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Please solve this question Analyzing a Company for Its Investment Potential In its annual report, WRS Athletic Supply, Inc., includes the following five-year financial summary.
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Analyzing a Company for Its Investment Potential In its annual report, WRS Athletic Supply, Inc., includes the following five-year financial summary. WRS ATHLETIC SUPPLY, INC. Five-Year Financial Summary (Partial; adapted) 2010 2015 5244,524 12% 2013 2012 $191,329 5165,013 16% 2011 $137,634 17% 2014 $217,799 14% 6% 1,873 171,562 16% 5% 20% 8% 2,001 191,838 1,787 150,255 1,615 129,664 1,391 108,725 41,236 36,356 31,679 27,408 22,516 1,063 (138) 4,487 8,039 1357 (171) 3,897 6,671 1,383 (188) 3,692 6,295 1,045803 (204) (189) 3,338 5,377 2,740 (Dollar amounts in thousands except per share data) Net sales Net sales increase Domestic comparative store sales increase Other income-net Cost of sales Operating, selling, and general and administrative expenses Interest: Interest expense Interest income Income tax expense Net income Per share of common stock: Net income Dividends Financial Position Current assets, excluding inventory Inventories at LIFO cost Property, plant, and equipment, net Total assets Current liabilities Long-term debe Shareholders' equity Financial Ratios Acid-test ratio Rate of return on total assets Rate of return on shareholders' equity 1.41 1.81 0.300 1.21 0.20 0.99 0.16 .28 $16,497 $ 30,483 24,891 1 51,904 94,685 32,617 22,731 39,337 $ 27,878 22,614 45,750 83,527 27,282 21,143 35,102 S 26,555 $ 24,356 21.442 19,793 40,934 35,969 78,130 70.349 28,949 25,803 17,838 18,712 31,343 25,834 $ 21,132 17,076 25,973 49,996 16,762 12,122 21.112 0.9 13 0.9 10.2% 21.6% 1.0 9.9% 20.1% 0.9 10.3% 22.0% 10.7% 22.9% 22.4% Requirement 1. Analyze the company's financial summary for the fiscal years 2011-2015 to decide whether to invest in the common stock of WRS. Include the following sections in your analysis, and fully explain your final decision. a. Trend analysis for net sales and net income (use 2011 as the base year). b. Profitability analysis. c. Evaluate the ability to sell inventory (WRS uses the LIFO method). d. Evaluate the ability to pay debts. e. Evaluate the dividends. Requirement 4 2013 2012 2011 2015 2014 Total Assets Total Equity Total Liabilities Debt Ratio Debt to Equity Ratio Net Income Income Tax Expense Interest Expense Total Times-interest- earned ratio Current Ratio Quick Ratio Comments: Debt hatio is campany's mane interest cover
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