CP3-2 Finding Financial Information LO3-2, 3-4, 3-6
Refer to the financial statements of Urban Outfitters in Appendix C at the end of the book.
Required:
1. What is the company’s revenue recognition policy? (Hint: Look in the notes to the financial statements.)
2. Assuming that $50 million of cost of sales was due to noninventory purchase expenses (distribution and occupancy costs), how much inventory did the company buy during the year? (Hint: Use a T-account of inventory to infer how much was purchased.)
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INVENTORY (in thousands) |
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Inventory purchased during the year: |
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3. Calculate selling, general, and administrative expenses as a percent of sales for each year presented. (Dollars in thousands.)
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Year Ended |
SG&A Expenses / |
Net Sales Revenue |
= Percentage |
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2012 |
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2011 |
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2010 |
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By what percent did these expenses increase or decrease from fiscal years ended 2011 and 2012 and between 2010 and 2011? (Hint: Percentage Change = [Current Year Amount − Prior Year Amount]/Prior Year Amount.)
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% Change |
Incr. or Decr. |
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Between years ended 2011 and 2012: |
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Between years ended 2010 and 2011: |
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4. Compute the company’s net profit margin for each year presented. (Dollars in thousands.)
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Fiscal Year Ended |
Net Income / |
Net Sales (or Operating) Revenues |
= Net Profit Margin Ratio |
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2012 |
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7.5% |
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2011 |
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2010 |
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Explain net profit margin ratio and discuss the results shown above.
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