Refer to the financial statements of Abercrombie & Fitch and Aeropostale that are supplied with this text.

Question:

Refer to the of Abercrombie & Fitch and Aeropostale that are supplied with this text.

Required:
1. What amounts do Abercrombie & Fitch and Aeropostale report for inventories in its Consolidated Balance Sheets at February 3, 2007 and January 28, 2006?
2. Do Abercrombie & Fitch and Aeropostale use the same method to value its inventories?
3. What amount does Abercrombie & Fitch report for cost of goods sold for the years ending February 3, 2007, January 28, 2006, and January 29, 2005 (fiscal 2006, 2005, and 2004)? What amount does Aeropostale report for cost of goods sold for the years ending February 3, 2007, January 28, 2006, and January 29, 2005?
4. Compute the gross profit and s for fiscal year ending February 3, 2007, for each company? What do these ratios tell you about the success of each company in managing and controlling its inventory?
5. Do Abercrombie & Fitch and Aeropostale use the lower of cost market method to account for their inventories? By what amount have they written inventories down in the fiscal year ending February 3, 2007?

Inventory Turnover Ratio
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,... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...