In its annual report, WRS Athletic Supply, Inc. includes the following five- year financial summary.

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 ofdividends.

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WRS ATHLETIC SUPPLY, INC. Five-Year Finanial 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 3165,013 $137,634 Net Sales Increase 12% 14% 16% 20% 17% Domestic Comparative Store Sales Increase Other Income-Net Cost of Goods Sold 5% 5% 5% 8% 9% 2,001 ,873 ,77 5 1391 191,838 71,562 150,255 129,664 108,725 Operating, Selling, and General and Administrative Expenses 41,236 36,356 39 27,408 22,516 Interest Interest Expense (1,063) 1,357 383 1045 (803) 189 4,4873,897 3,69 3,338 2,740 8,039 6,67 6,295 5,377 4,430 188 204 Interest Income Income Tax Expense Net Income Per Share of Common Stock 138 Net Income 1.81 1.49 1.41 1.21 0.99 0.28 0.20 0.16 Dividends Financial Position Current Assets, Excluding Merchandise Inventory Merchandise Inventory at LIFO Cost Property, Plant, and Equipment, Net Total Assets Current Liabilities Long-term Debt Shareholders Equity Financial Ratios Acid-test Ratio Rate of Return on Total Assets Rate of Return on Shareholders' Equity 0.30 0.24 $ 30,483 27,878 $ 26,555 24,356 21,132 24,89 2,614 21,442 19,793 17,076 $16,497 51,904 45,750 40,934 35,969 25,973 94,685 83,527 78,130 70,349 49,996 32,617 27,282 28,949 25,803 16,762 22,73 21,14783 18,712 2,122 39,337 35,12 31343 25,834 21,112 0.9 10.2% 21.6% 0.9 0.9 1.3 9.9% 10.3% 10.7% 9.6 20.1% 22.0% 22.9% 22.4%