CP8-2 Finding Financial Information LO8-1, 8-2, 8-6 Refer to the financial statements of Urban Outfitters given in Appendix C at the end of this book. Year 2012.

Required:

1. What method of depreciation does the company use? "

2. What is the amount of accumulated depreciation and amortization at the end of the most recent reporting year?"

3. For depreciation purposes, what is the estimated useful life of furniture and fixtures? "

4. What was the original cost of leasehold improvements owned by the company at the end of the most recent reporting year?" "

5. What amount of depreciation and amortization was reported as expense for the most recent reporting year?"

6. What is the companys fixed asset turnover ratio for the most recent year?

What does it suggest?

URBAN OUTFITTERS, INC.

Consolidated Balance Sheets

(in thousands, except share and per share data)

		January 31,
		2012				2011
ASSETS
Current assets:
Cash and cash equivalents		$	145,273			$	340,257
Marketable securities			89,854				116,420
Accounts receivable, net of allowance for doubtful accounts of $1,614 and $1,015, respectively			36,673				36,502
Inventories			250,073				229,561
Prepaid expenses and other current assets			69,876				66,886
Deferred taxes			5,243				14,351
Total current assets			596,992				803,977
Property and equipment, net			684,979				586,346
Marketable securities			126,913				351,988
Deferred income taxes and other assets			74,824				52,010
Total Assets		$	1,483,708			$	1,794,321
LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities:
Accounts payable		$	95,754			$	82,904
Accrued compensation			15,630				20,212
Accrued expenses and other current liabilities			122,082				107,908
Total current liabilities			233,466				211,024
Deferred rent and other liabilities			183,974				171,749
Total Liabilities			417,440				382,773
Commitments and contingencies (see Note 12)
Shareholders equity:
Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued
Common shares; $.0001 par value, 200,000,000 shares authorized, 144,633,007 and 164,413,427 issued and outstanding, respectively			15				17
Additional paid-in capital							27,603
Retained earnings			1,077,765				1,394,190
Accumulated other comprehensive loss			(11,512	)			(10,262	)
Total Shareholders Equity			1,066,268				1,411,548
Total Liabilities and Shareholders Equity		$	1,483,708			$	1,794,321
URBAN OUTFITTERS, INC. Consolidated Statements of Income (in thousands, except share and per share data) Fiscal Year Ended January 31, 2012 2011 2010 Net sales $ 2,473,801 $ 2,274,102 $ 1,937,815 Cost of sales, including certain buying, distribution and occupancy costs 1,613,265 1,337,482 1,151,670 Gross profit 860,536 936,620 786,145 Selling, general and administrative expenses 575,811 522,417 447,161 Income from operations 284,725 414,203 338,984 Interest income 5,120 4,669 6,290 Other income 553 486 463 Other expenses (1,567 ) (2,150 ) (1,331 ) Income before income taxes 288,831 417,208 344,406 Income tax expense 103,580 144,250 124,513 Net income $ 185,251 $ 272,958 $ 219,893 Net income per common share: Basic $ 1.20 $ 1.64 $ 1.31 Diluted $ 1.19 $ 1.60 $ 1.28 Weighted average common shares outstanding: Basic 154,025,589 166,896,322 168,053,502 Diluted 156,191,289 170,333,550 171,230,245 The accompanying notes are an integral part of these consolidated financial statements. F-4 Table of Contents URBAN OUTFITTERS, INC. Consolidated Statements of Shareholders Equity (in thousands, except share data) Compre- hensive Income Common Shares Additional Paid-in Capital Retained Earnings Accumulated Other Compre- hensive Loss Total Number of Shares