E connect 1. Using the financial ratios provided in the Appendix and the following financial statement information for Macy's, Inc., calculate the following ratios for Macy's for both 2015 and 2016. L04-19 1 Giss nrofit margin 5. Return on shareholders' equity 6. Return on assets 7. Long-term debt-to-equity ratio 8. Days of inventory 9. Inventory turnover ratio 10. Average collection period Consolidated Statements of Income for Macy's, Inc.. 2015-2016 (in millions, except per share amounts) 2016 2015 Net sales $25.778 $ 27.079 Cost of sales (15,621) (16,496) Gross margin 10,157 10.583 Selling, general and administrative expenses (8,265) (8,256) Impairments, store closing and other costs (479) (288) Settlement charges (98) Operating income 1.315 2,039 Interest expense (367) (363) Premium on early retirement of debt Interest income 4 2 Income before income taxes 952 1.678 Federal, state, and local income tax expense (341) (608) Net income 611 1.070 Net loss attributable to noncontrolling interest 8 Net income 611 1,070 8 2 619 1,072 Net loss attributable to noncontrolling interest Net income attributable to Macy's, Inc., shareholders Basic earnings per share attributable to Macy's, Inc., shareholders Diluted earnings per share attributable to Macy's, Inc., shareholders $ 2.01 S 3.26 $ 1.99 $ 3.22 Consolidated Balance Sheets for Macy's, Inc., 20152016 (in millions ASSETS 2016 2015 Current Assets: Cash and cash equivalents $ 1.297 $ 1,109 Receivables 522 558 Merchandise inventories 5,399 5,506 Prepaid expenses and other current assets 408 479 Total Current Assets 7,626 7,652 Property and Equipment - net 7,017 7,616 Goodwill 3,897 3.897 Goodwill 3,897 3.897 Other Intangible Assets-net 498 514 Other Assets 813 897 Total Assets $ 19,851 $ 20,576 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilties: $309 $642 Short-term debt Merchandise accounts payable Accounts payable and accrued liabilities 1,423 1.526 3.563 3.333 Income taxes 352 227 5,647 5,728 Total Current Liabilities Long-Term Debt 6,562 6,995 Deferred Income Taxes 1.443 1,477 Other Liabilities 1.877 2.123 Shareholders' Equity Common stock (304.1 and 310.3 shares outstanding) 3 3 Additional paid-in capital 617 621 Long-Term Debt 6,562 6,995 Deferred Income Taxes 1.443 1,477 Other Liabilities 1,877 2,123 Shareholders' Equity: Common stock (304.1 and 310.3 shares outstanding) 3 Additional paid-in capital 617 621 Accumulated equity 6.088 6,334 Treasury stock (1.489) (1.665) Accumulated other comprehensive loss (896) (1.043) 4.323 4.250 Total Macy's, Inc., Shareholders' Equity Noncontrolling interest (1) 3 Total Shareholders' Equity 4,322 4,253 Total Liabilities and Shareholders' Equity $ 19,851 $ 20,576 Source: Macy's, Inc. 2016 10-K
