Acc 422 Disclosure Analysis Paper

Disclosure Analysis Paper

ACC 422

March 5th, 2012

Disclosure Analysis Paper

Dick’s Sporting Goods, Inc. is a publicly traded company that ends its fiscal year on the Saturday closest to the end of January. It can be found on the New York Stock Exchange under the DKS. The purpose of this paper is to analyze the cash and cash equivalents, the accounts receivables, and the inventories that have been reported on the company’s last 10k statement.

Cash and Cash Equivalents

Dick’s Sporting Goods, Inc. (Dick’s) cash and cash equivalents is based on the cash on hand and all highly liquid items purchased that has a maturity of three months or less at the date it was purchased. Interest was also earned on the cash equivalents during the time of this financial statement. In fiscal year 2011, they earned $0.5 million and in fiscal year 2010, they earned $0.1 million. According to the consolidated balance sheets, Dick’s doubled their cash and cash equivalents.

Part of the reason for the increase in the cash was the proceeds from stock options. Dick’s gained of $50 thousand from this option. Another place where Dick’s gained in their cash is in fiscal year 2011, they did not have any repayment of convertible notes as they did in 2010. Between these couple of items and the interest they earned explains how the cash and cash equivalents have been able to increase to double the amount of a year ago.

Receivables

The accounts receivables of Dick’s consist of amounts receivable from vendors and landlords. Their allowance for doubtful accounts was reduced to $2.9 million in fiscal year 2011

from $4.2 million in fiscal year 2010. Even with lowering the allowance for doubtful accounts, Dick’s managed to maintain their accounts receivables fairly even from fiscal year 2010 to 2011. In 2010, their accounts receivable was $35,435 thousand and in 2011, it was $34,978 thousand.

Part of Dick’s receivables is vendor allowances which include rebates and cooperative advertising funds. As the receivables remained the same from one year to the next while the doubtful accounts was lowered, it would seem that the vendors