• Using financial ratio analysis, you will find some ratios in module 4, evaluate American Apparels financial performance for the past five years. At a minimum, discuss the results of the following ratios:
  • Leverage or long-term solvency
  • Interest coverage
  • Liquidity or short-term solvency
  • Efficiency or activity
  • Overall profitability
  • Cashperformance

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EXHIBIT 3: AMERICAN APPAREL INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET, 20082013

	December 31,
(Amounts and shares in thousands, except per share amounts)	2013	2012	2011	2010	2009	2008
ASSETS
CURRENT ASSETS
Cash	$ 8,676	$ 12,853	$ 10,293	$ 7,656	$ 9,046	$ 11,368
Trade accounts receivable	20,701	22,962	20,939	16,688	16,907	16,439
Restricted cash	-	3,733
Prepaid expenses and other current assets	15,636	9,589	7,631	9,401	9,994	5,369
Inventories, net	169,378	174,229	185,764	178,052	141,235	148,154
Income taxes receivable and prepaid income taxes	306	530	5,955	4,114	4,494	604
Deferred income taxes, net of valuation allowance	599	494	148	626	4,627	3,935
Total current assets	215,296	224,390	230,730	216,537	186,303	185,869
Property and equipment, net	69,303	67,778	67,438	85,400	103,310	112,408
Deffered taxes	2,426	1,261	1,529	1,695	12,033	10,137
Other assets, net	46,727	34,783	25,024	24,318	25,933	25,195
TOTAL ASSETS	$ 333,752	$ 328,212	$ 324,721	$ 327,950	$ 327,579	$ 333,609
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES
Cash overdraft	$ 3,993	$-	$ 1,921	$ 3,328	$ 3,741	$ 2,413
Revolving credit facilities and current portion of long-term
debt	44,042	60,556	50,375	138,478	6,346	34,318
Accounts payable	38,290	38,160	33,920	31,534	19,705	32,731
Accrued expenses and other current liabilities	50,018	41,516	43,725	39,028	30,573	22,140
Fair value of warrant liability	20,954	17,241	9,633	993	2,608	8,582
Income taxes payable	1,742	2,137	2,445	230
Deferred income tax liability, current	1,241	296	150	-
Current portion of capital lease obligations	1,709	1,703	1,181	560	1,907	2,616
Total current liabilities	161,989	161,609	143,350	214,151	64,880	102,800
LONG-TERM DEBT, net of unamortized discount of $5,779 and
$27,929 at December 31, 2013 and 2012, respectively	213,468	110,012	97,142	444
Subordinated notes payble to related party	5,453	2,844	-	4,611	65,997	67,050
Capital lease obligations, net of current portion			1,726	542	4,355	3,292
Deferred tax liability	536	262	96	260	1,020	1,986
Deferred rent, net of current portion	18,225	20,706	22,231	24,924	22,052	16,011
Other long-term liabilities	11,485	10,695	12,046	7,994	11,934	6,058
Total Long -Term Liabilites	249,167	144,519	133,241	38,775	105,358	94,397
TOTAL LIABILITIES	411,156	306,128	276,591	252,926	$ 170,238	$ 197,197
STOCKHOLDERS' (DEFICIT) EQUITY
Shares outstanding at December 31, 2012	11	11	11	8	7	7
Additional paid-in capital	185,472	177,081	166,486	153,881	150,449	131,252
Accumulated other comprehensive loss	(4,306)	(2,725)	(3,356)	(3,168)	(2,083)	(2,703)
Accumulated deficit	(256,424)	(150,126)	(112,854)	(73,540)	19,012	17,900
Less: Treasury stock, 304 shares at cost	(2,157)	(2,157)	(2,157)	(2,157)	(10,044)	(10,044)
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY	(77,404)	22,084	48,130	75,024	157,341	136,412
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$ 333,752	$ 328,212	$ 324,721	$ 327,950	$ 327,579	$ 333,609

Source: Compiled by the author from American Apparels 8-K reports for the year 20082013. American Apparel, Inc., Edgar Online, accessed March 27, 2016.

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