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.
1. Which company carries a greater inventory balance as a percentage of total assets?
2. Analyze each company’s inventory using the inventory turnover ratio and average days in inventory.
3. Determine which company’s operations are more profitable using the gross profit ratio.
4. Considering the companies’ ratio of operating expenses to net sales, does your answer to Requirement 3 change? Explain.