Par Value Balances as of January 31, 2009 167,712,088 $ 17 $ 170,166 $ 901,339 $ (17,747 ) $ 1,053,775 Net income $ 219,893 219,893 219,893 Foreign currency translation 7,173 7,173 7,173 Unrealized gains on marketable securities, net of tax 1,480 1,480 1,480 Comprehensive income $ 228,546 Share-based compensation 4,766 4,766 Stock options and awards 846,283 3,250 3,250 Tax effect of share exercises 6,438 6,438 Balances as of January 31, 2010 168,558,371 $ 17 $ 184,620 $ 1,121,232 $ (9,094 ) $ 1,296,775 Net income $ 272,958 272,958 272,958 Foreign currency translation (429 ) (429 ) (429 ) Unrealized losses on marketable securities, net of tax (739 ) (739 ) (739 ) Comprehensive income $ 271,790 Share-based compensation 10,725 10,725 Stock options and awards 2,256,273 24,129 24,129 Tax effect of share exercises 12,847 12,847 Share Repurchases (6,401,217 ) (204,718 ) (204,718 ) Balances as of January 31, 2011 164,413,427 $ 17 $ 27,603 $ 1,394,190 $ (10,262 ) $ 1,411,548 Net income $ 185,251 185,251 185,251 Foreign currency translation (2,285 ) (2,285 ) (2,285 ) Unrealized gains on marketable securities, net of tax 1,035 1,035 1,035 Comprehensive income $ 184,001 Share-based compensation 3,068 3,068 Stock options and awards 993,923 4,134 4,134 Tax effect of share exercises 8,995 8,995 Share Repurchases (20,774,343 ) (2 ) (43,800 ) (501,676 ) (545,478 ) Balances as of January 31, 2012 144,633,007 $ 15 $ $ 1,077,765 $ (11,512 ) $ 1,066,268 The accompanying notes are an integral part of these consolidated financial statements. F-5 Table of Contents URBAN OUTFITTERS, INC. Consolidated Statements of Cash Flows (in thousands) Fiscal Year Ended January 31, 2012 2011 2010 Cash flows from operating activities: Net income $ 185,251 $ 272,958 $ 219,893 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 108,112 101,105 92,350 Provision for deferred income taxes (12,150 ) (8,727 ) 2,161 Excess tax benefit on share-based compensation (8,995 ) (12,847 ) (6,438 ) Share-based compensation expense 3,068 10,725 4,766 Loss on disposition of property and equipment, net 857 119 339 Changes in assets and liabilities: Receivables (251 ) 1,835 (1,825 ) Inventories (20,817 ) (43,372 ) (15,544 ) Prepaid expenses and other assets 6,317 14,825 (25,619 ) Accounts payable, accrued expenses and other liabilities 21,310 48,492 55,311 Net cash provided by operating activities 282,702 385,113 325,394 Cash flows from investing activities: Cash paid for property and equipment (190,010 ) (143,642 ) (109,260 ) Cash paid for marketable securities (169,467 ) (463,129 ) (806,546 ) Sales and maturities of marketable securities 414,769 571,236 421,040 Net cash provided by (used in) investing activities 55,292 (35,535 ) (494,766 ) Cash flows from financing activities: Exercise of stock options 4,136 24,129 3,250 Excess tax benefit from stock option exercises 8,995 12,847 6,438 Share repurchases (545,478 ) (204,718 ) Net cash (used in) provided by financing activities (532,347 ) (167,742 ) 9,688 Effect of exchange rate changes on cash and cash equivalents (631 ) (603 ) 2,673 (Decrease) increase in cash and cash equivalents (194,984 ) 181,233 (157,011 ) Cash and cash equivalents at beginning of period 340,257 159,024 316,035 Cash and cash equivalents at end of period $ 145,273 $ 340,257 $ 159,024 Supplemental cash flow information: Cash paid during the year for: Income taxes $ 120,847 $ 121,341 $ 137,490 Non-cash investing activitiesAccrued capital expenditures $ 21,955 $ 8,077 $ 12,960 The accompanying notes are an integral part of these consolidated financial statements. F-6 Table of Contents URBAN OUTFITTERS, INC.