The following condensed financial information is available for lululemon athletica inc.

Instructions

a. Perform a horizontal percent of base year analysis of lululemon?s income statement and balance sheet, assuming 2015 is the base year.

b. Using the analyses you prepared in part (a), identify any significant changes between 2015 and 2018.

c. Which do you think would be more useful?a percent of base year amount or calculating the percentage change between periods?to analyze lululemon between 2015 and 2018? Explain.

Taking It Further

If the operating expenses for lululemon are increasing at a faster rate than revenues, what are some of the things lululemon should consider to turn this trend around?

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lululemon athletica inc. Income Statement Fiscal Year Ended (in millions) 2018 2017 2016 2015 $2,649 1,250 Revenue $2,344 $2,060 $1,797 Cost of goods sold 1,145 1,063 883 Gross profit Other expenses 1,399 1,199 997 914 939 777 629 531 Profit before income taxes 460 422 368 383 Income tax expense 201 119 102 144 Profit $ 259 $ 303 $ 266 $ 239 lululemon athletica inc. Balance Sheet (in millions) Assets Jan. 28, Jan. 29, Jan. 31, Feb. 1. 2018 2017 2016 2015 Current assets $1,436 $1,163 $ 917 $ 951 Non-current assets 562 495 397 345 Total assets $1,998 $1,658 $1,314 $1,296 Liabilities and Shareholders' Equity Current liabilities Non-current liabilities $ 293 $ 242 $ 226 $ 160 108 56 61 47 Total liabilities 401 298 287 207 Shareholders' equity 1,597 1,360 1,027 1,089 Total liabilities and shareholders' equity $1,998 $1,658 $1,314 $1,296