Hibbet Sports Case

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- Did Retained Earnings increase or decrease from the prior year?

Retained earinings increased from $492,471,000 last year to $566,055,000 this year. (p. 38)

12. Did the company issue any stock or debt in the current year? Hint: Check out the Statement of Cash Flows –

Financing Section.

Hibbet Sports didn’t issue any stock or debt but they had repurchases on common stock.

- What depreciation method does your company use?

Hibbet Sports uses a straight-line method of depreciation. (p. 45)

- If your company has debt, identify the interest rate being paid on one of their notes.

15. Has the company’s liquidity measured by the amount of working capital and current ratio improved or declined

relative to the prior year? (Show and label your calculations.)

Working Capital:

2015: 355,498-102,125=253,373

2014: 323,649-91,414=232,235

Current Ratio:

2015: 355,498/102,125=3.48

2014: 323,649/91,414=3.54

Liquidity decreased from last year to this year since the higher the ratio the better the liquidity. The working capital improved because the assets exceeded its liabilities more this year than last year. (p. 38)

16. Does your company mention any contingent liabilities in the footnotes? If so, what is the nature of the liability?

Are any dollar amounts given regarding contingent liabilities?

There are legal proceedings that could result in contingent liabilities. The estimated cost of the liabilities are .2 million and .4 million. (p. 20)

17. What audit firm audited your company? What type of audit opinion did the auditors issue?

The audit firm for Hibbet Sports was KPMG LLP and they issued a unqualified opinion since the audit firm said that the financial statements were presented fairly in all material aspects. (p. 37)

18. Did your company have more net income this year or last year?

This year the company had a net income of $73,584,000 and last year the company had a net income of $70,877,000 so this year they had a higher net income. (p. 40)