Concept explainers
Concept Introduction:
Annual report:
The annual report of the company includes the financial and other operating descriptions about the business for a particular year.
Financial statements: Financial statements are prepared to summaries the account at the end of the period. The statements prepared are Income statement,
Requirement-a:
To Indicate:
The amount of Assets, Liabilities and
Answer to Problem 74.3C
The amount of Assets, Liabilities and Stockholder’s equity of Under Armour Inc. and Columbia Sportswear for the year ended Dec. 31, 2016 are as follows:
Year 2016 | Under Armour Inc. | Columbia Sportswear |
$ in Thousands | ||
Assets | 3,644,331 | 2,013,894 |
Liabilities | 1,613,431 | 432,383 |
Equity | 2,030,900 | 1,581,511 |
Explanation of Solution
The amount of Assets, Liabilities and Stockholder’s equity of Under Armour Inc. and Columbia Sportswear for the year ended Dec. 31, 2016 can be found from the Consolidated balance Sheet as follows:
Year 2016 | Under Armour Inc. | Columbia Sportswear |
$ in Thousands | ||
Assets | 3,644,331 | 2,013,894 |
Liabilities | 1,613,431 | 432,383 |
Equity | 2,030,900 | 1,581,511 |
Concept Introduction:
Annual report:
The annual report of the company includes the financial and other operating descriptions about the business for a particular year.
Financial statements: Financial statements are prepared to summaries the account at the end of the period. The statements prepared are Income statement, Balance sheet, Statement of owner’s equity and Cash flows statements.
Requirement-b:
To Indicate:
The amount of Current Assets and Current Liabilities of Under Armour Inc. and Columbia Sportswear for the year ended Dec. 31, 2016.
Answer to Problem 74.3C
The amounts of Current Assets and Current Liabilities of Under Armour Inc. and Columbia Sportswear for the year ended Dec. 31, 2016 are as follows:
Year 2016 | Under Armour Inc. | Columbia Sportswear |
$ in Thousands | ||
Current Assets | 1,965,153 | 1,412,023 |
Current Liabilities | 685,816 | 362,851 |
Explanation of Solution
The amount of Current Assets and Current Liabilities of Under Armour Inc. and Columbia Sportswear for the year ended Dec. 31, 2016 can be found from the Consolidated balance Sheet as follows:
Year 2016 | Under Armour Inc. | Columbia Sportswear |
$ in Thousands | ||
Current Assets | 1,965,153 | 1,412,023 |
Current Liabilities | 685,816 | 362,851 |
Concept Introduction:
Annual report:
The annual report of the company includes the financial and other operating descriptions about the business for a particular year.
Financial statements: Financial statements are prepared to summaries the account at the end of the period. The statements prepared are Income statement, Balance sheet, Statement of owner’s equity and Cash flows statements.
Requirement-c:
To Indicate:
The liquidity of each company.
Answer to Problem 74.3C
The liquidity of each company is as follows:
Year 2016 | Under Armour Inc. | Columbia Sportswear |
2.87 | 3.89 |
Hence, Columbia Sportswear is more liquid.
Explanation of Solution
The liquidity of each company is assessed using the current ratio as follows:
Year 2016 | Under Armour Inc. | Columbia Sportswear |
$ in Thousands | ||
Current Assets (A) | 1,965,153 | 1,412,023 |
Current Liabilities (B) | 685,816 | 362,851 |
Current Ratio (A/B) | 2.87 | 3.89 |
Hence, Columbia Sportswear is more liquid.
Concept Introduction:
Annual report:
The annual report of the company includes the financial and other operating descriptions about the business for a particular year.
Financial statements: Financial statements are prepared to summaries the account at the end of the period. The statements prepared are Income statement, Balance sheet, Statement of owner’s equity and Cash flows statements.
Requirement-d:
To Indicate:
The similarity between the companies.
Answer to Problem 74.3C
Both the companies have similar business and cash flow patterns.
Explanation of Solution
The liquidity of each company is assessed using the current ratio as follows:
Year 2016 | Under Armour Inc. | Columbia Sportswear |
$ in Thousands | ||
Current Assets (A) | 1,965,153 | 1,412,023 |
Current Liabilities (B) | 685,816 | 362,851 |
Current Ratio (A/B) | 2.87 | 3.89 |
Both the companies have similar business and cash flow patterns but Columbia Sportswear is more liquid.
Want to see more full solutions like this?
