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The following are three comparative financial statements for lululemon athletica

ID: 2584900 • Letter: T

Question

The following are three comparative financial statements for lululemon athletica inc., as shown in its 2014 Form 10-K. The 2014 fiscal year ends on February 1, 2015, and the 2013 fiscal year ends on February 2, 2014.

lululemon athletica inc.

Consolidated Balance Sheets

(Amounts in thousands, except per share amounts)

1

February 1, 2015

February 2, 2014

2

ASSETS

3

Current assets

4

Cash and cash equivalents

$664,479.00

$698,649.00

5

Accounts receivable

13,746.00

11,903.00

6

Inventories

208,116.00

188,790.00

7

Prepaid expenses and other current assets

64,671.00

46,197.00

8

951,012.00

945,539.00

9

Property and equipment, net

296,008.00

255,603.00

10

Goodwill and intangible assets, net

26,163.00

28,201.00

11

Deferred income tax asset

16,018.00

18,300.00

12

Other non-current assets

7,012.00

4,745.00

13

$1,296,213.00

$1,252,388.00

14

LIABILITIES AND STOCKHOLDERS’ EQUITY

15

Current liabilities

16

Accounts payable

$9,339.00

$12,647.00

17

Accrued inventory liabilities

22,296.00

15,415.00

18

Accrued compensation and related expenses

29,932.00

19,445.00

19

Income taxes payable

20,073.00

769.00

20

Unredeemed gift card liability

46,252.00

38,343.00

21

Other accrued liabilities

31,989.00

29,595.00

22

159,881.00

116,214.00

23

Deferred income tax liability

3,633.00

3,977.00

24

Other non-current liabilities

43,131.00

35,515.00

25

206,645.00

155,706.00

26

Stockholders’ equity

27

Undesignated preferred stock, $0.01 par value, 5,000 shares authorized, none issued and outstanding

28

Exchangeable stock, no par value, 60,000 shares authorized, issued and outstanding 9,833 and 29,955

29

Special voting stock, $0.000005 par value, 60,000 shares authorized, issued and outstanding 9,833 and 29,955

30

Common stock, $0.005 par value, 400,000 shares authorized, issued and outstanding 132,112 and 115,342

661.00

577.00

31

Additional paid-in capital

241,695.00

240,351.00

32

Retained earnings

1,020,619.00

923,822.00

33

Accumulated other comprehensive loss

(173,407.00)

(68,068.00)

34

1,089,568.00

1,096,682.00

35

$1,296,213.00

$1,252,388.00

lululemon athletica inc.

Consolidated Statements of Operations and Comprehensive Income

(Amounts in thousands, except per share amounts) Fiscal Year Ended

1

February 1, 2015

February 2, 2014

February 3, 2013

2

Net revenue

$1,797,213.00

$1,591,188.00

$1,370,358.00

3

Cost of goods sold

883,033.00

751,112.00

607,532.00

4

Gross profit

914,180.00

840,076.00

762,826.00

5

Selling, general and administrative expenses

538,147.00

448,718.00

386,387.00

6

Income from operations

376,033.00

391,358.00

376,439.00

7

Other income (expense), net

7,102.00

5,768.00

4,957.00

8

Income before provision for income taxes

383,135.00

397,126.00

381,396.00

9

Provision for income taxes

144,102.00

117,579.00

109,965.00

10

Net income

239,033.00

279,547.00

271,431.00

11

Net income attributable to non-controlling interest

0.00

0.00

875.00

12

Net income attributable to lululemon athletica inc.

$239,033.00

$279,547.00

$270,556.00

13

Other comprehensive (loss) income:

14

Foreign currency translation adjustment

(105,339.00)

(89,158.00)

(459.00)

15

Comprehensive income

$133,694.00

$190,389.00

$270,097.00

16

Basic earnings per share

$1.66

$1.93

$1.88

17

Diluted earnings per share

$1.66

$1.91

$1.85

18

Basic weighted-average number of shares outstanding

143,935.00

144,913.00

144,000.00

19

Diluted weighted-average number of shares outstanding

144,298.00

146,043.00

145,806.00

lululemon athletica inc.

Consolidated Statements of Cash Flows

(Amounts in thousands) Fiscal Year Ended

1

February 1, 2015

February 2, 2014

February 3, 2013

2

Cash flows from operating activities

3

Net income

$239,033.00

$279,547.00

$271,431.00

4

Items not affecting cash

5

Depreciation and amortization

58,364.00

49,068.00

43,000.00

6

Stock-based compensation

8,269.00

10,087.00

15,637.00

7

Derecognition of unredeemed gift card liability

(1,468.00)

(4,654.00)

(1,351.00)

8

Deferred income taxes

2,087.00

820.00

(6,445.00)

9

Excess tax benefits from stock-based compensation

(413.00)

(6,457.00)

(9,901.00)

10

Other, including net changes in other non-cash balances

11

Prepaid tax installments

(15,234.00)

3,067.00

(7,812.00)

12

Other prepaid expenses and other current assets

(8,813.00)

(14,408.00)

(10,492.00)

13

Inventories

(26,806.00)

(38,507.00)

(51,222.00)

14

Accounts payable

(2,198.00)

11,627.00

(13,481.00)

15

Accrued inventory liabilities

8,276.00

6,985.00

(1,785.00)

16

Other accrued liabilities

3,271.00

7,837.00

1,777.00

17

Sales tax collected

517.00

161.00

(4,232.00)

18

Income taxes payable

19,304.00

(35,075.00)

30,951.00

19

Accrued compensation and related expenses

11,561.00

(6,282.00)

4,695.00

20

Deferred gift card revenue

11,326.00

9,306.00

13,711.00

21

Other non-cash balances

7,373.00

5,217.00

5,632.00

22

Net cash provided by operating activities

314,449.00

278,339.00

280,113.00

23

Cash flows from investing activities

24

Purchase of property and equipment

(119,733.00)

(106,408.00)

(93,229.00)

25

Net cash used in investing activities

(119,733.00)

(106,408.00)

(93,229.00)

26

Cash flows from financing activities

27

Proceeds from exercise of stock options

2,913.00

8,171.00

11,014.00

28

Excess tax benefits from stock-based compensation

413.00

6,457.00

9,901.00

29

Registration fees associated with shelf registration statement

0.00

0.00

(393.00)

30

Purchase of non-controlling interest

0.00

0.00

(26,013.00)

31

Taxes paid related to net share settlement of equity awards

(4,972.00)

(5,721.00)

0.00

32

Repurchase of common stock

(147,431.00)

0.00

0.00

33

Net cash (used in) provided by financing activities

(149,077.00)

8,907.00

(5,491.00)

34

Effect of exchange rate changes on cash

(79,809.00)

(72,368.00)

(651.00)

35

(Decrease) increase in cash and cash equivalents

(34,170.00)

108,470.00

180,742.00

36

Cash and cash equivalents, beginning of period

$698,649.00

$590,179.00

$409,437.00

37

Cash and cash equivalents, end of period

$664,479.00

$698,649.00

$590,179.00

Required:

lululemon athletica inc.

Consolidated Balance Sheets

(Amounts in thousands, except per share amounts)

Explanation / Answer

2015

Current Ratio=Current Assets/Current Liabilities

= 951012/159881=5.94

2014

Current Ratio= Current Assets/Current Liabilities

=1252388/155706=8.04

B.Quick ratio 2015=quick Assets/Current Liabilities

=664479+13746/159881=4.24

Quick Ratio2014=quick Assets/Current Liabilities

=698649+11903/155706=4.56

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