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

Question:

Required:

1. Both Abercrombie & Fitch (Note 14) and Aeropostale (Note 14) have notes that discuss contingencies. What contingencies do they disclose? Do you think any of these contingencies are included in the Income Statement or on the Balance Sheet? Why or why not?

2. Calculate Abercrombie & Fitch's and Aeropostale's current ratio for the years ended February 3, 2007, and January 28, 2006.

3. Compare Abercrombie & Fitch's and Aeropostale's short-term liquidity based on the values and trends of the current ratio.

4. Calculate Abercrombie & Fitch's and Aeropostale's quick ratio and cash ratio for the years ended February 3, 2007, and January 28, 2006.

5. Compare the values and trends of these ratios when evaluating Abercrombie & Fitch's and Aeropostale's short-term liquidity.

6. Calculate Abercrombie & Fitch's and Aeropostale's operating cash flows ratio for the years ended February 3, 2007, and January 28, 2006.

7. Compare Abercrombie & Fitch's and Aeropostale's short-term liquidity based on the values and trends of the operating cash flows ratio.

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...