Chapter 1 Solutions
Cornerstones of Financial Accounting
- Financial statement analysis The financial statements for Nike, Inc., are presented in Appendix D at the end of the text. Use the following additional information (in thousands): Instructions 1. Determine the following measures for the fiscal years ended May 31, 2016, and May 31, 2015. Round ratios and percentages to one decimal place. a. Working capital b. Current ratio c. Quick ratio d. Accounts receivable turnover e. Number of days sales in receivables f. Inventory turnover g. Number of days sales in inventory h. Ratio of liabilities to stockholders equity i. Asset turnover j. Return on total assets. k. Return on common stockholders equity l. Price-earnings ratio, assuming that the market price was 54.90 per share on May 29, 2016, and 52.81 per share on May 30, 2015 m. Percentage relationship of net income to sales 2. What conclusions can be drawn from these analyses?arrow_forwardReal-world annual report The financial statements for Nike, Inc. (NKE), are presented in Appendix E at the end of the text. The following additional information is available (in thousands): Instructions 1. Determine the following measures for the fiscal years ended May 31, 2017, and May 31, 2016. Round ratios and percentages to one decimal place. a. Working capital b. Current ratio c. Quick ratio d. Accounts receivable turnover e. Number of days sales in receivables f. Inventory turnover g. Number of days sales in inventory' h. Ratio of liabilities to stockholders equity i. Asset turnover j. Return on total assets, assuming interest expense is 82 million for the year ending May 31. 2017, and 33 million for the year ending May 31, 2016. k. k. Return on common stockholders equity l. Price-eamings ratio, assuming that the market price was 52.81 per share on May 31, 2017, and 54.35 per share on May 31, 2016. m. m. Percentage relationship of net income to sales 2. What conclusions can be drawn from these analyses?arrow_forwardFinancial Statement Analysis The financial statements for Nike, Inc., are presented in Appendix C at the end of the text. The following additional information (in thousands) is available: Instructions 1. Determine the following measures for the fiscal years ended May 31, 2013 (fiscal 2012), and May 31, 2012 (fiscal 2011), rounding to one decimal place. a. Working capital b. Current ratio c. Quick ratio d. Accounts receivable turnover e. Number of days sales in receivables f. Inventory turnover g. Number of days sales in inventory h. Ratio of liabilities to stockholders equity i. Ratio of sales to assets j. Rate earned on total assets, assuming interest expense is 23 million for the year ending May 31, 2013, and 31 million for the year ending May 31, 2012 k. Rate earned on common stockholders equity l. Price-earnings ratio, assuming that the market price was 61.66 per share on May 31, 2013, and 53.10 per share on May 31, 2012 m. Percentage relationship of net income to sales 2. What conclusions can be drawn from these analyses?arrow_forward
- Comparative Analysis: Under Armour, Inc., vs. Columbia Sportswear Refer to the 10-K reports of Under Armour, Inc., and Columbia Sportswear that are available for download from the companion website at CengageBrain.com. Required: What amounts do Under Armour and Columbia report for inventories in their consolidated balance sheets at December 2016 and December 2015?arrow_forwardA Preparation of Ratios Refer to the financial statements for Burch Industries in Problem 12-89A and the following data. Required: 1. Prepare all the financial ratios for Burch for 2019 and 2018 (using percentage terms where appropriate and rounding all answers to two decimal places). 2. CONCEPTUAL CONNECTION Explain whether Burchs short-term liquidity is adequate. 3. CONCEPTUAL CONNECTION Discuss whether Burch uses its assets efficiently. 4. CONCEPTUAL CONNECTION Determine whether Burch is profitable. 5. CONCEPTUAL CONNECTION Discuss whether long-term creditors should regard Burch as a high-risk or a low-risk firm. 6. Perform a Dupont analysis (rounding to two decimal places) for 2018 and 2019.arrow_forwardSuppose selected comparative statement data for the giant bookseller Barnes & Noble are presented here. All balance sheet data are as of the end of the fiscal year (in millions). 2017 2016 Net sales $4,750 $5,401 Cost of goods sold 3,901 3,500 Net income 55 120 Accounts receivable 65 109 Inventory 1,250 1,350 Total assets 2,850 3,150 Total common stockholders' equity 961 1,111 Compute the following ratios for 2017. (Round asset turnover to 2 decimal places, e.g 1.83 and all other answers to 1 decimal place, e.g. 1.8 or 2.5%)arrow_forward
- Current Position Analysis The following data were taken from the comparative balance sheet of Osborn Sisters Company for the years ended December 31, 20Y9 and December 31, 20Y8: Dec. 31, 20Y9 Dec. 31, 20Y8 Cash $361,500 $268,700 Temporary investments 385,700 294,400 Accounts and notes receivable (net) 354,800 320,900 Inventories 495,900 397,800 Prepaid expenses 374,100 122,200 Total current assets $1,972,000 $1,404,000 Accounts payable $336,400 $364,000 Accrued liabilities 243,600 156,000 Total current liabilities $580,000 $520,000 a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place. 20Y9 20Υ8 Working capital $ 2$ Current ratio Quick ratioarrow_forwardFINANCIAL RATIO: Requirement: Compute for the following financial ratios for the year 2021 (round-off answers to two decimal places) a. Current ratio b. Quick (Acid-test) ratio c. Working capital d. Inventory turnover e. Days of inventory (use 365 days) f. Accounts receivable turnover (assume all sales are on credit) g. Days of receivable (use 365 days) h. Debt ratio i. Equity ratio j. Debt-to-equity ratio k. Gross profit ratio 1. Net profit ratio m. Return on assets n. Return on equityarrow_forwardQuestion 2Alex is currently considering to invest his money in one of the companies between Company A and Company B. The summarized final accounts of the companies for their last completed financial year are as follows: a. Calculate the following ratios for Company A and Company B. State clearly the formulae used for each ratio: i. Gross Profit Marginii. Net Profit Marginiii. Inventory Turnover Period (days)iv. Receivables Collection Period (days)arrow_forward
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningFinancial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage LearningFinancial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,