Attached are financial statements from the 2016 Annual Report of Five Below, Inc.
1. Calculate the company's working capital, current ratio, and acid test ratio at January 30, 2016 and January 31, 2015. Round to 2 decimal places.
2. Based on the results of your analysis above, assess the company's overall liquidity position. Explain which ratios indicate particular strengths and/or weaknesses. Assume the following industry averages for 2016 and 2015 respectively: Current ratio = 2.4 and 2.1; Acid-test ratio = 0.8 and 0.6.
3. Explain how working capital and the current ratio are related. Would you expect firms with large amounts of working capital to always have high current ratios?
4. Calculate ROI for January 30, 2016 and January 31, 2015.Round to 1 decimal place. (Total assets at 2/01/14 amounted to $232,054 in thousands).
5. Calculate ROE for January 30, 2016 and January 31, 2015.Round to 1 decimal place. (Total stockholders' equity at 2/01/14 amounted to $116,873in thousands)
6. Calculate the price to earnings ratio for2016 and 2015. Market price per share was $35.23 at 01/30/16 and $33.32 at 01/31/15. Round to 1 decimal place.
7. Calculate the gross profit ratios for 2016, 2015, and 2014. Round to 1 decimal place.
8. Calculate the operating profit ratios 2016, 2015, and 2014. Round to 1 decimal place.
9. Based on the results of your analysis above, assess the company's overall profitability and dividend policy. Explain which ratios indicate particular strengths and/or weaknesses within the company. Assume the following industry averages:
2016: ROI = 13.8%; ROE = 19.2%; P/E ratio = 24.6; Net Profit = 20.3%; Operating Profit = 8.7%
2015: ROI = 14.2%; ROE = 22.4%; P/E ratio = 22.9; Net Profit = 21.4%; Operating Profit = 8.6%
10. Calculate the debt ratio, at January 30, 2016 and January 31, 2015.Round to 2 decimal places.
11. Calculate the debt/equity ratio at January 30, 2016 and January 31, 2015.Round to 2 decimal places.
12. Based on the results of your analysis above, assess the company's overall leverage position. Assume the following industry averages for both years:
2016: debt ratio = .35 and debt/equity ratio = 0.80
2015: debt ratio = .39 and debt/equity ratio = 0.73. Defend your answer.
13. Calculate the inventory turnover and the number of days' sales in inventory (based on a 365-day year) for the year ended January 30, 2016 and January 31, 2015.Round to 1 decimal place. (Total inventories at 02/01/14 amounted to $89,377in thousands)
14. In your review of the consolidated statement of cash flows for January 30,2016, what are the 3 major sources (excluding Net income and depreciation & amortization) of cash provided and 3 major uses by Five Below, Inc.Use the column headed "2015".
15. Assume that you have $1,000 that you would like to invest in the common stockofa company. Evaluate the common stock of Five Below, Inc.as a potential investment. Would you buy the stock? From the data available on the attached financial statements, or items discussed in class, identify the three most important criteria that you would use to make your investment decision- defend your answer.
Attachment:- Assignment.rar