American Eagle Outfitters Inc. operates over 1,000 specialty retail stores, selling clothing such as denim, sweaters, t-shirts, and fleece outerwear. The following asset and liability data (in millions) were adapted from recent financial statements.

1. Compute working capital for Years 2 and 1.
2. Compute the current ratio for Years 2 and 1. Round to one decimal place.
3. Compute the quick ratio for Years 2 and 1. Round to one decimal place.
4. Analyze and assess any changes in liquidity for Years 2 and1.

Transcribed Image Text:

Year 2 Year 1 Current assets Cash Accounts receivable Inventory Prepaid and other current assets S 745 89 378 75 $1,287 S 405 S 734 85 301 54 1.174 388 Total current assets Total current liabilities