Suppose the following data were taken from the 2014 and 2013 financial statements of American Eagle Outfitters. (All dollars are in thousands.)

2014 2013 Current assets $ 925,359 $1,020,834 Total assets 1,963,676 1,867,680 Current liabilities 401,763 376,178 Total liabilities 554,645 527,216 Net income 179,061 400,019 Net cash provided by operating activities 302,193 464,270 Capital expenditures 265,335 250,407 Dividends paid on common stock 82,394 80,796 Weighted-average shares outstanding 205,169 216,119 Instructions Perform each of the following.

(a) Calculate the current ratio for each year.

(b) Calculate earnings per share for each year.

(c) Calculate the debt to assets ratio for each year.

(d) Calculate the free cash flow for each year.

(e) Discuss American Eagle’s solvency in 2014 versus 2013.

(f) Discuss American Eagle’s ability to finance its investment activities with net cash provided by operating activities, and how any deficiency would be met.

AppendixLO1