• February 7th, 2017

CP3-2 Finding Financial Information.

Paper , Order, or Assignment Requirements

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.)
INVENTORY (in thousands)

Inventory purchased during the year:

3. Calculate selling, general, and administrative expenses as a percent of sales for each year presented. (Dollars in thousands.)
Year Ended SG&A Expenses / Net Sales Revenue = Percentage
2012
2011
2010

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.)
% Change Incr. or Decr.
Between years ended 2011 and 2012:
Between years ended 2010 and 2011:

4. Compute the company’s net profit margin for each year presented. (Dollars in thousands.)
Fiscal Year Ended Net Income / Net Sales (or Operating) Revenues = Net Profit Margin Ratio
2012 7.5%
2011
2010

Explain net profit margin ratio and discuss the results shown above.

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