HA EAR Y REPORTING AND ANALYSIS EYK13-1. Financial Reporting Problem: Columbia Sportswear Company The financial statements for the Columbia Sportswear Company can be found in Appendix A at the end of this book. You are considering an investment in Columbia Sportswear after a recent outdoor trip in which you really liked some of the clothes you purchased from the company. You decide to do an analysis of the company's financial statements in order to help you make an informed decision. Required a. Using the five-year selected financial data reported in the annual report, produce a five-year trend analysis, using 2013 as a base year, of (1) net sales, (2) net income, and (3) total assets. Comment on your findings. Calculate the (1) gross profit percentage, (2) return on sales, and (3) return on assets for 2016 and 2017. Comment on Columbia Sportswear's profitability. (2015 total assets $1.846,153,000) Calculate the (1) current ratio, (2) quick ratio, and (3) operating-cash-flow-to-current liabili- ties ratio for 2016 and 2017. (2015 current liabilities = $355,070,000) Comment on Columbia Sportswear's liquidity. d. Calculate the debt-to-equity ratio for 2016 and 2017. Comment on Columbia Sportswear's solvency. b. c. Appendix A Columbia Sportswear Company A-3 FINANCIAL STATEMENTS COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED BALANCE SHEETS (la thousands) December 31, 2017 2016 5 673.1665 94.983 364,862 457.927 58.559 1.649.497 281,394 129.555 68.594 36,04 27.058 2,212,902 $ 551,389 472 333.678 17,997 38,487 1412.023 279,650 133.438 68,394 92,494 27,695 2,013,894 $ ASSETS Current Asset Cash and cash equivalents (Note 20) Short-term investments (Note 20) Accounts receivable, net (Note 5) Inventories Prepaid expenses and other current assets Total current asset Property, plant, and equipment, net (Note 6) Intangible assets, net (Note 7) Goodwill (Note 7) Deferred income taxes (Note 10) Other non-current assets Total assets LIABILITIES AND EQUITY Current Liabilities: Accounts payable Accrued liabilities (Note 9) Income taxes payable (Note 10) Total current liabilities Note payable to related party (Note 21) Other long-term liabilities (Notes 11, 12) Income taxes payable (Note 10) Deferred income taxes (Note 10) Total liabilities Commitments and contingencies (Note 13) Shareholders' Equity: Preferred stock: 10,000 shares authorized: none issued and outstanding Common stock (no par value); 125,000 shares authorized: 69,995 and 69,873 issued and outstanding (Note 14) Retained earnings Accumulated other comprehensive loss (Note 17) Total Columbia Sportswear Company shareholders' equity Non-controlling interest (Note 4) Total equity Total liabilities and equity 252.301 182.228 19.107 453,636 215,048 142.158 5,645 362,851 14.053 42.622 12,710 147 432,383 48,735 58,104 168 560,643 45,829 1,585,009 (8,887) 1.621.951 30,308 1,652, 259 2,212,902 53,801 1.529,636 (22,617) 1,560,820 20,691 1.581.SI 2,013,894 $ $ See accompanying notes to consolidated financial statements A-4 Appendix A Columbia Sportswear Company COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) 2015 $ Net sales Cost of sales Gross profit Selling general and administrative expenses et licensing income ncome from operations terest income, net mterest expense on note payable to related party (Note 21) Other non-operating expense come before income tax ncome tax expense (Note 10) ct income et income attributable to non-controlling interest at income attributable to Columbia Sportswear Company arnings per share attributable to Columbia Sportswear Company (Note 16): Basic Diluted eighted average shares outstanding (Note 16): Basic Diluted Year Ended December 31, 2017 2016 2,466,105 $ 2.377,045 S 1,306,143 1.266,697 1,159,962 1,110,348 910,894 864,084 13,901 10.244 262,969 256,508 4,515 2,003 (429) (1.041) (321) (572) 266,734 256,898 (154419) (58.459) 112.315 198,439 7,192 6,541 105,123 s 191,898 5 2,326,180 1,252,680 1,073,500 831,971 8,192 249,721 1,531 (1,099) (2,834 247,319 (67.468) 179,851 5.514 174,337 $ s 1.51 1.49 2.75 2.72 2.48 2.45 70,162 69,759 70,453 69,683 70.632 71.064 See accompanying notes to consolidated financial statements Appendix A Columbia Sport Company A-5 COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS is the wwwwww US 5 19.09 $ 4105 (1917) 10.96 3.09 On 112 04.197 46.662 119.341 931 36.710 08.7771 5453 15.948 1929 44 087 11 01) 11.581 52.702 5.79 341.128 2461 4956 275.163 (110,993) 36,280 (53.3521 279 1.23 21.263 Contos from operating activities Netice Adjustments to reconcile net income to cash provided by operating activities Depreciation and Los on disposal or impairment of property, plant, and equipment Deferred Stock-based compensation Ethernet from employeeskus Changes in operating iets and liabilities Accounts receivable Teventories Prepaid expenses and other current Other assets Acos payable Accrued abilities contres payable Other liabilities Netcash provided by operating Cash flows from investing activities: Purchases of sborem investments Sales of short-term investments Capital inpenditus Proceeds from sale of property, plant, and quiet Net cash used in investing activities Cash flows from financing activities: Proceeds from credit facilities Repayments on credit facilities Proceeds from nuance of common stock under comply stock plans Tax payments related to restricted stock unite Excess tax benefit from employee stock plum Repurchase of common stock Cash dividends paid Payment of related party note payable Net cush used in financing activities Net effect of exchange rate changes on cash Net increase (decrease in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of your Supplemental disclosure of cash flow information: Cash paid during the year for income taxes Cash paid during the year for interest on note payable to related party Supplemental disclosures of non-cash investing activities Capital expenditures incurred but not yet paid 64,50 144 92 49.90 3.000 3.374 (3,374) 19.946 (3.002) 164,105) 13.167 15,117) 4 51.479) 17:40 (895) 0,065) 35.542) (50,909) (14.236) 34.403 12.836 121,777 351,389 673.166 191.345) (4,567) (1635) TH1.619 369,770 551.3595 413.558 359,770 $ $1.045 683 70.4245 1.049 57.350 1,115 3,188 2.710 4,698