Chapter 13 Quiz worth 15 points Please review the Income Statement and Balance S

Question

Chapter 13 Quiz worth 15 points Please review the Income Statement and Balance Sheet (SEE INDIVIDUAL WORKSHEETS) Prepare the following analysis: 1) Calculate Horizontal (Trend) Analysis of the Income Statement and Balance Sheet 2) Calculate Vertical (Common Size) Analvsis of the Income Statement and Balance Sheet 3) Calculate the Liquidity Ratios only for COSTCO for the most recent (newest) year with a brief explanation of what each reveals to management Please note: you can update the Balance Sheet and Income Statement worksheets to reflect the results of your analysis

Explanation / Answer

Consolidated Income statement ( Horozontal) Revenue 2016 2015 Net Sales 2.12% 3.13% membership fees 4.46% 4.32% Total revenue 2.17% 3.16% Operating expenses Merchandise cost 1.82% 2.65% selling, general and administrative 5.44% 5.01% preopning exp 20.00% 3.17% total operating expenses 2.20% 2.88% operating income 1.32% 12.55% Other income (expenses) Income Expenses 7.26% 9.73% interest income and other net -23.08% 15.56% Income Before income tax 0.42% 12.73% Provision for taxes 4.02% 7.75% Net income including noncontrolling interest -1.37% 15.37% Net income attributable to noncontrolling interest -18.75% 6.67% Net income attributable to COSTCO -1.14% 15.50% Net Income per common share attributable to COSTCO Basic -0.92% 15.35% Diluted -0.74% 15.48% Share used in calculation Basic -0.20% 0.17% Diluted -0.33% 0.05% Cash Dividend declared per common share -73.89% 389.47% Consolidated Income statement ( vertical) Revenue 2016 2015 Net Sales 97.77% 97.82% membership fees 2.23% 2.18% Total revenue 100.00% 100.00% Operating expenses Merchandise cost 86.68% 86.98% selling, general and administrative 10.17% 9.85% preopning exp 0.07% 0.06% total operating expenses 96.91% 96.88% operating income 3.09% 3.12% Other income (expenses) Income Expenses -0.11% -0.11% interest income and other net 0.07% 0.09% Income Before income tax 3.05% 3.10% Provision for taxes 1.05% 1.03% Net income including noncontrolling interest 2.00% 2.07% Net income attributable to noncontrolling interest -0.02% -0.03% Net income attributable to COSTCO 1.98% 2.05% Balance sheet (Horozontal) 2016 Current Assets cash and cash equivelent -29.62% Short Term Investment -16.56% Receivables, net 2.29% Merchandise inventory 0.68% Other current assets 17.54% To tal current assets -9.30% Property plant and equipment Land 8.75% Building and improvements 10.91% Equipment and fixture 15.23% Construction in progress -13.56% 10.58% Less: Accumulated depreciation 10.42% Net property plant and equipment 10.66% Other Assets 7.77% Total Assets 0.44% Currenet Liabilities Accounts Payable -15.53% Current portion of long term debt -14.26% Accrued salaries 6.52% Accrued memebrs rewards 6.89% Deffered memebership fees 7.33% Other currenet liabilities 18.17% Total currenet liabilities -5.83% Lonf termdebt excluding currenet portion -16.30% other liabilities 52.62% Total Liabilities -6.06% Shareholders equity Preffered stock 0.00% Common stock 0.00% Additiional paid in capital 5.21% Accumulated other comprehensive loss -1.96% retained earning 17.92% Total costco shareholding equity 13.77% Non controlling interets 11.95% Total Equity 13.73% Tptal Liabilities 0.44% Balance sheet (Vertical) 2016 2015 Current Assets cash and cash equivelent 10.19% 14.54% Short Term Investment 4.07% 4.90% Receivables, net 3.78% 3.71% Merchandise inventory 27.05% 26.98% Other current assets 0.81% 0.69% To tal current assets 45.89% 50.82% Property plant and equipment Land 16.27% 15.03% Building and improvements 42.20% 38.22% Equipment and fixture 18.32% 15.97% Construction in progress 2.11% 2.46% 78.90% 71.67% Less: Accumulated depreciation -27.51% -25.03% Net property plant and equipment 51.39% 46.65% Other Assets 2.72% 2.54% Total Assets 100.00% 100.00% Currenet Liabilities Accounts Payable 22.95% 27.29% Current portion of long term debt 3.32% 3.89% Accrued salaries 7.93% 7.47% Accrued memebrs rewards 2.62% 2.46% Deffered memebership fees 4.11% 3.84% Other currenet liabilities 6.04% 5.13% Total currenet liabilities 46.96% 50.09% Lonf termdebt excluding currenet portion 12.25% 14.70% other liabilities 3.60% 2.37% Total Liabilities 62.81% 67.16% Shareholders equity Preffered stock 0.00% 0.00% Common stock 0.01% 0.01% Additiional paid in capital 16.55% 15.80% Accumulated other comprehensive loss -3.31% -3.40% retained earning 23.18% 19.74% Total costco shareholding equity 36.42% 32.16% Non controlling interets 0.76% 0.68% Total Equity 37.19% 32.84% Tptal Liabilities 100.00% 100.00%

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