Ratio AnalysisUrban Outfitters

Read the overview below and complete the activities that follow.

Assessing how well a companys strategy is presently working involves evaluating the strategy from a qualitative standpoint and a quantitative standpoint. The stronger a companys current overall performance, the less likely the need for radical strategy changes. The weaker a companys performance, the more its current strategy must be questioned.

The goal of this exercise is for you to understand how well a companys strategy is working based on its financial results.

see pictures attached

Calculate the following ratios for Urban Outfitters for both 2018 and 2019. Be sure to report items (a) through (e) in percentages (i.e., multiply your result 100). a. Gross profit margin

b. Operating profit margin

c. Net profit margin

d. Return on stockholders equity

Consolidated Income Statements for Urban Outfitters, Inc., 2018-2019 (in thousands, except per share data) 2018 2019 $3,616,014 $3,950,623 2,440,507 2,603,911 Net sales (total revenue) Cost of sales Selling, general, and administrative Operating income 915,615 965,399 $259,892 $381,313 (4.840) 6,314 261,366 (6,325) 10,565 385,553 Other income (expense). Other expenses Interest income and other, net Income before income taxes Provision for income taxes Net income Basic earnings per share Diluted earnings per share 153,103 87,550 $ 108,263 $298,003 $ 0.97 $ 2.75 $ 0.96 $ 2.72 Source: Urban Outfitters, Inc., 2019. Consolidated Balance Sheets for Urban Outfitters, Inc., 2018-2019 (in thousands, except per share data) January 31, January 31, 2018 2019 $ 282,220 $ 358,260 165,125 279,232 76,962 80,461 351,395 370,507 103,055 114.296 978,757 1,202,756 813,768 796,029 160,255 161.730 $1.952,780 $2,160,515 Assets Current Assets Cash and cash equivalents Short-term investments Receivables, net Merchandise inventories Prepaid expenses and other current assets Total current assets.. Net property and equipment Deferred income taxes and other assets Total assets.... Liabilities and Shareholders' Equity Current Liabilities Accounts payable Accrued salaries and benefits ..... Accrued expenses and other current liabilities.. Total current liabilities .... Long-term debt Deferred rent and other liabilities Total liabilities Commitments and Contingencies Equity Preferred stock $.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding Common stock $.0001 par value: 200,000,000 shares authorized: 105,642,283 and 108,248,568 shares issued and outstanding Additional paid-in capital Retained earnings Total stockholders' equity Total Liabilities and Equity $ 128,246 $144,414 36,058 54.799 195.910 187,431 360,214 $ 386,644 o 284,773 291,663 671.417 651,877 O 11 11 684 1,489,087 1.300.208 1,489,098 1,300,90 $2,160,515 $1,952,780 Source: Urban Outfitters, Inc, 2019 10-K