PC-29A Completing a comprehensive financial statement analysis In its annual report, ABC Athletic Supply, Inc. includes the following five year financial summary ABC ATHLETIC SUPPLY, INC. Five Year Financial Summary (Partial; adapted) (Dollar amounts in thousands except per share 2018 2017 2016 2015 2014 2013 data) Net Sales Revenue $250,000 $216,000 $191,000 $161,000 $134,000 Net Sales Revenue Increase 16% 13% 19% 20% 17% Domestic Comparative Store Sales Increase 5% 6% 4% 796 9% Other Income-Net 2.110 1.8401,760 1,690 1,330 Cost of Goods Sold 189,250 164,592 148,216 126,385 106,396 Selling and Administrative Expenses 41,210 36,330 31,620 27,440 22,540 Interest Interest Expense -1,080 -1,380 -1,400 -1,020 -830 Interest Income 125 165 155 235 190 Income Tax Expense 4.470 3,900 3.700 3,320 2,700 Net Income 16,225 11,803 7979 4,760 3,054 Per Share of Common Stock: Net Income 1.6 13 12 0.78 Dividends 0.4 0.38 0.34 0.26 Financial Position Current Assets, Excluding Merchandise Inventory $30,700 $27,200 $26,700 $24.400 $21,500 Merchandise Inventory 24,500 22.600 21,700 19.000 17,500 $16,700 Property. Plant, and Equipment, Net 51,400 45,200 40,000 35,100 25,600 Total Assets 106,600 95.000 88,400 78,500 64,600 Current Liabilities 32.300 28.000 28,300 25,000 16.500 Long-term Debt 23.000 21,500 17,600 19.100 12.000 Stockholders' Equity 51,300 45,500 42,500 34,400 36,100 Financial Ratios Acid-Test Ratio 0.9 Rate of Return on Total Assets 17.20% 14.40% 11.20% 8.10% 7.10% Rate of Return on Common Stockholders' Equity 33.50% 26.80% 20,80 13.50 13.00 13 Requirements Analyze the company's financial summary for the fiscal years 2014-2018 to decide whether to invest in the common stock of ABC EC-13 EC-24 EC-15 EC-18 PC-28A PC 29A Home Inset Vie QuickBooks Cut Copy - Paste Format Painter Clipboard Page Layout Formules Data Times New Roma 12A U..O.A. Review = sz help Pout Pos Wrap Test Merge Center - Tail me what you want to do 1 D Normal . Conditional Formatas Check Cell Cone . S. . Formatting Table Alignment M52 G 51,300 C 45,500 D 42,500 E 34,400 F 36,100 28 Stockholders' Equity 29 Financial Ratios 30 Acid-Test Ratio 31 Rate of Return on Total Assets 32 Rate of Return on Common Stockholders' Equity 17.20% 33 50% 14.40% 26 80% 11 20% 20 80% 113 8.10% 710% 13.50% 1300% Requirements Analyze the company's facial m ay for the fiscal years 2014-2018 to decide whether to invest in the common stock of ABC Include the following sections in your waysis Trend analysis for net sales revenue and net income (use 2014 as the base year) Profitability analysis Evaluation of the ability to se merchandise inventory Evaluation of the ability to pay debts Evaluation of dividends. Should you invest in the common stock of ABC Athletic Supply, Inc.? Fully explain your final decision 45 Requirement 2018 2017 2016 2015 2014 As Net Sales Revenue 19 Trend Percentages so Net Income 51 Trend Percentages 3 Analysis 56 Requirement 2 57 Profit margin ratio: Net income Net sales revenge sa 59 Net income 60 Net sales 2018 2017 2016 2015 2014 62 Profit margin ratio EC-13 EC-14 EC-15 EC-18 PC A PC 29A Ready BCDEFGHI 61 62 Profit margin ratio 65 Rate of return on total assets: (Net income + Interest expense) / Average total assets 2018 2017 67 Given in data 2016 2015 2014 69 70 Asset turnover ratio: Net sales revenue / Average total assets 11 2018 2017 2016 2015 72 Net sales revenue 73 74 Total assets, beginning 75 Total assets, ending 76 Average total assets 77 2018 2017 2016 2015 79 Asset turnover ratio 81 Rate of return on common stockholders' equity: (Net income-Preferred dividends) / Average common stockholders' equity 82 2018 2017 2016 2015 2014 83 Given in data 84 85 86 Earnings per share: (Net income-Preferred dividends) /Weighted average number of common shares outstanding 87 2018 2017 2016 2015 2014 88 Given in data 89 90 Analysis: 92 93 Requirement 3 94 Gross profit percentage: Gross profit/Net sales revenue 95 06 Net calee.com EC-13 FC-12 EC-14 EC-15 EC-18 PC-28A Ready 2018 2017 2016 2015 2014 PC 29A - Insert Page Layout Formulas Data Review View Help Font POF QuickBooks Tell me what you want to do File - Home Cut == FF Copy Times New Roma - 12 -A BIU. DA- Wrap Test Merge & Center - Paste - * Format Painter Clipboard Conditional Formatas Formatting Table Font Alignment M52 . : x x E F G H 93 Requirement 3 94 Gross profit percentage: Gross profit/Net sales reveme 95 2018 2017 2016 2015 2014 96 Net sales revenue 97 Cost of goods sold 98 Gross profit 99 Gross profit % 100 101 Inventory Turnover: Cost of goods sold / Average merchandise inventory 102 Days' sales in inventory: 365 days / Inventory turnover 103 2018 2017 2016 2015 2014 104 Beginning inventory 105 Ending inventory 106 Average inventory 107 108 109 Inventory turnover 110 Days' sales in inventory 111 112 Analysis 113 114 Requirement 4 115 Acid-test ratio: (Cash + Cash equivalents + Short-term investments + Net current receivables)/Current Kabilities 116 2018 2017 2016 2015 2014 117 Given in data 118 2018 2017 2016 2015 2014 119 120 Current ratio: Current assets / Current liabilities 121 122 Current assets 123 Current liabilities 124 125 Current ratio 126 EC-13 EC-14 EC-15 EC-18 PC-28A PC-29A Ready M52 x BICI DELF G H 124 125 Current ratio 126 2018 2017 2016 2015 2014 128 Debt ratio: Total liabilities / Total assets 129 130 Total liabilities 131 Total assets 132 133 Debt ratio 134 135 136 Debt to equity ratio: Total liabilities/Total equity 137 138 Total liabilities 139 Total equity 2018 2017 2016 2015 2014 140 141 Debt to equity ratio 142 2014 144 Times interest earned ratio: (Net income + income tax expense + Interest expense) / Interest expense 145 146 2018 2017 2016 2015 147 Net income 148 Income tax expense 149 Interest expense 150 Total 152 Times-interest-earned ratio 153 154 155 Analysis: 156 157 Requirement 5 158 159 Dividend payout: Annual dividend per share/Earnings per share EC-13 EC-14 EC-15 EC-18 PC-28A PC-29A Ready 2018 2017 2016 2015 2014 145 146 247 Net income 148 Income tax expense 149 Interest expense 150 Total 151 152 Times interest-earned ratio 753 155 Analysis 156 157 Requirement 5 158 159 Dividend payout: Annual dividend per share / Earnings per share 160 2018 2017 2016 2015 2014 161 162 Annual dividend per share (given in data) 163 Earnings per share (given in data) 164 165 Dividend payout 166 167 Analysis: 168 169 Requirement 6 170 Final analysis: 171 Based on the information that was covered, it is best to invest in the company 172