Question

Using the formulas in Table 4.1 and Urban Outfitters’s financial statement starting on page 117, calculate the following measures of financial performance. Be sure to report items (a) through (e) in percentages (i.e., multiply your result x 100).

a. Gross profit margin

b. Operating profit margin

c. Net profit margin

d. Times-interest-earned (or coverage) ratio

e. Return on stockholders’ equity

f. Return on assets

g. Debt-to-equity ratio

h. Days of inventory

i. Inventory turnover ratio

j. Average collection period

From 2016 to 2017, Urban Outfitters’s gross profit margins showed: Favorable increase or decrease, unfavorable, neither?

From 2016 to 2017, Urban Outfitters’s return on equity and return on assets showed which of the following: favorable increase or decrease, unfavorable, neither?

From 2016 to 2017, Urban Outfitters’s times-interest-earned ratio showed which of the following: favorable increase or decrease, unfavorable, neither?

From 2016 to 2017, Urban Outfitters's debt-to-equity ratio showed: favorable increase or decrease, unfavorable, neither?

2017 2016 $3,545,794 Net sales (total revenue) $3,445,134 Cost of sales 2,301,181 2,243,232 Selling, general, and administrative 906,086 848,323 Operating income 338,527 353,579 Other income (expense) Other expenses (4,587) (5,449) Interest income and other, net 4159 1901 Income before income taxes 338,099 350,031 Provision for income taxes 119,979 125,542 Net income $218,120 $224,489 Basic carnings per share $ 1.87 $ 1.79 Diluted earnings per share $ 1.86 $ 1.78 Source: Urban Outfitters, Inc., 2017 Consolidated Balance Sheets for Urban Outfitters, Inc., 2016-2017 (in thousands, except per share data)

Answer 1

Gross profit margin = Gross profit margin x 100 - Total revenue Iisalee 2016 3545794-2301181 x 100 3,545 794 12,44613 4100 = 35.10% 3545 794 2017 - 34 45,134-2243232 X 100 3445134 x 100 = 34. 1201902 3445134 Operating profit margin EBIT Net Income X 100 revenue Isales 2016 = 338527 x 100 = 9.547% 3545794 2017 = 353579 x 100 = 10.26% 3445134 -Net profit margin Net Income x 100 sales

8.56% 6.57% 2016 : 218120 x 100 = 3545794 2017 - 224 489 x 100 = 3445134 Times Interest earned - EBIT Total Interest t d X 100 e pense 2016 = 838527 - GSX XGASA interest Expense is not given. e Return on stockholders equity = Net Income 1 x 100 - Shareholdres equily 2016 = 218120 x 100 = 16.61% 1313084 2017 = 224,489 x 100 = 19.74% 1137227 f. Return On Sales assets Net Income x 100 Total assets 2016 = 218120 x100 = 11.46% 1902637 224489 x 100 = 12.24 L833301

Average collection period 365 Day in year Debtors Turnover Patio Dobtors Turnover Ratio = Total sales Average Receivon 2016= 365 = 5.61 days 8:02 days 2017= 365 45.49 Debtors Turnover Ratio 2016 = 65.05 2017 = 45.49 From 2016 to 2017. Gross profit margin showed Favourable decrease Return on asset showed Farourable Increase we can't calculate interest - earned rato as interest expense not given Debt to equity ratio showed ravourablet Increase.

g. Debt to equily ralio. Totlal liabilities shareholden 2016 = - 0,64 589,553 1313084 2017 : 696074 11 37227 h. Days of Inventory Days in year Inventory turnover Ratio 365 = 53-75 days 2016 = 6.79 i 2017 = 365 = 53.75 day. 6.79 Inventory Turnover Ratio I cost of Goods sold Average Inventory 2301181 = 6.79 338.590 2016 2017 = 2,243,232 330223 = 6.79