21. Comprehensive Financial Statement Analysis

(LO 1, 2, 3, 4) Using Exhibit 12.9 as a guide, compare C&C Sports' performance to the industry averages. What particular observations and recommendations do you have for George Douglas, president of C&C Sports?

	2014	2013	2012	2011	2010
Select Common-Size Percentages:1
Cash & equivalents	9.6%	7.2%	7.9%	8.0%	8.4%
Trade receivables, net	25.7%	24.3%	25.0%	23.1%	22.0%
Inventory	36.7%	41.0%	40.5%	41.2%	41.2%
Property and equipment	11.9%	13.2%	10.7%	11.1%	13.3%
Short-term debt	13.4%	14.3%	13.7%	13.5%	16.2%
Trade payables	16.8%	17.1%	17.1%	17.5%	15.2%
Long-term debt	6.9%	11.8%	9.6%	10.1%	12.2%
Stockholders' equity	42.3%	35.2%	40.3%	39.7%	33.2%
Gross profit	34.9%	35.2%	37.6%	37.7%	36.3%
Operating expenses	29.8%	30.9%	31.3%	31.4%	32.0%
Operating income	5.1%	4.3%	6.3%	6.3%	4.3%
Income before taxes	4.3%	3.3%	5.7%	5.7%	3.8%
Select Ratios:	2014	2013	2012	2011	2010
Current ratio	2.0	2.0	1.8	1.8	1.8
Quick ratio (Acid test)	.7	.7	.7	.7	1.0
Average collection period	38 days	37 days	36 days	38 days	38 days
Inventory turnover	4.1 times	3.5 times	3.9 times	3.5 times	4.1 times
Debt-to-equity	1.2	1.8	1.4	1.8	1.3
Return on assets2	5.5%	6.9%	9.1%	7.9%	9.3%
Return on stockholders' equity2	15.8%	18.6%	28.1%	18.9%	24.0%

¹Risk Management Association's 2013/2014 Annual Statement Studies: Financial Ratio Benchmarks, NCAIS 315280.²Based on income before taxes rather than net income.

EXHIBIT 12.9C&C sports industry data