Let's look at Dick's Sporting Goods (Dick's) some more. Think about Dick's. Think about accountants reporting what Dick's has, where it got its money, and what it has been doing to create value. Is Dick's earning net income or loss? What resources did Dick's need to operate? Think about the business of Dick's.

Return to Dick's financial statements contained in its Annual Report (see the Continuing Financial Statement Analysis Problem in Chapter 2 for instructions on how to access the Annual Report). Go to page 44 where you will find Dick's income statement for the year ending January 31, 2015 (called the Consolidated Statement of Income).

Now answer the following questions:

1. Look at Dick's income statement. What are Dick's sales for the last two years? Are sales increasing or decreasing compared to the previous year?

2. Look at Dick's income statement. Dick's had 694 stores in at the end of 2014 (January 31, 2015) and 642 stores at the end of 2013 (February 1, 2014). What are Dick's sales per store in 2014 and 2013? (Divide total sales by the number of stores Dick's operated in that year.) Is sales per store increasing or decreasing?

3. Look at Dick's income statement. What is Dick's gross profit and gross profit percentage for the years ending January 31, 2015 and February 1, 2014? Is Dick's gross profit increasing or decreasing?

4. Look at footnote 1 of the financial statements (pages 49 through 52 of annual report). How is Dick's accounting for sales (revenue) and costs?

5. What is Dick's net income percentage for the years ending January 31, 2015 and February 1, 2014? Is Dick's net income percentage increasing or decreasing?

6. Looking back over your answers to question 1 through 5, how do you think Dick's is performing? What do you think is causing the changes in Dick's sales, costs, and margins?