Group Problem Set 1: This problem Set is based on materials covered in modules 1 and 2. It is designed for you to demonstrate your understanding of basic financial statements, financial statement analysis, break-even concepts, financial and operating leverages. Before you start this assignment, please review Modules 1 and 2 materials thoroughly. Finance date of Adams Stores, Inc. for the year ending 2016 and 2017.

Part 2: Financial Statement Analysis A. Based on your financial statements (from Part 1), calculate the following ratios for the two years. Show all your calculations in good form. Show your formulas. If you use excel, each calculation need to show the excel formula Current ratio Quick ratio Inventory turnover (times) Average collection period (days) Total asset turnover (times) Debt ratio Times interest earned Gross profit margin Net profit margin Return on total assets Return on equity P/E ratio Return on equity using DuPont Analysis

B. Comments on the ratios by comparing 2016 to 2017 ratios.

C. Assume Adams Stores, Inc. is a retail company similar to Walmart, Myers, or Target. Compare 2017 ratios to the industry average. Please note that Adams Stores, Inc. is not a real company. To find comparable industry ratios, you need to search for industry ratios for retail. See information on Moodle for instructions on how to find industry ratios. Based on the industry average, how is Adams Stores, Inc. doing financially?

Items Sales Cash Other Expenses Retained Earnings Long-term debt Cost of goods sold Depreciation Short-term investments Fixed Assets Interest Expenses Shares outstanding (par value = $46.00) Market Price of stock Accounts Receivable Accounts payable Inventory Notes Payable Accumulated Depreciation Accruals Tax Rate 2016 $3,432,000 9,000 340,000 203,768 323,432 2,864,000 18,900 48,600 491,000 62,500 2017 $5,834,400 7,282 720,000 97,632 1,000,000 4,980,000 116,960 20,000 1,202,950 176,000 100,000 8.50 351,200 145,600 715,200 200,000 146,200 136,000 40% 100,000 6 632,160 324,000 1,287,360 720,000 263,160 284,960 40%