GNC Holding Case Study 2022

Running head: GNC HOLDINGS
GNC HOLDINGS
Name of the student:
Name of the university:
Author Note:

GNC HOLDINGS1
1. As we have done in class so many times, please provide an orderly “5-minute
summary” of the financial statements in the space provided below. (6 points)
Ans.
The chosen company for the assignment is the GNC holdings and financial statement
of the company has been analyzed accordingly. With the help of the various ratio, it is quite
possible to understand the overall financial position of the firm. This on the other hand will
allow the upper level management of the organization to take the respective decisions based
on the analysis of the company.

GNC HOLDINGS2
(all $ are in thousands unless otherwise stated)
2. a. Considering the information
provided in the financial statements
and the notes, please determine the $
amount of the items shown on the
right for the year 2018 or as of
December 31, 2018, as appropriate.
(6 points)
b. Suppose that the amount that GNC
should have reported as a Bad Debt
Expense for 2018 was $4,019. By
what amount did GNC over- or
understate the items shown on the
right as a result of reporting the
incorrect Bad Debt Expense? (3 point)
Ans.
There is actually no effect in the bad debt
expenses of the company.
2. a. (i) Allowance for Doubtful
Accounts_$2563________________
(ii). Bad Debt Expense __$ 4019_____________
(iii). Accounts Receivable Written-off __$127317____________
(iv) Days Sales Outstanding__$_82249_____________
c. Circle the correct response Fill in the
amount
(i) EBIT overstated or understated by __overstated
by _$_367516 ______
(ii) Accounts Receivable as reported on the Balance Sheet
overstated or understated by overstated
by_$_667______
(iii) Cash Flow from Operating Activities
overstated or understated by _understated by
$ 124640_________
3. During 2018, GNC wrote off a
receivable in the amount of $100.
How did this write-off affect the
items shown at the right for that
year? (3 points)
Ans. The receivables of GNC have been
written off $100 and it will be treated by
adding $100 in the account receivables
of the company.
3.
Circle the correct response
(i) Accounts receivable, net decrease/increase/ no effect – The
net account receivables has increased.
(ii) Operating profit margin decrease/increase/ no effect – The
operating profit margin has increased in comparison to the previous
year.
(iii)Total receivables outstanding... decrease/increase/ no effect – The
total receivables outstanding of the company has increased in
comparison to the previous year.
4. Has management been accurate in
estimating the amount of accounts that
will prove to be uncollectible over the
4.
The management has been accurate in estimating the amount of
accounts which is quite uncollectable over the past three years. The

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past three years? Provide evidence to
support your answer. (2 points)
reasons behind that is the amount which is collected in terms of
receivables is based on the evaluation of the actual amount.