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Abercrombie & Fitch is a close competitor of Deckers Outdoor

Abercrombie & Fitch is a close competitor of Deckers Outdoor and Timberland in the apparel industry. Selected

Question:

Abercrombie & Fitch is a close competitor of Deckers Outdoor and Timberland in the apparel industry. Selected financial data for Abercrombie is provided as follows:

Required:
1. Calculate the return on equity for Abercrombie in 2009. How does it compare with the return on equity for Deckers Outdoor and Timberland reported in the chapter?
2. Calculate the return on the market value of equity for Abercrombie in 2009. How does it compare with the return on the market value of equity for Deckers Outdoor and Timberland reported in the chapter?
3. Why is the return on the market value of equity for Abercrombie, Deckers Outdoor, and Timberland so much lower than the return on equity?
4. Calculate the price-earnings ratio for Abercrombie in 2009. How does it compare with the price-earnings ratio for Deckers Outdoor and Timberland reported in the chapter? Which is trading at a lower price per dollar of earnings?

Transcribed Image Text:

S in millions) Sales Net income $3,540 272 $3,750 476 Total assets Total liabilities Stockholders' equity $2848 $2568 $ 949 1,619 $1,003 1,845 Total liabilities and stockholders' equity Shares outstanding (in millions) Stock price 103 $29

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Requirement 1 in millions Net Income Average Stockholders Equity Return on Equity Abercrombie 272 16...View the full answer

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Financial Accounting

ISBN: 9780078110825

2nd Edition

Authors: J. David Spiceland, Wayne Thomas, Don Herrmann

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Question Posted: Jan 16, 2017 10:35 AM

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