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. Which company has a greater amount of cash relative to total assets? What might this mean about the two companies’ potential growth opportunities?
2. Based on the trend in net income versus free cash flows over the three most recent years, which company would you predict to have a greater percentage increase in net income in the following year? Why?