 52 weeks ended 53 weeks ended 52 weeks ended February 27, 2021 February 29, 2020 February 23, 2019 Cash flows from operating activities: Net income $ 850.2 466.4 S 131.1 Adjustments to reconcile net income to net cash provided by operating activities: Gain on property dispositions and impairment losses, net (38.8) (484.8) (165.0) Depreciation and amortization 1,536.9 1,691.3 1,738.8 Operating lease right-of-use assets amortization 581.5 570.3 LIFO expense 58.7 18.4 8.0 Deferred income tax (112.3) (5.9) (81.5) Pension and post-retirement benefits (income) expense (36.4) (2.0) 24.5 Contributions to pension and post-retirement benefit plans (60.0) (11.0) (199.3) Loss (gain) on interest rate swaps and commodity hedges, net 16.9 50.6 (1.3) Deferred financing costs 20.9 39.8 42.7 Loss on debt extinguishment 85.3 111.4 8.7 Equity-based compensation expense 59.0 32.8 47.7 Other operating activities (143.0) 2.5 (42.7) Changes in operating assets and liabilities, net of effects of acquisition of businesses: Receivables, net 0.4 60.8 28.8 Inventories, net 9.2 (38.1) 80.3 Accounts payable, accrued salaries and wages and other accrued liabilities 787.4 85.3 98.4 Operating lease liabilities (563.3) (584.4) Pension withdrawal liabilities 672.3 (62.3) (18.2) Self-insurance assets and liabilities 6.5 (4.0) (48.7) Other operating assets and liabilities 171.1 (33.2) 35.6 Net cash provided by operating activities 3,902.5 1,903.9 1,687.9 (97.9) Cash flows from investing activities: Business acquisitions, net of cash acquired Payments for property, equipment and intangibles, including lease buyouts Proceeds from sale of assets Other investing activities Net cash used in investing activities (1,630.2) 161.6 (5.5) (1,572.0) (1,475.1) 1,096.7 (0.1) (378.5) (1,362.6) 1,252.0 23.8 (86.8) 69 Albertsons Companies, Inc. and Subsidiaries Consolidated Statements of Cash Flows (in millions) 52 weeks ended 53 weeks ended 52 weeks ended February 27, 2021 February 29, 2020 February 23, 2019 4,094.0 S (4,446.7) (79.9) 3,874.0 $ (5,676.6) (109.3) 1,969.8 (3,082.3) (97.5) (3.1) (27.0) (53.2) Cash flows from financing activities: Proceeds from issuance of long-term debt Payments on long-term borrowings Payments of obligations under finance leases Payment of redemption premium on debt extinguishment Payments for debt financing costs Dividends paid on common stock Dividends paid on convertible preferred stock Proceeds from convertible preferred stock Third party issuance costs on convertible preferred stock Treasury stock purchase, at cost Employee tax withholding on vesting of restricted stock and phantom units Other financing activities Net cash used in financing activities (71.6) (21.9) (93.7) (66.0) 1,680.0 (80.9) (1.881.2) (25.8) (14.1) (59.8) (18.8) (30.3) (2,014.2) (15.3) (33.0) (1,314.2) (1,041.8) 1,288.7 (488.8) 286.9 Net increase (decrease) in cash and cash equivalents and restricted cash Cash and cash equivalents and restricted cash at beginning of period Cash and cash equivalents and restricted cash at end of period 478.9 967.7 680.8 1,767.6 $ 478.9 $ 967.7 $ Reconciliation of capital investments: Payments for property and equipment, including payments for lease buyouts Lease buyouts Total payments for capital investments, excluding lease buyouts (1,630.2) $ (13.0) (1,475.1) $ 7.7 (1,362.6) 18.9 $ (1,643.2) $ (1,467.4) $ (1,343.7) 38.8 $ S 6.0 Supplemental cash flow information: Non-cash investing and financing activities were as follows: Additions of finance lease obligations, excluding business acquisitions $ Purchases of property and equipment included in accounts payable Interest and income taxes paid: Interest paid, net of amount capitalized Income taxes paid 360.8 230.8 243.1 574.3 366.2 718.5 228.8 805.9 18.2 The accompanying notes are an integral part of these Consolidated Financial Statements. 70 Albertsons Companies, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity (in millions, except share data) Treasury Stock Shares Amount Accumulated other Total comprehensive Retained stockholders' income (loss) earnings equity $ 191.1 S (569) $ 1,398.2 47.7 (15.3) 3,671,621 (25.8) (25.8) 13.1 131.1 131.1 (99.8) (99.8) 1.5 6.1 3,671,621 (25.8) 91.3 (431.8) 1,450.7 - 32.8 - (18.8) Class A Common Stock Additional paid in Shares Amount capital Balance as of February 24, 2018 579,443,146 S 5.8 S 1,770.3 Equity-based compensation 47.7 Employee tax withholding on vesting of phantom units (15.3) Repurchase of common stock Reorganization transactions 13.1 Net income Other comprehensive loss, nct of tax Other activity (4.6) Balance as of February 23, 2019 579,443,146 5.8 1,811.2 Issuance of commun stock to Company's parents 3,554,105 Equity-based compensation 32.8 Employee tax withholding on vesting of phantom units (18.8) Adoption of new accounting standards, net of tax Net income Other comprehensive loss, net of tax Other activity (0.9) Balance as of February 29, 2020 582,997.251 5.8 1.824.3 Issuance of common stock to Company's parents 1,312,859 Equity-based compensation 59.0 Shares issued and employee tax withholding on vesting of phantom units and restricted stock 1,264,556 0.1 (14.1) Equity reclassification 30.0 Repurchase of common stock Dividends declared on common stock Dividends accrued on convertible preferred stock Net income Other comprehensive income, net of tax Other activity (0.3) 16.6 558.0 466.4 574,6 466.4 1 1 1 11 (226,4) (226.4) (0.3) (1.2) 3,671,621 (25.8) (118,5) 592.3 2,278.1 - 59.0 - - - (14.0) 30.0 116,338,026 (1.881.2) (1.881.2) (93.7) (93.7) 1 - - 1 (86.0) ( 850.2 (86,0) 850,2 1 1 1 182.0 | | 182.0 (0.1) 0.2
