Reed Clothier Income Statement Net Sales Cost of Goods Gross profit General & administrative Expenses Depreciation

& amortization Interest expense Earnings before taxes Income Taxes Net income Balance Sheet Cash Inventories Accounts receivable Total current assets Fixed assets Total assets Accounts payable Notes payable Other current liabilities Total current liabilities Long-term debt Total liabilities Stockholders' equity Total liabilities and Stockholders' Equity

2,000 1,500 500 300 30 60 110 43 67

20 500 400 920 700 1,620 200 250 50 500 600 1,100 520 1,620

Liquidity Ratios Current ratio Quick ratio Receivables turnover Average collection period Efficiency Ratios Total asset turnover Inventory turnover Payable turnover

Reed 1.84 0.84 5.00 73.00

Industry 2.70 1.60 7.70 47.40

1.23 3.00 7.50

1.90 7.00 15.10

Profitability Ratios Gross profit margin Net profit margin Return on common equity

25.0% 3.4% 12.9%

33 7.8 25.9

Year 1991 1992 1993 1994

Inventories Net Sales Change in inventory $378 1,812 411 1,886 8.73% 452 1,954 9.98% 491 2,035 8.63%

4) Reed Clothiers Income Statement Sales Cost of Goods Sold Gross Profit General & Administrative Expenses Depreciation & Amortization Interest Expense Earnings before Taxes Income Tax Net Income

$1,938,000 $1,298,460 $639,540 $352,716 $32,000 $23,256 $231,568 $94,962 $136,606

100% 75% 33%

Change in sales Inventory as % of sales 4.08% 3.61% 4.15% 21.79% 23.13% 24.13%