Financial information for American Eagle is presented in Appendix A$.$

Required:

$1-$a$.$ Calculate the current ratio for the past two years.

$1-$b$.$ Did the current ratio improve or weaken in the more recent year?

$2-$a$.$ Calculate the acid$-$test $($quick$)$ ratio for the past two years.

$2-$b$.$ Did the acid$-$test ratio improve or weaken in the more recent year?

$3.$ If American Eagle used $$100$ million in cash to pay $$100$ million in accounts payable, how would its current ratio and acid$-$test ratio change?

$4.$ Review the balance sheet and note $9$ to the financial statements. Based on this information, how would you rate the bankruptcy risk of American Eagle?

$2019$