The 2021 financial statements for Kohl's Corporation are provided for you. The Balance Sheet includes data for 2020. The Statement of Operations, Statements of Changes in Shareholders' Equity, and Statements of Cash Flows include three years of data (2021, 2020, and 2019). Answer the following questions about Kohl's Corporation. SHOW YOUR WORK FOR ALL CALCULATIONS! 1. Calculate the current ratio for Kohl's for 2021 and 2020. Discuss what the ratio means and what the change indicates for Kohl's. 2. Calculate the debt/equity ratio for Kohl's for 2021 and 2020. What does the ratio suggests about Kohl's solvency. 3. The Balance Sheet indicates that Kohl's has $1,270 million in accrued liabilities at January 30, 2021. What specific type of liabilities might be included in accrued liabilities (list 3 specific types). 4. Calculate the inventory turnover for 2020. What does this number mean? 5. Based on the information provided in shareholders' equity, what is the likely par value of the stock? 6. Calculate Kohl's gross profit for 2021 and 2020. Did gross profit improve or decline between the two years? What is a possible explanation for the change? 7. What is the three-year trend for Koh's net income? Provide a graphical representation that highlights the change over time. (1 recommend completing this in Excel). 8. In general, companies do not like to reduce their dividends. Discuss why companies don't usually decrease their dividends and why Kohl's might have done so in 2020. 9. Why did Kohl's add back depreciation and amortization expense on the Statements of Cash Flows? 10. Why is the gain on real estate sales added back in the operating section of the balance sheet? Why are the proceeds from the sale of real estate added in the investing section? 11. Financial analysis of one ratio at a point in time provides little information. Explain two ways to provide a context for ratio analysis. BONUS: Utilize the information provided in the Balance Sheet, Income Statement, and Statement of Cash Flows to estimate the amount of inventory PURCHASED by Kohl's from February 1, 2020 to January 30, 2021. I strongly recommend that you use t-accounts to think about this answer. KOHL'S CORPORATION CONSOLIDATED BALANCE SHEETS January 30, 2021 February 1 2020 Dollars in Millions) Assets Current assets: Cash and cash equivalents Merchandise inventories Other Total current assets Property and equipment, net Operating leases Other assets Total assets 2,271 2,590 974 5,835 6,689 2,398 415 15,337 723 3,537 389 4,849 7352 2,301 163 14 555 1,476 1,270 1,206 1281 Liabilities and Shareholders' Equity Current liabilities Accounts payable Accrued liabilities Current portion of Finance lease and financing obligations Operating teases Total current liabilities Long-term debt Finance lease and financing obligations Operating leases Deferred income taxes Other long-term liabilities Shareholders' equity Common stock - 377 and 375 million shares issued Pald in capital Treasury stock, at cost 219 and 219 million shares Retained eamings Total shareholders' equity Total liabilities and shareholders equity See accompanying Notes to Consolidated Financial Statements 115 161 3,022 2,451 1,387 2,625 302 354 124 158 2769 1,856 1.367 2,619 260 234 4 3,319 (11,595) 13,468 5.196 15,337 3.272 (11,571) 13.745 5,450 14,555 KOHL'S CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS 2020 2010 15,031 S 924 15,955 10,360 18,885 5 1,089 19,974 12,140 2018 19.167 1,062 20,229 12,199 5,705 917 113 5,601 964 104 Dollars in Millions Except per Share Data) Net sales Other revenue Total revenue Cost of merchandise sold Operating expenses Selling, general, and administrative Depreciation and amortization Impairments, store closing, and other costs Gain on sale of real estate Operating (loss) income Interest expense, net Gain) loss on extinguishment of debt (Loss) income before income taxes Benefit) provision for Income taxes Net (los) income Net (loss) Income per share: Basic Diluted 5,021 874 89 (127) (262) 284 1,099 207 (9) 901 210 691 S 1,361 256 63 1,042 241 (546) (383) (1635 801 $ (1.06) (1.06 439 $ 4.37 IS 4.88 484 See accompanying Notes to Consolidated Financial Statements KOHL'S CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY 2020 2010 2018 Dollars In Millone, Except per Share Data) Common stock Balance, beginning of period Stock-based awards Balance end of period Pald-in capital Balance, beginning of period Stock-based awards Balance, end of period 3,272 47 3,319 3.204 68 3272 3.078 126 3,204 (11,571) (8) (22) (11.076) (470) (31) 6 (11571) 5 (10,651 (396) (34) 5 (11070 (11,595) Treasury stock Balance, beginning of period Treasury stock purchases Stock-based awards Dividends pald Balance, end of period Accumulated other comprehensive (loss) income (a) Balance, beginning of period Other comprehensive income Balance, end of period Retained earnings Balance, beginning of period Change in accounting standard (6) Net (loss) earnings Dividends paid Balance, end of period Total shareholders' equity, end of period (11) 11 13,746 12.999 (163) (114) 13.468 13,395 88 691 (420) 13745 801 (405 13,395 5.1965 5.450 373 375 2 374 1 375 377 374 Common stock Shares, beginning of period Stock-based awards Shares, end of period Treasury stock Sharen beginning of period Treasury stock purchases Shares, end of period Total shares outstanding, ond of period (219) (205) (211) (8) (219) 156 (219) 150 1211 163 Dividends paid per common share 0.704 2.60 244 2018 2018 691 $ 801 054 87 917 56 51 54 (9) 150 11 18 79 106 (84 (51) 48 19 (134) (150) 1657 2107 (555) (578) KOHL'S CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Dalle In Millona) 2030 Operating activities Net loss) Income (163) Adjustments to reconcile net (108) Xe come to niet cash provided by operating activities Depreciation and amortization 874 Share-based compensation 40 Deferred Income taxes 18 Impairments store closing, and other costs 54 (Gain) on sale of real estate (127) (Gain) loss on extinguishment of debt Non cash inventory costs 187 Non-cash lease expense 149 Other non-cash expense 22 Changes in operating assets and liabilities: Merchandise inventories 768 Other current and long-term assets (813) Accounts payable 270 Accrued and other long-term abilities 199 Operating lease llabilities (150) Net cash provided by operating activities 1,338 Investing activities Acquisition of property and equipment (334) Proceeds from sale of real estate 197 Other Net cash used in investing activities (137) Financing activities Proceeds from issuance of debt 2,097 Deferred financing costs (19) Treasury stock purchases (8) Shares withheld for taxes on vested restricted shares (22) Dividends paid (108) Reduction of long-term borrowing (1,497) Premium paid on redemption of debt Finance lease and financing obligation payments (105) Proceeds from stock option exercises Proceeds from financing obligations 9 Net cash provided by (used in financing activities 347 Net increase (decrease in cash and cash equivalents 1,548 Cash and cash equivalents at beginning of period 723 Cash and cash equivalents at end of period 2,271 S Supplemental Information Interest paid, net of capitalized interest 254 S Income taxes paid 419 Property and equipment acquired through: Finance lease liabilities 128 Operating lease liabilities 165 Financing obligations See accompanying Notes to Consolidated Financial Statements 18 (837) (672) (396 (470) (31) (423) (6) (34) (409 (943) (46) 20) 36 (113) 1 11 (1,031) (211) 934 723 $ (1,900 (374) 1,308 934 193 5 282 308 172 37 236 106 46