Financial information for American Eagle is presented in Appendix A at the end of the book, and
Question:
Financial information for American Eagle is presented in Appendix A at the end of the book, and financial information for Buckle is presented in Appendix B at the end of the book.
Required:
1. Calculate the following risk ratios for both companies for the year ended February 2, 2013. Based on these calculations, which company appears to be more risky?
a. Receivables turnover ratio.
b. Average collection period.
d. Average days in inventory.
e. Current ratio.
f. Acid-test ratio.
g. Debt to equity ratio.
2. Calculate the following profitability ratios for both companies for the year ended February 2, 2013. Based on these calculations, which company appears to be more profitable?
a. Gross profit ratio.
b. Return on assets.
c. Profit margin.
d. Asset turnover.
e. Return on equity.
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,...
Step by Step Answer:
Requirement 1 American Eagle Risk Ratios Calculations a Receivable turnover ratio 3475802 40310 46321 2 802 times b Average collection period 365 802 ...View the full answer
Financial Accounting
ISBN: 978-0078025549
3rd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
