Question

Appendix B Specimen Financial Statements: Columbia Sportswear Company Columbia Sportswear Company is a leader in outdoor sportswear. The following are Columbia's financial statements as presented in its 2016 annual report. The complete annual report, including notes to the financial statements, is available at the company's website. COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Year Ended December 31, 2015 2016 2014 Net sales Cost of sales Gross profit Selling, general and administrative expenses Net licensing income. . Income from operations Interest income, net.. Interest expense on note payable to related party (Note 22). Other non-operating expense Income before income tax. Income tax expense (Note 10) Net income Net income attributable to non-controlling interest Net income attributable to Columbia Sportswear Company Earnings per share attributable to Columbia Sportswear Company (Note 16): Basic.. Diluted Weighted average shares outstanding (Note 16): Basic. $ 2,377,045 $ 2,326,180 $ 2,100,590 1,266,697 1,252,680 1,145,639 1,110,348 1,073,500 954,951 864,084 831,971 763,063 10,244 8,192 6,956 256,508 249,721 198,844 2,003 1,531 1,004 (1,041) (1,099) (1,053) (572) (2,834) (274) 256,898 247,319 198,521 (58,459) (67,468) (56,662) 198,439 179,851 141,859 6,541 5,514 4,686 $ 191,898 $ 174,337 $ 137,173 $ 2.48 $ 1.97 2.75 $ 2.72 2.45 1.94 69,683 70,162 69,807

(a)

Based on the information contained in these financial statements, determine the following values for each company. (Round all percentages to 1 decimal place, e.g. 17.5%.)

(1) Profit margin for 2016. (For VF, use “Net Sales.”)

		Profit margin
Columbia Sportswear Company		enter percentages rounded to 1 decimal place	%
VF Corporation		enter percentages rounded to 1 decimal place	%

(2) Gross profit for 2016. (Enter amounts in thousands.)

		Gross profit (000’s)
Columbia Sportswear Company		$enter an amount in thousands of dollars
VF Corporation		$enter an amount in thousands of dollars

(3) Gross profit rate for 2016.

		Gross profit rate
Columbia Sportswear Company		enter percentages rounded to 1 decimal place	%
VF Corporation		enter percentages rounded to 1 decimal place	%

(4) Operating income for 2016. (Enter amounts in thousands.)

		Operating income (000's)
Columbia Sportswear Company		$enter an amount in thousands of dollars
VF Corporation		$enter an amount in thousands of dollars

(5) Percentage change in operating Income from 2015 to 2016. (For Columbia, use Income from operations.) (Show decrease with either a negative sign, e.g. -15.2% or in parentheses, e.g. (15.2)%.)

		Percent change in operating income
Columbia Sportswear Company		enter percentages rounded to 1 decimal place	%
VF Corporation		enter percentages rounded to 1 decimal place	%

Answer 1

The correct answers are:

Profit Margin Gross Profit Gross Profit Rate Operating Income % Change in Operating Income Columbia Sportswear Co. VF Corp. 8.3% 9.0% S 1.110,348 $5.705,979 46.7% 47.9% S 256,508 $1.499.226 2.7% -16.1%

Workings

The ratios will be calculated in the following manner:

Profit Margin Gross Profit Gross Profit Rate Operating Income % Change in Operating Income Formula Net income,Net revenues Net Revenues - Cost of Goods Sold Gross Profit/Net Revenues Gross Profit-Operating Expenses+other operating income Operating income of 2016-operating income of 2015) operating income of 2015 Columbia Sportswear Co. Workings 8.3% =198439/2377045 S 1,110,348 =2377045-1266697 46.7% = 1110348/2377045 S 256,508 =1110348-864084+10244 2.7% =(256508-249721)/249721 VF Corp. Workings 9.0%=1074104/11902314 $5.705,979 =11902314-6196335 47.9% =5705979/11902314 $1,499,226 =5705979-4243798-79644+116689 -16.1% =(1499226-1787927)/1787927

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