On pages 700–702 are three comparative financial statements for lululemon athletica inc., as shown in its 2012 Form 10-K. The 2012 fiscal year ends on February 3, 2013, and the 2011 fiscal year ends on January 29, 2012.
Required
1. Compute the following ratios for the years ended February 3, 2013, and January 29, 2012, or as of the end of those two years, as appropriate. Beginning balances for the year ended January 29, 2012, are not available; that is, you do not have a balance sheet as of January 30, 2011. Therefore, to be consistent, use year-end balances for both years where you would normally use average amounts for the year. Finally, note that the company does not report interest expense separately on its income statement. Ignore any interest expense in computing the return on assets ratio.
a. Current ratio
b. Quick ratio
c. Cash flow from operations to current liabilities ratio
d. Number of days’ sales in receivables e. Number of days’ sales in inventory
f. Return on assets ratio
g. Return on common stockholders’ equity ratio
2. Comment on lululemon’s liquidity. Has it improved or declined over the two-year period?
3. Comment on lululemon’s profitability. Would you buy stock in the company? Why or why not?