Go to www.columbia.com to find Columbia Sportswear ’s home page. Under the About Us menu near the bottom of the page, select Investor Relations. Then select Financial Information and click on the most recent annual report. You may also select the most recent Form 10-K.
Answer the following questions:
1. Name one item on Columbia Sportswear’s balance sheet that most likely represents unexpired (prepaid) costs. Name one item that most likely represents the accrual of unrecorded expenses.
2. Does Columbia Sportswear prepare a single- or multiple-step income statement? How can you tell?
3. Determine Columbia Sportswear’s gross profit percentage for the past 2 years. Is the change favorable? What does Columbia Sportswear’s management say about the change? If nothing was said, why do you think management chose not to comment? How do you think management determines the reason that gross profit changed, given the condensed nature of the income statement?
4. Calculate Columbia Sportswear’s current ratio for the past 2 years. Did this ratio improve or decline? Does management offer any comment about any particular problems that could have affected this ratio? Should management be concerned about changes in the current ratio?
5. Where can you find evidence in Columbia Sportswear’s annual report that the financial statements were prepared using U.S. GAAP?