Let’s think about Dick’s Sporting Goods (Dick’s) again. 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 40 where you will find Dick’s income statement for the year ending January 28, 2017 (called the Consolidated Statement of Income). On page 42, you’ll find Dick’s balance sheet as of January 28, 2017. On page 43, you’ll find Dick’s statement of retained earnings for the year ending January 28, 2017. It’s a part of Dick’s statement titled Consolidated Statements of Changes in Stockholders’ Equity.

Now answer the following questions:

1. Look at Dick’s income statement. Is Dick’s profitable? Does it have a positive net income or a negative net income (loss) for the year ending January 28, 2017? How does that compare with the previous year?

2. Look at Dick’s statement of retained earnings, found in its Consolidated Statements of Changes in Stockholders’ Equity. How does Dick’s net income flow into its balance sheet?

3. Look at Dick’s balance sheet. What assets does Dick’s own? How much has Dick’s invested in each type of asset and in total assets?

4. Look at Dick’s balance sheet. How does Dick’s finance its assets? How much liabilities and shareholders’ equity does Dick’s have?