Requirements X Analyze the company's financial summary for the fiscal years 2014-2018 to decide whether to invest in the common stock of WEX. Include the following sections in your analysis. 1. Trend analysis for net sales revenue and net income (use 2014 as the base year) 2. Profitability analysis. 3. Evaluation of the ability to sell merchandise inventory. 4. Evaluation of the ability to pay debts. 5. Evaluation of dividends. 6. Should you invest in the common stock of WEX Athletic Supply, Inc.? Fully explain your final decision. Print Done Homework: ACC-260 Benchmark - Topic 7 Assignment Save Score: 8.84 of 30 pts 6 of 6 (6 complete) HW Score: 77.64%, 77.64 of 100 pts %x PC-29A (similar to) Question Help In its annual report, WEX Athletic Supply, Inc. includes the following five-year financial summary: (Click the icon to view the financial summary.) Read the requirements 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 199 % 146 % 122 % 100 % 162 % 347 % Net income 645 % 255 % 165 % 100 % Trends in net sales and net income are both upward which is positive Requirement 2. Compute the profitability analysis. Begin by selecting the appropriate measurements that should be used to complete a profitability analysis. Earnings per share of common stock Profit margin ratio Rate of return on total assets Rate of return on common stockholders' equity 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.) 2 (Click the icon to view the formulas.) 2018 2017 2016 2015 2014 Formula Earnings per share $ 1.80 $ 1.50 $ 1.40 $ 1.20 0.98 (n.) Select the formula reference in the last column of the table and compute the profit margin ratio for all five years. (Enter your answers as percentages rounded to the nearest tenth percent, X.X%.) Choose from any list or enter any number in the input fields and then click Check Answer. ? parts remaining Clear All Check Answer Financial Summary 2013 WEX Athletic Supply, Inc. Five-Year Financial Summary (Partial; adapted) (Dollar amounts in thousands except per share data) 2018 2017 2016 2015 2014 Net Sales Revenue $ 265,000 $ 215,000 $ 194,000 $ 162,000 $ 133,000 Net Sales Revenue Increase 23% 11% 20% 22% 17% Domestic Comparative Store Sales Increase 6% 6% 4% 8% 9% Other Income-Net 2,010 1,820 1,730 1,670 1,390 Cost of Goods Sold 199,015 164,045 150,932 126,684 105,070 Selling and Administrative Expenses 41,290 36,340 31,640 27,420 22,570 Interest: Interest Expense (1,110) (1,330) (1,300) (1,050) (880) Interest Income 105 175 190 240 170 Income Tax Expense 4,480 3,860 3,650 3,330 2,750 Net Income 21,220 11,420 8,398 5,426 3,290 Per Share of Common Stock: Net Income 1.80 1.50 1.40 1.20 0.98 Dividends 0.30 0.28 0.24 0.20 0.16 Financial Position Current Assets, Excluding Merchandise Inventory $ 31,100 $ 27,100 $ 26,600 $ 24,600 $ 21,900 $ 21,900 18,100 $ 17,000 25,900 Financial Position Current Assets, Excluding Merchandise Inventory Merchandise Inventory Property, Plant, and Equipment, Net Total Assets Current Liabilities Long-term Debt Stockholders' Equity Financial Ratios Acid-Test Ratio Rate of Return on Total Assets Rate of Return on Stockholders' Equity 31,100 $ 27,100 $ 24,900 22,300 52,000 46,000 108,000 95,400 32,200 27,200 22,100 21,000 53,700 47,200 26,600 $ 24,600 $ 21,200 19,400 40,500 35,000 88,300 79,000 29,100 26,100 17,300 19,000 41,900 33,900 65,900 16,600 12,400 36,900 1.0 1.0 0.9 0.9 1.3 22.0% 13.9% 11.6% 8.9% 7.9% 42.1% 25.6% 22.2% 15.3% 14.8% Print Done Formulas X 0 Ref. Formula (a.) 365 days - Inventory turnover (b.) Annual dividend per share + Earnings per share (c.) Annual dividend per share + Market price per share (d.) (Cash including cash equivalents + Short-term investments + Net current receivables) + Total current liabilities (e.) Cost of goods sold + Average merchandise inventory (f.) Current assets - Current liabilities (g.) Gross profit + Net sales revenue (h.) Market price per share of common stock + Earnings per share (i.) Net credit sales + Average net accounts receivables (0) (Net income + Income tax expense + Interest expense) + Interest expense (k.) Net income + Net sales (1.) (Net income + Interest expense) + Average total assets (m.) (Net income - Preferred dividends) + Average common stockholders equity (n.) (Net income - Preferred dividends) + Weighted average-number of common shares outstanding (0.) Total current assets + Total current liabilities (p.) Total liabilities - Total assets (q.) Total liabilities + Total equity Print Done Requirements X Analyze the company's financial summary for the fiscal years 2014-2018 to decide whether to invest in the common stock of WEX. Include the following sections in your analysis. 