American Eagle Outfitters Inc. (AEO) operates specialty retail stores, selling clothing such as denim, sweaters, t-shirts, and fleece outerwear that targets 15-to-25-year-old men and women. The following asset and liability data (in millions) were adapted from recent financial statements.

Line Item Description	Year 2	Year 1
Current assets:
Cash	$435	$850
Accounts receivable	287	146
Inventory	553	405
Prepaid and other current assets	122	121
Total current assets	$1,397	$1,522
Total current liabilities	$843	$858

1.  Compute quick assets for Years 2 and 1.

Line Item Description	Quick Assets
Year 2	$fill in the blank 1million
Year 1	$fill in the blank 2million

2.  Compute the quick ratio for Years 2 and 1. Round your answers to two decimal places.

Line Item Description	Quick Ratio
Year 2	fill in the blank 3
Year 1	fill in the blank 4

3.  American Eagle Outfitters' quick assets fill in the blank 1 of 5

increaseddecreasedremained samedecreased

 by fill in the blank 2 of 5$ million during Year 2. Its quick ratio fill in the blank 3 of 5

increaseddecreasedremained samedecreased

 by fill in the blank 4 of 5 during Year 2. Overall, American Eagle Outfitters' liquidity position has fill in the blank 5 of 5

inclineddeclinedstayed approximately the samedeclined

 from Year 1 to Year 2.

Answer rating: 100% (QA)

Part 1 Compute Quick Assets for Years 2 and 1 Quick Assets are calculated as Cash Accounts Receivabl... View the full answer