Case 1.3 Just for Feet, Inc.

Topics: Generally Accepted Accounting Principles, Balance sheet, Revenue Pages: 3 (642 words) Published: October 10, 2012
CASE 1.3Just for FEET, Inc.
1.(1) Common-sized Balance Sheet
Current assets:
Cash and cash equivalents 2%18%37%
Marketable securities available for sale --9%
Accounts receivable3%4%2%
Other current assets3%1%1%
Total current assets65%69%84%
Property and equipment, net23%21%15%
Goodwill, net10%8%-
Total assets100%100%100%
Current liabilities:
Short-term borrowings-
Accounts payable28%28%25%
Accrued expenses7%5%3%
Income taxes payable0%1%0%
Current maturities of long-term debt2%2%1%
Total current liabilities36%86%93%
Long-term debt and obligations64%16%7%
Total liabilities100%100%100%
Shareholders' equity
Common stock0%0%0%
Paid-in capital77%82%87%
Retained earnings23%18%13%
Total shareholders' equity100%100%100%
Total liabilities and shareholders' equity

(2) Common-sized Statements of Earnings
Net sales100.00%100.00%100.00%
Cost of sales58.38%58.46%57.54%
Gross profit41.62%41.54%42.46%
Other revenues0.17%0.23%0.23%
Operating expenses
Store operating30.01%29.18%27.04%
Store opening costs1.76%1.41%4.38%
Amortization of intangibles0.27%0.25%0.07%
General and administrative3.14%3.77%3.07%
Total operating expenses35.18%34.60%34.57%
Operating income6.61%7.17%8.12%
Interest expense-1.04%-0.30%-0.32%
Interest income0.02%0.29%1.85%
Earnings before income taxes
and cumulative effect of change in accounting principle5.59%7.15%9.65% Provision for income taxes2.15%2.68%3.43%
Earnings before cumulative effect
of a change in accounting principle3.44%4.47%6.22%
Cumulative effect on prior years of change in accounting principle---0.80% Net earnings3.44%4.47%5.43%

(3) Key ratios:...
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