1. Trend analysis for net sales revenue and net income (use 2014 as the base year) 2. Profitability analysis. 3. Evaluation of the ability to sell merchandise inventory. 4. Evaluation of the ability to pay debts. 5. Evaluation of dividends. 6. Should you invest in the common stock of WEX Athletic Supply, Inc.? Fully explain your final decision. Print Done Homework: ACC-260 Benchmark - Topic 7 Assignment Save Score: 8.84 of 30 pts 6 of 6 (6 complete) HW Score: 77.64%, 77.64 of 100 pts %x PC-29A (similar to) Question Help In its annual report, WEX Athletic Supply, Inc. includes the following five-year financial summary: (Click the icon to view the financial summary.) Read the requirements 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 199 % 146 % 122 % 100 % 162 % 347 % Net income 645 % 255 % 165 % 100 % Trends in net sales and net income are both upward which is positive Requirement 2. Compute the profitability analysis. Begin by selecting the appropriate measurements that should be used to complete a profitability analysis. Earnings per share of common stock Profit margin ratio Rate of return on total assets Rate of return on common stockholders' equity 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.) 2 (Click the icon to view the formulas.) 2018 2017 2016 2015 2014 Formula Earnings per share $ 1.80 $ 1.50 $ 1.40 $ 1.20 0.98 (n.) Select the formula reference in the last column of the table and compute the profit margin ratio for all five years. (Enter your answers as percentages rounded to the nearest tenth percent, X.X%.) Choose from any list or enter any number in the input fields and then click Check Answer. ? parts remaining Clear All Check Answer Financial Summary 2013 WEX Athletic Supply, Inc. Five-Year Financial Summary (Partial; adapted) (Dollar amounts in thousands except per share data) 2018 2017 2016 2015 2014 Net Sales Revenue $ 265,000 $ 215,000 $ 194,000 $ 162,000 $ 133,000 Net Sales Revenue Increase 23% 11% 20% 22% 17% Domestic Comparative Store Sales Increase 6% 6% 4% 8% 9% Other Income-Net 2,010 1,820 1,730 1,670 1,390 Cost of Goods Sold 199,015 164,045 150,932 126,684 105,070 Selling and Administrative Expenses 41,290 36,340 31,640 27,420 22,570 Interest: Interest Expense (1,110) (1,330) (1,300) (1,050) (880) Interest Income 105 175 190 240 170 Income Tax Expense 4,480 3,860 3,650 3,330 2,750 Net Income 21,220 11,420 8,398 5,426 3,290 Per Share of Common Stock: Net Income 1.80 1.50 1.40 1.20 0.98 Dividends 0.30 0.28 0.24 0.20 0.16 Financial Position Current Assets, Excluding Merchandise Inventory $ 31,100 $ 27,100 $ 26,600 $ 24,600 $ 21,900 $ 21,900 18,100 $ 17,000 25,900 Financial Position Current Assets, Excluding Merchandise Inventory Merchandise Inventory Property, Plant, and Equipment, Net Total Assets Current Liabilities Long-term Debt Stockholders' Equity Financial Ratios Acid-Test Ratio Rate of Return on Total Assets Rate of Return on Stockholders' Equity 31,100 $ 27,100 $ 24,900 22,300 52,000 46,000 108,000 95,400 32,200 27,200 22,100 21,000 53,700 47,200 26,600 $ 24,600 $ 21,200 19,400 40,500 35,000 88,300 79,000 29,100 26,100 17,300 19,000 41,900 33,900 65,900 16,600 12,400 36,900 1.0 1.0 0.9 0.9 1.3 22.0% 13.9% 11.6% 8.9% 7.9% 42.1% 25.6% 22.2% 15.3% 14.8% Print Done Formulas X 0 Ref. Formula (a.) 365 days - Inventory turnover (b.) Annual dividend per share + Earnings per share (c.) Annual dividend per share + Market price per share (d.) (Cash including cash equivalents + Short-term investments + Net current receivables) + Total current liabilities (e.) Cost of goods sold + Average merchandise inventory (f.) Current assets - Current liabilities (g.) Gross profit + Net sales revenue (h.) Market price per share of common stock + Earnings per share (i.) Net credit sales + Average net accounts receivables (0) (Net income + Income tax expense + Interest expense) + Interest expense (k.) Net income + Net sales (1.) (Net income + Interest expense) + Average total assets (m.) (Net income - Preferred dividends) + Average common stockholders equity (n.) (Net income - Preferred dividends) + Weighted average-number of common shares outstanding (0.) Total current assets + Total current liabilities (p.) Total liabilities - Total assets (q.) Total liabilities + Total equity Print Done
