rRerHENSIVE PROBLEM > Comprehensive Problem for Appendix D Analyzing a company for its investment potential In its annual report, WRM Achletic Supply, Inc. indudes the following five-year financial summary WRM ATHLETIC SUPPLY, INC. Five- Year Financial Summary (Partial; adapted 2020 (Dollar amounts in thousands except per share dato) Net Sales Net Sales Increase Domestic Comparative Store Sales Increase Other Income-Net Cost of Goods Sold Selling and Administrative Expenses 2019 2018 2017 2016 2015 290,000 215,000 $ 194,000 $ 165,000 $139,000 35% 5% 11% 18% 19% 17% 10% 2,050 1,8101,790 1,660 1.300 218,660 163,400 150,350 129,360110,227 41,236 36,356 31.67927,40822,516 Interest Expense (1,010) (1,360) (1,370) (1,060) (870 Interest Income Income Tax Expense Net Income Per Share of Common Stock: 120 160 165 225 155 4,430 3,830 3,690 3,380 2,760 26,83412,024 8,866 5,6774.082 Net Income 1.80 1.50 1.40 1.200.98 0.40 0.38 0.34 0.30 0.26 Financial Position Current Assets, Excluding Merchandise Inventory Merchandise Inventory at LIFO Cost Property, Plant, and Equipment, Net Total Assets Current Liabilities Long-term Debt tockholders Equity inancial Ratios cid-Test Ratio ate of Return on Total Assets ate of Return on Common Stockholders' Equity 30,400 s 27,500 26,200 $ 24,900 s 21,700 24,200 22,500 21,400 19.900 17,100 $ 16,400 51,100 45,600 40,700 35,200 25,900 05,700 95,600 88,300 80,000 64,700 32,200 27,100 28,700 25,800 16,700 22,600 21,700 17,100 18,300 12,600 50,900 46,800 42,500 35,900 35,400 0.9 27.7% 54.9% 14.6% 26.9% 0.9 12.2% 22.6% 9.3% 15.9% 83% 15.4% Requirements Analyze the company's financial summary for the fiscal years 2016-2020 to decide whether to invest in the common stock of WRM. Include the following sections in your analysis, and fully explain your final decision. a. Trend analysis for net sales and net income (use 2016 as the base year). b. Profitability analysis. c. Evaluation of the ability to sell merchandise inventory (WRM uses the LIFO 1. method) d. Evaluation of the ability to pay debts. e. Evaluation of dividends