MBA6014 Unit2 CP3-2 -- Finding Financial Information LO3-2, 3-4, 3-6

CP3-2 Finding Financial Information LO3-2, 3-4, 3-6

Refer to the financial statements of Urban Outfitters in Appendix C at the end of the book.
Required:

1. What is the company's revenue recognition policy? (Hint: Look in the notes to the financial statements.)

2. Assuming that $50 million of cost of sales was due to noninventory purchase expenses (distribution and occupancy costs), how much inventory did the company buy during the year? (Hint: Use a T-account of inventory to infer how much was purchased.)

	INVENTORY (in thousands)

Inventory purchased during the year:

3. Calculate selling, general, and administrative expenses as a percent of sales for each year presented. (Dollars in thousands.)

Year Ended	SG&A Expenses /	Net Sales Revenue	= Percentage
2012
2011
2010

By what percent did these expenses increase or decrease from fiscal years ended 2011 and 2012 and between 2010 and 2011? (Hint: Percentage Change = [Current Year Amount − Prior Year Amount]/Prior Year Amount.)

		% Change	Incr. or Decr.
Between years ended 2011 and 2012:
Between years ended 2010 and 2011:

4. Compute the company's net profit margin for each year presented. (Dollars in thousands.)

Fiscal Year Ended	Net Income /	Net Sales (or Operating) Revenues	= Net Profit Margin Ratio
2012			7.5%
2011
2010

Explain net profit margin ratio and discuss the results shown above.

TUTORIAL PREVIEW

3. Calculate selling, general, and administrative expenses as a percent of sales for each year presented. (Dollars in thousands.)

Year Ended	SG&A Expenses /	Net Sales Revenue	= Percentage
2012	$                       575,811	$                 2,473,801	23.3%

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