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 current ratio for both companies for the year ended February 2, 2013. Which company has the better ratio? Compare your calculations with those for United Airlines and American Airlines reported in the chapter text. Which industry maintains a higher current ratio?
2. Calculate the acid-test (quick) ratio for both companies for the year ended February 2, 2013. Which company has the better ratio? Compare your calculations with those for United Airlines and American Airlines reported in the chapter text. Which industry maintains a higher acid-test ratio?
3. How would the purchase of additional inventory with affect the current ratio for these two companies? Why is the answer for American Eagle and Buckle opposite that for United Airlines?

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...