Question

For Crafting and Executing Strategy, The Quest for Competitive Advantage 22nd Edition: Chapter 4, Page 117-119- Assurance of Learning Exercises 1.) Using the financial ratios provided in table 4.1 and following the financial statement information presented for Urban Outfitters, Inc., calculate the following ratios for Urban Outfitters for both 2016 and 2017: a.Gross Profit Margins, 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.Invemtory turnover ratio, j.Average collection period. Based on these ratios, did Urban Outfitters financial performance improve, weaken, or remain about the same from 2016 to 2017?

Income Statement for Urban Outfitters Inc.

2016 2017

Net Sales (Total Revenue) $3,545,794 $3,445,134

Cost of Sales $2,301,181 $2,243,232

Selling, General, Administrative 906,086 848,323

Operating Income 338,527 352,579

Other Income   

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 Earnings per share 1.87 1.79

Diluted earnings per share 1.86 1.78

Consolidated Balance Sheets for Urban Outfitters

Jan. 31, 2017 Jan. 31, 2016

Assets

Current Assets

Cash and Cash Equivalents $248,140 $248,140

Short-term Investments 111,067 61,061

Receivables, net 54,505 75,723

Merchandise inventories 338,590 330,223

Prepaid expenses and other current assets 129,095 102,078

Total current assets 881,397 834,361

Net property and equipment 867,786 863,137

Deferred income taxes and other assets 153,454 135,803

Total Assets $1,902,637 $1,833,301

Liabilities and Shareholders Equity

Current Liabilities

Accounts payable $119,537 $118,035

Accrued salaries and benefits 58,782 41,474

Accrued expenses and Other current liabilities 174,609 169,722

Total current liabilities 352,928 329,231

long term debt 0 0

Deferred rent and other liabilities 236,625 216,843

Total Liabilities 589,553 696,074

Committments and Contingencies

Equity

Preferred Stock $0.001 par value; 10,000,000 shares

authorized; no shares issued and outstanding 0 0

COmmon stock $0.001 par value; 200,000,000 shares

authorized; 116,233,781 and 117,321,120 shares issued 12 12

Additional paid-in-capital $0 $0

Retained earnings 1,347,141 1,160,666

Total Stockholders' equity 1,313,084 1,137,227

Total Liabilities and Equity 1,902,637 1,833,301

Answer 1