Using the 2012 and 2013 Annual Report 10K Reports from Levi


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Using the 2012 and 2013 Annual Report 10K Reports from Levi Strauss & Co, create the following: PAGE 1. Reconfigure the Balance Sheet for years 2013, 2012, 2011 into Operating and Financing Classes. Discuss what this might indicate about the company (25 points) PAGE 2 Run the Solvency Risk Ratios for the years 2013 and 2012. Discuss what these indicate about the company ( 25 points) PAGE 3 Run the Univariate Model (BEAVER) ratios for bankruptcy for 2013 and 2012. Run the Z-Score for 2013 and 2012. Discuss your results (25 points) 2012-Annual-Report.pdf _x000C_BUILDING A COMPANY WORTHY OF OUR BRANDS… CHIP BERGH President and Chief Executive Officer Dear SHAREHOLDERS, Customers, EMPLOYEES and Stakeholders, Levi Strauss & Co. is at an unequal moment in time. Last year as a company, we faced some hard facts: we have underperformed for several years. If we want different results to make LS&Co. great again, we need to change how we work and where we place our focus. We committed to creating a company worthy of our great brands and making our founder, Levi Strauss, proud. Our focus is clear: drive sustainable, profitable growth to improve the financial health of the company while improving our ability to invest in what matters most: our brands, our people and our key capabilities. This will also drive shareholder value. Fiscal 2012 was a year of major change. We assembled an almost entirely new leadership team and set the strategy, which guided and informed the new organization structure and operating model. We began executing against it early in fiscal year 2013. The strategy also forced some tough decisions in 2012 that allowed us to priortize our focus against the businesses that matter most. We exited the Denizen® brand in Asia. We also decided to license out the Levi’s® brand boys business and several segments of the United States Dockers® business. While these decisions negatively affected financial results in 2012, we believe they better position the company for the long term. Though we underwent a great deal of change, some things remain constant. Most importantly, our values of empathy, originality, integrity and courage continue to guide our company and we remain committed to profits through principles. Here are the 2012 financial highlights: • _x0007_ et revenues of $4.6 billion decreased three perN cent on a reported basis, less than one percent in constant currency, as increased sales from the company-operated stores in the Americas and Europe were offset by the adverse impact of challenging market conditions in Asia and strategic choices taken during the third quarter to exit certain businesses in the Americas and Asia. • _x0007_ ross margin of 48 percent was just slightly G below the prior year. Excluding currency and the impact of the Denizen® brand exit in Asia, gross margin improved due to lower cotton costs, increased sales from retail stores and lower sales to the discount channels. • _x0007_ et Income was $144 million, up from $138 N million the prior year, reflecting a tax benefit recorded in the fourth quarter. C • _x0007_ ash flow from operations significantly improved to $531 million compared with $2 million the prior year, primarily reflecting lower inventory levels and the lower cost of cotton. N • _x0007_ et debt at the end of the fiscal year was $1.3 billion down from $1.8 billion at the end of the prior year. Due to the improved cash flow and our successful debt refinancing, we reduced gross debt by more than $200 million. We are committed to de-leveraging the company and strengthening the balance sheet over time. I joined this company because I genuinely believed that there is no reason Levi Strauss & Co. couldn’t again be the best apparel company in the world and one of the best companies in any industry. As I studied the company from the outside looking in, I saw enormous potential. Now, with a full fiscal year under my belt, I’m more convinced than ever that we can achieve these goal

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