Swot Analysis Of Dick 's Sporting Goods Liquidity Essay

1257 Words Dec 6th, 2016 6 Pages
Liquidity

Dick’s Sporting Goods liquidity dropped 46.34% in fiscal year-end 2015 after a 21.98% increase in fiscal year-end 2014. The drop in liquidity is a product of Dick’s commitment to growth. Dick’s spent over 370 million dollars in fiscal year 2015 on capital expenditures. The result of the capital expenditures was an additional 47 stores, development of the omni-channel platform, and eCommerce development. The company’s commitment to their five-year one-billion-dollar share repurchase program resulted in an over 350 million-dollar cash outflow spent on treasury stock. The plan was authorized in March of 2013 with the goal of satisfying shareholders by increasing the company’s earnings per share. Additionally, the company was able to pay out dividends in excess of 64 million dollars.

Although the company’s liquidity ratios have dropped their ratios are still outperforming their RMA industry average by 15%. The decrease in the company’s liquidity ratios is the result of their current liabilities increasing 6.5% from fiscal year 2014 and their current assets only increasing 0.7% from fiscal year 2014. The company saw a decrease in cash and equivalents, accounts receivable, and income tax receivable in 2015. While also increasing accounts payable, accrued expenses, and deferred revenue and other liabilities. The combination of the movement in these accounts result in lower liquidity ratios for fiscal year 2015.

The decrease in liquidity is not a serious cause for…
Open Document