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WRS Athletic Supply, Inc_Investment analysis

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Question;In its annual report, WRS Athletic Supply, Inc. includes the;following five-year financial summary.;WRS ATHLETIC SUPPLY, INC.;Five-Year Financial Summary (Partial, adapted);(Dollar amounts in thousands except per share data) 2018;2017 2016 2015 2014 2013;Net Sales $244,524 $217,799 $191,329 $165,013 $137,634;Net Sales Increase 12% 14% 16% 20% 17%;Domestic Comparative Store Sales Increase 5% 6% 5% 8% 9%;Other Income-Net 2,001 1,873 1,787 1,615 1,391;Cost of Goods Sold 191,838 171,562 150,255 129,664 108,725;Operating, Selling, and General and Administrative Expenses;41,236 36,356 31,679 27,408 22,516;Interest;Interest Expense (1,063) (1,357) (1,383) (1,045) (803);Interest Income 138 171 188 204 189;Income Tax Expense 4,487 3,897 3,692 3,338 2,740;Net Income 8,039 6,671 6,295 5,377 4,430;Per Share of Common Stock;Net Income 1.81 1.49 1.41 1.21 0.99;Dividends 0.30 0.28 0.24 0.20 0.16;Financial Position;Current Assets, Excluding Merchandise Inventory $ 30,483 $;27,878 $ 26,555 $ 24,356 $ 21,132;Merchandise Inventory at LIFO Cost 24,891 22,614 21,442;19,793 17,076 $16,497;Property, Plant, and Equipment, Net 51,904 45,750 40,934;35,969 25,973;Total Assets 94,685 83,527 78,130 70,349 49,996;Current Liabilities 32,617 27,282 28,949 25,803 16,762;Long-term Debt 22,731 21,143 17,838 18,712 12,122;Shareholders' Equity 39,337 35,102 31,343 25,834 21,112;Financial Ratios;Acid-test Ratio 0.9 1.0 0.9 0.9 1.3;Rate of Return on Total Assets 10.2% 9.9% 10.3% 10.7% 9.6%;Rate of Return on Shareholders' Equity 21.6% 20.1% 22.0%;22.9% 22.4%;Requirements;1. Analyze the company's financial summary for the fiscal;years 2014-2018 to decide whether to invest in the common stock of WRS. Include;the following sections in your analysis, and fully explain your final decision.;1. Trend analysis for net sales and net income (use 2014 as;the base year).;2. Profitability analysis.;3. Evaluation of the ability to sell merchandise inventory;(WRS uses the LIFO method).;4. Evaluation of the ability to pay debts.;5. Evaluation of dividends.

 

Paper#37472 | Written in 18-Jul-2015

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