Question
In its annual report, WYZ Athletic Supply, Inc. includes the following five-year financial summary: WIL Athletic Supply, Inc. Five-Year Financial Summary (Partial; adapted) (Dollar amounts
In its annual report, WYZ Athletic Supply, Inc. includes the following five-year financial summary:
WIL Athletic Supply, Inc. | ||||||
Five-Year Financial Summary (Partial; adapted) | ||||||
(Dollar amounts in thousands except per share data) | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 |
Net Sales Revenue | $295,000 | $217,000 | $190,000 | $165,000 | $136,000 | |
Net Sales Revenue Increase | 36% | 14% | 15% | 21% | 17% | |
Domestic Comparative Store Sales Increase | 6% | 6% | 4% | 8% | 10% | |
Other IncomeNet | 2,000 | 1,810 | 1,790 | 1,670 | 1,360 | |
Cost of Goods Sold | 221,545 | 166,005 | 146,870 | 129,030 | 107,440 | |
Selling and Administrative Expenses | 41,230 | 36,370 | 31,680 | 27,408 | 22,510 | |
Interest: | ||||||
Interest Expense | (1,070) | (1,300) | (1,310) | (1,060) | (870) | |
Interest Income | 140 | 140 | 190 | 225 | 170 | |
Income Tax Expense | 4,410 | 3,880 | 3,670 | 3,350 | 2,750 | |
Net Income | 28,885 | 11,395 | 8,450 | 6,047 | 3,960 | |
Per Share of Common Stock: | ||||||
Net Income | 1.80 | 1.50 | 1.40 | 1.20 | 0.98 | |
Dividends | 0.40 | 0.38 | 0.34 | 0.30 | 0.26 | |
Financial Position | ||||||
Current Assets, Excluding Merchandise Inventory | $30,800 | $27,800 | $26,000 | $24,700 | $21,900 | |
Merchandise Inventory | 24,200 | 22,700 | 21,200 | 20,100 | 18,000 | $16,500 |
Property, Plant, and Equipment, Net | 51,000 | 46,200 | 41,100 | 35,600 | 25,400 | |
Total Assets | 106,000 | 96,700 | 88,300 | 80,400 | 65,300 | |
Current Liabilities | 33,000 | 27,300 | 29,000 | 25,400 | 17,000 | |
Long-term Debt | 22,500 | 21,300 | 17,000 | 18,900 | 12,900 | |
Stockholders' Equity | 50,500 | 48,100 | 42,300 | 36,100 | 35,400 | |
Financial Ratios | ||||||
Acid-Test Ratio | 0.9 | 1.0 | 0.9 | 1.0 | 1.3 | |
Rate of Return on Total Assets | 29.6% | 13.7% | 11.6% | 9.8% | 8.8% | |
Rate of Return on Stockholders' Equity | 58.6% | 25.2% | 21.6% | 16.9% | 16.4% |
Requirement 1. Compute the trend analysis for net sales and net income (use
2014
as the base year). (Round to the nearest whole percent.)
2018 | 2017 | 2016 | 2015 | 2014 | ||||||
Net sales | % | % | % | % | % | |||||
Net income | % | % | % | % | % |
Requirement 2. Compute the profitability analysis.
Select the formula reference in the last column of the table and enter the earnings per share for each year. (Round to the nearest cent, X.XX.)
FORMULA: (Net income - Preferred dividends) Weighted average-number of common shares outstanding
2018 | 2017 | 2016 | 2015 | 2014 | ||
Earnings per share |
Compute the profit margin ratio for all five years. (Enter your answers as percentages rounded to the nearest tenth percent, X.X%.)
FORMULA: Net income Net sales
2018 | 2017 | 2016 | 2015 | 2014 | |||||||
Profit margin ratio | % | % | % | % | % |
Enter the rate of return on total assets and the rate of return on common stockholders' equity for each year. (Enter your answers as percentages to the tenth percent, X.X%.)
FORMULAS-
On total assets: (Net income + Interest expense) Average total assets
On common stockholders: (Net income - Preferred dividends) Average common stockholders equity
2018 | 2017 | 2016 | 2015 | 2014 | |||||||
Rate of return on total assets | % | % | % | % | % | ||||||
Rate of return on common stockholders' equity | % | % | % | % | % |
Requirement 3. Evaluate the ability to sell merchandise inventory.
Enter the the gross profit percentage for each year. (Round your answers to the nearest tenth percent, X.X%.)
FORMULA: Gross profit Net sales revenue
2018 | 2017 | 2016 | 2015 | 2014 | |||||||
Gross profit percentage | % | % | % | % | % |
Compute the inventory turnover for each year. (Round the intermediary calculation to the nearest whole dollar and round the final answer to two decimal places, X.XX.)
FORMULA: Cost of goods sold Average merchandise inventory
2018 | 2017 | 2016 | 2015 | 2014 | ||
Inventory turnover |
Compute the days' sales in inventory for each year. (Round intermediary calculations to two decimal places, X.XX, and then round your final answers that you enter into the table below to one decimal place, X.X)
FORMULA: 365 days Inventory turnover
2018 | 2017 | 2016 | 2015 | 2014 | ||
Days' sales in inventory |
Requirement 4. Evaluate the ability to pay debts.
Enter the acid-test ratio for each year. (Round the ratio to one decimal place, X.X.)
FORMULA: (Cash including cash equivalents + Short-term investments + Net current receivables) Total current liabilities
2018 | 2017 | 2016 | 2015 | 2014 | ||
Acid-test ratio |
Compute the current ratio for each year. (Round the ratio to two decimal places, X.XX.)
FORMULA: Total current assets Total current liabilities
2018 | 2017 | 2016 | 2015 | 2014 | ||
Current ratio |
Now compute the debt ratio. (Round your answers to the nearest tenth percent, X.X%.)
FORMULA: Total liabilities Total assets
2018 | 2017 | 2016 | 2015 | 2014 | |||||||
Debt ratio | % | % | % | % | % |
Compute the debt to equity ratio for each year. (Round the ratio to two decimal places, X.XX.)
FORMULA: Total liabilities Total equity
2018 | 2017 | 2016 | 2015 | 2014 | ||
Debt to equity ratio |
Compute the times-interest-earned ratio for each year. (Round the ratio to two decimal places, X.XX.)
FORMULA: (Net income + Income tax expense + Interest expense) Interest expense
2018 | 2017 | 2016 | 2015 | 2014 | ||
Times-interest-earned ratio |
Requirement 5. Evaluate the dividends.
Enter the dividends per share for each year. (Round to the nearest cent, X.XX.)
2018 | 2017 | 2016 | 2015 | 2014 | |
Dividends per share |
Calculate the dividend payout for each year. (Round your answers to the nearest whole percent, X%)
FORMULA: Annual dividend per share Earnings per share
2018 | 2017 | 2016 | 2015 | 2014 | |||||||
Dividend payout | % | % | % | % | % |
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