Refer to the financial statement data for Abercrombie & Fitch in Problem 4.24 in Chapter 4. Exhibit

Question:

Refer to the financial statement data for Abercrombie & Fitch in Problem 4.24 in Chapter 4. Exhibit 5.16 presents risk ratios for Abercrombie & Fitch for fiscal Year 3 and Year 4.

Required
a. Compute the amounts of these ratios for fiscal Year 5.
b. Assess the changes in the short-term liquidity risk of Abercrombie & Fitch between fiscal Year 3 and fiscal Year 5 and the level of that risk at the end of fiscal Year 5.
c. Assess the changes in the long-term risk of Abercrombie & Fitch between fiscal Year 3 and fiscal Year 5 and the level of that risk at the end of fiscal Year 5.

Solvency
Solvency means the ability of a business to fulfill its non-current financial liabilities. Often you have heard that the company X went insolvent, this means that the company X is no longer able to settle its noncurrent financial...