Question

In its annual report, WRS 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 % % % % Financial Summary Net income 0 % 0 % 0 % 0 % - X Requirements 2013 Analyze the company's financial summary for the fiscal years 2014-2018 to decide whether to invest in the common stock of WRS. 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 WRS Athletic Supply, Inc.? Fully explain your final decision. 2014 132,000 17% 9% 1,300 104,676 22,560 (820) 145 2,710 2,679 Print Done WRS Athletic Supply, Inc. Five-Year Financial Summary (Partial; adapted) (Dollar amounts in thousands except per share data) 2018 2017 2016 2015 Net Sales Revenue $ 245,000 $ 220,000 $ 198,000 $ 164,000 $ Net Sales Revenue Increase 11% 11% 21% 24% Domestic Comparative Store Sales Increase 5% 7% 4% 8% Other Income—Net 2,090 1,810 1,800 1,660 Cost of Goods Sold 184,730 168,300 154,044 128,084 Selling and Administrative Expenses 41,280 36,370 31,670 27,410 Interest: Interest Expense (1,020) (1,320) (1,360) (1,030) Interest Income 135 185 160 200 Income Tax Expense 4.400 3,810 3,680 3,310 Net Income 15,795 12,195 9 ,206 6,026 Per Share of Common Stock: Net Income 1.80 1.50 1.40 1.20 Dividends 0.40 0.38 0.34 0.30 Financial Position Current Assets, Excluding Merchandise Inventory 30,900 $ 27,000 $ 26,600 $ 24,600 $ Merchandise Inventory 24,600 23,100 21,200 19,800 Property, Plant, and Equipment, Net 51,900 45,500 40,100 35,200 Total Assets 107,400 95,600 87,900 79,600 Current Liabilities 32,900 27,300 2 8,700 25,900 Long-term Debt 22,100 20,900 1 7,300 18,100 Stockholders' Equity 52,400 47,400 41,900 35,600 Financial Ratios Acid-Test Ratio 0.9 1.0 0.9 0.9 Rate of Return on Total Assets 16.6% 14.7% 12.6% 9.7% Rate of Return on Stockholders' Equity 31.7% 27.3% 23.8% 16.7% 0.98 0.26 16,300 22,100 17,800 $ 25,500 65,400 16,400 12,400 36,600 1.3 8.7% 16.2% Print Done