A spreadsheet containing financial statements for Men’s Wearhouse, Inc., for fiscal years 2006–2010 is available for download from McGraw-Hill’s Connect or your course instructor. 

	MEN'S WEARHOUSE INC.
	BALANCE SHEET ($ millions)
		2006	2007	2008	2009	2010
	ASSETS
	Cash & Short-Term Investments	263.001	179.694	99.367	104.533	186.018
	Net Receivables	19.276	17.018	24.872	40.662	16.745
	Inventories	416.603	448.586	492.423	440.099	431.492
	Prepaid Expenses	0.000	0.000	27.179	26.603	0.000
	Other Current Assets	30.732	35.531	27.154	19.718	74.075
	Total Current Assets	729.612	680.829	670.995	631.615	708.330
	Gross Plant, Property & Equipment	611.957	669.340	865.084	885.981	866.005
	Accumulated Depreciation	342.371	379.700	454.917	498.509	521.259
	Net Plant, Property & Equipment	269.586	289.640	410.167	387.472	344.746
	Intangibles	63.073	61.765	75.609	65.268	59.414
	Other Assets	61.003	64.718	99.696	103.375	119.616
	TOTAL ASSETS	1,123.274	1,096.952	1,256.467	1,187.730	1,232.106
	LIABILITIES
	Long Term Debt Due In One Year	0.000	0.000	0.000	0.000	0.000
	Accounts Payable	125.064	111.213	146.713	108.800	83.052
	Taxes Payable	21.086	19.676	5.590	0.019	23.936
	Accrued Expenses	72.531	75.458	70.222	66.542	0.000
	Other Current Liabilities	19.404	19.791	54.730	44.862	117.047
	Total Current Liabilities	238.085	226.138	277.255	220.223	224.035
	Long Term Debt	207.750	72.967	92.399	62.916	43.491
	Deferred Taxes	24.400	12.200	4.000	2.700	0.000
	Other Liabilities	25.506	31.875	66.876	59.743	62.236
	TOTAL LIABILITIES	495.741	343.180	440.530	345.582	329.762
	EQUITY
	Common Stock	0.671	0.691	0.696	0.700	0.705
	Capital Surplus	255.214	286.120	305.209	315.404	327.742
	Retained Earnings	641.558	775.857	923.713	938.580	986.523
	Less: Treasury Stock	269.910	308.896	413.681	412.536	412.626
	TOTAL EQUITY	627.533	753.772	815.937	842.148	902.344
	TOTAL LIABILITIES & EQUITY	1,123.274	1,096.952	1,256.467	1,187.730	1,232.106
	Common Shares Outstanding	53.069	53.919	51.479	51.918	52.288
	INCOME STATEMENT ($ millions, except per share)
		2006	2007	2008	2009	2010
	Sales	1,724.898	1,882.064	2,112.558	1,972.418	1,909.575
	Cost of Goods Sold	965.889	1,004.972	1,062.205	1,031.241	1,025.759
	Gross Profit	759.009	877.092	1,050.353	941.177	883.816
	Selling, General, & Administrative Exp.	531.839	591.767	741.405	757.073	732.722
	Operating Income Before Deprec.	227.170	285.325	308.948	184.104	151.094
	Depreciation, Depletion, & Amortization	61.874	61.387	80.296	90.665	86.090
	Operating Profit	165.296	223.938	228.652	93.439	65.004
	Interest Expense	5.888	9.216	5.046	4.300	0.332
	Non-Operating Income/Expense	3.280	9.786	5.987	2.592	0.000
	Special Items	0.000	0.000	0.000	(2.968)	3.200
	Pretax Income	162.688	224.508	229.593	88.763	67.872
	Total Income Taxes	58.785	75.933	82.552	29.919	22.364
	Income Before Extraordinary
	Items & Discontinued Operations	103.903	148.575	147.041	58.844	45.508
	Savings Due to Common Stock Equiv.	0.000	0.000	0.000	0.000	(0.834)
	Adjusted Net Income	103.903	148.575	147.041	58.844	44.674
	EPS Basic from Operations	2.010	2.710	2.760	1.180	0.820
	EPS Diluted from Operations	1.950	2.620	2.730	1.170	0.820
	Dividends Per Share	0.000	0.200	0.230	0.280	0.280
	Com Shares for Basic EPS	53.753	53.111	53.258	51.645	52.280
	Com Shares for Diluted EPS	55.365	54.749	53.890	51.944	52.280

a. Use the spreadsheet to calculate as many of the company’s profitability, turnover-control, and leverage and liquidity ratios as you can for these years (see Table 2.4).

b. What do these ratios suggest about the company’s performance over this period? 15. To answer the

Table 2.4

Transcribed Image Text:

Profitablity Ratlos Return on equlty Return on assets Net income/Shareholders' equity Net income/Assets Earnings before interest and taxes x (1 – Tax rate) Interest-bearing debt + Shareholders' equity - Net Income/Sales = Gross profit/Sales = Price per share/Earnings per share Return on invested capital Profit margin Gross margin Price to earnings Turnover-Control Ratios = Sales/Assets = Sales/Net property, plant, and equipment Cost of goods sold/Ending inventory Accounts receivable/Credit sales per day (If credit sales unavailable, use sales) Cash and securities/Sales per day = Accounts payable/Credit purchases per day (If purchases unavailable, use cost of goods sold) Asset turnover Fixed-asset turnover Inventory turnover Collection period Days' sales in cash Payables period Leverage and Liquldity Ratios Assets to equlty Assets/Shareholders' equity Total liabilities/Assets (Interest-bearing debt is often substituted for total liabilities) Total liabilities/Shareholders' equity Earnings before interest and taxes/Interest expense Debt to assets Debt to equity Times interest earned Earnings before interest and taxes Times burden covered Interest exp. + Prin. pay./(1– Tax rate) Total liabilities Debt to assets (market value) No. equity shares x Price/share + Total liabilities Total liabilities Debt to equity (market value) No. equity shares x Price/share Current ratio Current assets/Current liabilities Current assets – Inventory Acid test Current liabilities I|||