Question

EXHIBIT 1 I Common-Sized Financial Da Retail Assets Cash & Short-Term Investments Receivables nventories Current Assets-Other Current Assets-Total Net Fixed Assets Assets-Other Intangibles Investments & Advances Assets-Total 4.6 7.0 1.4 17.0 24.5 16.7 1.5 2.5 32.0 43.1 57.0 52.2 2.0 4.0 9.0 0.6 0.0 0.0 100.0 100.0 Liabilities & Equity Accounts Payable Debt in Current Liabilities Income Taxes Payable Current Liabilities-Other Current Liabilities-Total LT Debt Deferred Taxes Liabilities-Other Liabilities-Total Stockholders' Equity Total Liabilities & Equity 18.0 17.9 6.5 1.6 1.1 0.9 10.1 5.1 35.7 25.5 19.7 28.0 nmf 3.0 2.5 3.2 58.9 59.7 41.1 40.3 100.0 100.0 Income/Expenses Sales-Net Cost of Goods Sold Gross Profit SG&A Expense Depreciation Earnings Before Interest &Taxes Nonoperating Income (Expense) 0.5 1.0 Interest Income (Expense) Special Items-Income (Expense) Pretax Income 100.0 100.0 75.3 67.1 24.7 32.9 17.9 22.5 1.5 2.7 5.3 7.7 0.8 0.0 0.0 (0.2) 5.6 6.5 2.0 2.4 Income Taxes-Total Net Income (Loss) 3.6 6.8

Annalyze Financial ratios of retail industry

Answer 1

Common Size Income Statement
			M	N
Revenues			100.00%	100.00%
COGS			75.30%	67.10%
Gross Profit			24.70%	32.90%
Operating Expenses:
SG&A			17.90%	22.50%
Depreciation			1.50%	2.70%
EBIT			5.30%	7.70%
Non operative Income(Expenses)			0.50%	1.00%
Interest Income(Expenses)			1.06%	0.00%
Special Item Income(Expenses)			0.00%	-0.20%
EBT			5.60%	6.50%
Income Tax Expense			2.00%	2.40%
Net Income Continuing ops			3.60%	6.80%

Common Size Balance Sheet
			M	N
Assets
Current Assets
Cash and Cash Equivalents			4.60%	7.00%
Net Receivables			1.40%	17.00%
Inventory			24.50%	16.70%
Other Current Assets			1.50%	2.50%
Total Current Assets			32.00%	43.10%
PP&E			57.00%	52.20%
Intangile Assets			9.00%	0.60%
Other Assets			2.00%	4.00%
Total Assets			100.00%	100.00%
Liabilities
Current Liabilities
Accounts Payable			18.00%	17.90%
Short/Current LT Debt			6.50%	1.60%
Other CL			10.10%	5.10%
Total Current Liabilities			35.70%	25.50%
LT Debt			19.70%	28.00%
Other Liabilities			2.50%	3.20%
Deferred Tax			1.00%	3.00%
Total Liabilities			58.90%	59.70%
Stockholders' Equity
Common Stock			41.10%	40.30%
Total Stockholder Equity			41.10%	40.30%

Financial Ratios
				M	N
Liquidity Ratios:
Current Ratio			Current Assets/Current Liabilities	0.90	1.69
Quick Ratio			Cash + Accts. Rec./Current Liabilities	0.21	1.04
Asset Management Ratios:
Inventory Turnover Ratio			Cost of Goods Sold/Inventory	4.08	5.99
Days Inventory Outstanding (DIO)			Inventory/(COGS/365)	118.76	90.84
Days Sales Outstanding (DSO)			Net Receivable/(Sales/365)	5.11	62.05
Total Asset Turnover (TAT)			Total Sales/Total Assets	1.00	1.00
Debt Management Ratios:
Debt Ratio			Total Liabilities/Total Assets	59%	60%
Debt to Equity			Total Liabilities/Total Equity	143%	148%
Days Payables Outstanding (DPO)			Trade Payable/(COGS/365)	87.25	97.37
Interest Coverage (Times Interest Earned)			EBIT/Interest	10.60	7.70
Profitability Ratios:
Gross Margin			Gross Profit/Net Sales	25%	33%