Just for feet
Just for Feet, Case Study
Just for Feet, Case Study
1.
Balance Sheets
Just for FEET, Inc. |
Balance Sheet |
Years ending Jan 31st |
| | |
Current Assets: 1996 1997 1998 |
Cash & Equivalents | 36.93% | 18.40% | 1.80% |
Marketable Securities AFS | 9.04% | 0.00% | 0.00% |
Accounts Receivable | 1.74% | 3.53% | 2.74% |
Inventory | 35.47% | 45.97% | 58.01% |
Other Current Assets | 0.56% | 1.50% | 2.65% |
Total Current Assets | 83.75% | 69.40% | 65.20% |
Property & Equipment, net | 14.61% | 21.08% | 23.29% |
Goodwill, net | 0.00% | 8.05% | 10.31% |
Other | 1.64% | 1.46% | 1.19% |
Total Assets | 100.00% | 100.00% | 100.00% |
Current Liabilities: |
Short-Term Borrowings | 26.61% | 20.22% | 0.00% |
Accounts Payable | 10.35% | 11.41% | 14.55% |
Accrued Expenses | 1.46% | 2.07% | 3.60% |
Income Taxes Payable | 0.11% | 0.30% | 0.13% |
Current Maturities of LT Debt | 0.56% | 0.72% | 0.96% |
Total Current Liabilities | 39.09% | 34.73% | 19.25% |
LT Debt & Obligations | 2.76% | 5.48% | 33.51% |
Total Liabilities | 41.85% | 40.21% | 52.75% |
Shareholders' Equity: |
Common Stock | 0.00% | 0.00% | 0.00% |
Paid-In Capital | 50.69% | 48.76% | 36.20% |
Retained Earnings | 7.47% | 11.03% | 11.04% |
Total Shareholders' Equity | 58.15% | 59.79% | 47.25% |
Total Liabilities & SH' Equity | 100.00% | 100.00% | 100.00% |
Based on the information given in the case, there are multiple high-risk financial statement items for the 1998 audit of Just for FEET, specifically regarding account balances and presentations and disclosures. Notably, inventory valuation, which increased from 35.47% of total assets in 1996 to 58.01% in 1998, and the accuracy and allocation of vendor allowances were marked as the highest risk areas. With FEET's use of creative accounting, accuracy and classification of transactions/events must be monitored as well. While the
Just for Feet, Case Study
1.
Balance Sheets
Just for FEET, Inc. |
Balance Sheet |
Years ending Jan 31st |
| | |
Current Assets: 1996 1997 1998 |
Cash & Equivalents | 36.93% | 18.40% | 1.80% |
Marketable Securities AFS | 9.04% | 0.00% | 0.00% |
Accounts Receivable | 1.74% | 3.53% | 2.74% |
Inventory | 35.47% | 45.97% | 58.01% |
Other Current Assets | 0.56% | 1.50% | 2.65% |
Total Current Assets | 83.75% | 69.40% | 65.20% |
Property & Equipment, net | 14.61% | 21.08% | 23.29% |
Goodwill, net | 0.00% | 8.05% | 10.31% |
Other | 1.64% | 1.46% | 1.19% |
Total Assets | 100.00% | 100.00% | 100.00% |
Current Liabilities: |
Short-Term Borrowings | 26.61% | 20.22% | 0.00% |
Accounts Payable | 10.35% | 11.41% | 14.55% |
Accrued Expenses | 1.46% | 2.07% | 3.60% |
Income Taxes Payable | 0.11% | 0.30% | 0.13% |
Current Maturities of LT Debt | 0.56% | 0.72% | 0.96% |
Total Current Liabilities | 39.09% | 34.73% | 19.25% |
LT Debt & Obligations | 2.76% | 5.48% | 33.51% |
Total Liabilities | 41.85% | 40.21% | 52.75% |
Shareholders' Equity: |
Common Stock | 0.00% | 0.00% | 0.00% |
Paid-In Capital | 50.69% | 48.76% | 36.20% |
Retained Earnings | 7.47% | 11.03% | 11.04% |
Total Shareholders' Equity | 58.15% | 59.79% | 47.25% |
Total Liabilities & SH' Equity | 100.00% | 100.00% | 100.00% |
Based on the information given in the case, there are multiple high-risk financial statement items for the 1998 audit of Just for FEET, specifically regarding account balances and presentations and disclosures. Notably, inventory valuation, which increased from 35.47% of total assets in 1996 to 58.01% in 1998, and the accuracy and allocation of vendor allowances were marked as the highest risk areas. With FEET's use of creative accounting, accuracy and classification of transactions/events must be monitored as well. While the