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Just For Feet Case 1 Balance sheet Assets Current Assets Cash and Equivalents Accts.

Receivable Merchandise Inventory Other Total Property and equipment Goodwill, net Other Total Assets Liabilites and Equity Liabilites and net worth Current Liabilities Short Term borrowings Accounts Payable Accured Expenses income Taxes Deffered income Taxes Current Maturities Total Current Liabilites Long term Olbligations Deffered Lease rentals Deffered income Taxes Total Long term Liabilities Total Shareholders equity Common Stock Paid-in capital Retained earning Total Shareholders equity Total liabilities and equity Statement of Earnings Net Sales Cost of Sales Gross Profit Franchise Fee, royalties 3.000 249,590.000 76,113.000 325,706.000 689,396.000 Fiscal 1998 774,863.000 452,330.000 322,533.000 1,299.000 3.000 218,616.000 49,465.000 268,084.000 448,352.000 Fiscal 1997 478,638.000 279,816.000 198,822.000 1,101.000 902.000 6,639.000 132,692.000 216,203.000 13,162.000 1,633.000 230,998.000 363,690.000 3,222.000 155,706.000 16,646.000 7,212.000 704.000 24,562.000 180,268.000 100,322.000 24,829.000 90,667.000 51,162.000 9,292.000 1,363.000 12,412.000 18,875.000 399,901.000 18,302.000 449,490.000 160,592.000 71,084.000 8,230.000 689,396.000 82,490.000 15,840.000 206,128.000 6,709.000 311,167.000 94,529.000 36,106.000 6,550.000 448,352.000 34,728.000 34,364.000

Operating Expense Store Operating cost Store opening cost Amortization of intangibles General and admin. Total operating Expense Operating income Interest Expense Interest income EBIT Provision for income tax Net earnings Shares outstanding Diluted Statement of Cash Flows Net Earnings Depreciation and amortizatiom Deferred income taxes Deffered Lease rentals Change in assets and liablities Accts. Receivable Merchandise Inventory Other Assets Accounts Payable Accured Expenses Income Taxes Net Cash used by operating activites Net cash used for investing activites Net cash provided by financing activites 2,795.000 170,169.000 8,228.000 34,638.000 7,133.000 181.000 -82,070.000 79,183.000 91,175.000 8,918.000 56,616.000 5,643.000 7,495.000 2,264.000 543.000 -26,384.000 32,067.000 2,156.000 -56,295.000 232,505.000 13,669.000 2,072.000 24,341.000 272,587.000 51,245.000 8,059.000 143.000 43,329.000 16,681.000 26,648.000 30,737.000 31,852.000 Fiscal 1998 26,648.000 16,129.000 12,100.000 2,655.000 139,659.000 6,728.000 1,200.000 18,040.000 165,627.000 34,296.000 1,446.000 1,370.000 34,220.000 12,817.000 21,403.000 29,615.000 30,410.000 Fiscal 1997 21,403.000 8,783.000 2,194.000 2,111.000

Adjustments to reconcile net earnings to net cash used by operating Activities:

-70,078.000 Net(decrase) increase in cash and cash equivalents

Ratios Current Ratio Quick Ratio Net Working Capital Net liquid Balance Working Capital Requirements WCR/S Cash Flow from Operatons

1,999.000 3.387 0.374 316,798.000 5,773.000 311,025.000 0.401 -82,070.000

1,998.000 1.998 0.675 155,461.000 -11,399.000 166,860.000 0.349 -26,384.000

Cash Conversion period Days inventory Held, DIH Days Sales Outstanding Days Payables Outstanding Current Liquidity index Total Assets/Total Sales Profit Margin Dividend Payout Debt to equity ratio, D/E Sustainable growth, g*

250.631 322.693 8.891 80.953 0.004 0.890 0.034 0.709

214.221 268.879 12.079 66.737 0.937 0.045 0.092

1999 S= gS= A/S= m= d= D/E= 1.117 478,638.000 -0.619 0.890 0.034

1998 774,863.000 0.937 0.045 0.672

1. Current ratio versus quick ratio The current ratio went up because the inventory increased considerable with the increase of account receivable and other current assets compared to the decrease of cash and equivalents. Therefore, the quick ratio went down because current assets subtract the large amount of inventory would become less than those subtract the small amount of inventory. There was a big difference between two year inventories why current assets only changed 2. Discussion of working capital cycle Days inventory held increased from 268 days in fiscal 1997 to 322 days in 1998. Days sales outstanding decreased from 12 days to 9 days. Days payables outstanding increased from 67 days to 81 days. So, the cash conversion period increased from 214 days to 250 days. 3. Just for Feet Company has the ability to pay their current obligations. The difference of the current ratios over two years has increased from 1.99 to a 3.38. This implies that for every dollar sale they incur, approximately three dollars over current liabilities. Just For Feet has more than enough assets to cover current obligation & investing as well. Also, the quick ratio went on a decline over the past two yearsimplying that they were having less liability 4. Just for Feets solvency position increased in benefit. The company was able to meet their obligations and incur more assets to continue its growth. The company received more profit and operation became a major contributing factor. From a liquidity standpoint, the company went on a decline. Inventory was being held longer and the cash conversion period increased in the number of days, slowing the cycle for turning their assets into cash. The disbursement of cash became longer as well. The company may the 1997 year-endprofit; but their cash 5. The sustainable growth rate was 8.66% using have turned out a figures. In order to finance their growth they had to increase their debt-to-equity ratio in 1998 to 1.11 from .67 of 1997.company did have increased in earnings and its current ratio increased from 1997 to 6. The 1998. But the companys operations had generated an increase in deficit cash flow level and their current liquidity index shows that they dont have any liquid resources compare to the current level of debt due. This company is in trouble due to their lack of liquidity.