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 3, 2018. Based on these calculations, which company appears to be more risky?

a. Receivables turnover ratio.

b. Average collection period.

c. Inventory turnover ratio.

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 3, 2018. 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.

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Financial Accounting

ISBN: 978-1259914898

5th edition

Authors: David Spiceland, Wayne M. Thomas, Don Herrmann

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