AP122 Financial information for American Eagle is presented in Appendix A at the end of the book. Required: 1. Calculate the following risk ratios for the year ended February 3, 2018: a. Receivables turnover ratio. b. Average collection period. c. Inventory turnover ratio. d. Average days in inventory. e. Current ratio. f. Acid-test ratio. g. Debt to equity ratio.

2. Calculate the following profitability ratios for the year ended February 3, 2018: a. Gross profit ratio. b. Return on assets. c. Profit margin. d. Asset turnover. e. Return on equity.

AMERICAN EAGLE OUTFITTERS, INC. Consolidated Balance Sheets January 28, February 3. 2018 2017 (In thousands, except per share amounts) Assets Current assets: Cash and cash equivalents Merchandise inventory Accounts receivable, net Prepaid expenses and other Total current assets 413,613 398,213 78,304 78,400 968,530 724,239 46,666 15,070 9,344 52,464 1,816,313 378,613 358,446 86,634 77,536 901,229 707,797 Property and equipment, net of accumulated depreciation Intangible assets, net of accumulated amortization Goodwill Deferred income taxes 14,887 49,250 60,124 1,782,660 Other assets Total assets $ S $ $ Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued compensation and payroll taxes Accrued rent Accrued income and other taxes Unredeemed gift cards and gift certificates Current portion of deferred lease credits Other liabilities and accrued expenses Total current liabilities Non-current liabilities: Deferred lease credits 236,703 54,324 83,312 12,781 52,347 11,203 34,551 485,221 246,204 54,184 78,619 12,220 52,966 12,780 36,810 493,783 Non-current accrued income taxes 47,977 7,269 29,055 84,301 45,114 4,537 34,657 84,308 Other non-current liabilities Total non-current liabilities Commitments and contingencies Stockholders' equity: Preferred stock, $0.01 par value; 5,000 shares authorized; none issued and outstanding Common stock, S0.01 par value; 600,000 shares authorized; 249,566 shares issued; 177,316 and 181,886 shares outstanding, respectively Contributed capital Accumulated other comprehensive loss, net of tax Retained earnings Treasury stock, 72,250 and 67,680 shares, respectively, at cost Total stockholders' equity Total liabilities and stockholders' equity 2,496 593,770 (30,795) 1,883,592 (1,202,272 1,246,791 1,816,313 2,496 603,890 (36,462) 1,775,775 (1,141,130) 1,204,569 1,782,660 $ $ Refer to Notes to Consolidated Financial Statements APPENDIX A American Eagle Outfitters, Inc., 2017 Annual Report A-5 AMERICAN EAGLE OUTFITTERS, INC. Consolidated Statements of Operations For the Years Ended February 3, 2018 3,795,549 January 28, 2017 3,609,865 January 30, 2016 3,521,848 $ $ $ (in thousands, except per share amounts) Total net revenue Cost of sales, including certain buying, occupancy and warehousing expenses Gross profit Selling, general and administrative expenses Impairment and restructuring charges Depreciation and amortization expense Operating income Other (expense) income, net Income before income taxes 2,425,044 1,370,505 879,685 20,611 167,421 302,788 (15,615) 287,173 83,010 204,163 2,242,938 1,366,927 857,562 21,166 156,723 331,476 3,786 335,262 122,813 212,449 2,219,114 1,302,734 834,700 0 148,156 319,878 1,993 321,871 108,580 213,291 4,847 218,138 Provision for income taxes Income from continuing operations Discontinued operations, net of tax Net income $ 204,163 $ 212,449 $ $ 1.15 $ 1.17 $ Basic income per common share: Income from continuing operations Discontinued operations Basic net income per common share 1.10 0.02 $ 1.15 $ 1.17 $ 1.12 $ 1.13 $ 1.16 $ Diluted income per common share: Income from continuing operations Discontinued operations Diluted net income per common share 1.09 0.02 $ 1.13 $ 1.16 $ 1.11 Weighted average common shares outstanding - basic Weighted average common shares outstanding - diluted 177,938 180,156 181,429 183,835 194,351 196,237 Refer to Notes to Consolidated Financial Statements A-6 APPENDIX A American Eagle Outfitters, Inc., 2017 Annual Report AMERICAN EAGLE OUTFITTERS, INC. Consolidated Statements of Comprehensive Income For the Years Ended February 3, January 30, 2018 January 28, 2017 212,449 2016 $ 204,163 $ $ 218,138 (In thousands) Net income Other comprehensive gain (loss): Foreign currency translation gain (loss) Other comprehensive gain (1038 Comprehensive income 5,667 5,667 209,830 (6,594) (6,594) 205,855 (19,924) (19,924 198,214 $ $ $ Refer to Notes to Consolidated Financial Statements APPENDIX A American Eagle Outfitters, Inc., 2017 Annual Report A-7 AMERICAN EAGLE OUTFITTERS, INC. Consolidated Statements of Stockholders' Equity Shares Outstanding (0) 194,516 Common Stock $ 2.496 Contributed Capital Retained Earnings Accumulated Other Treasury Comprehensive Stockholders Stock (2) Income (Loss) Equity $ (965,566) $ (9.944) $ 1,139,746 31,937 $ 569,675 $ 1,543,085 31,937 (15,563) (324) 1,506 (227.071) (5.163) 26.461 (13,237) (2,332) 218,138 (227.071) (5,163) 10,892 218,138 (19,924) (19.924) (99,624 $ 1,659,267 180,135 2.445 590,820 27,877 2,496 $(1,171,339) (97,179) (29,868) $ 1,051,376 27,877 (In thousands, except per share amounts) Balance at January 31, 2015 Stock awards Repurchase of common stock as part of publicly announced programs Repurchase of common stock from employees Reissuance of treasury stock Net income Other comprehensive loss Cash dividends and dividend equivalents ($0.50 per share) Balance at January 30, 2016 Stock awards Repurchase of common stock as part of publicly announced programs Repurchase of common stock from employees Reissuance of treasury stock Net Income Other comprehensive loss Cash dividends and dividend equivalents ($0.50 per share) Balance at January 28, 2017 Stock awards Repurchase of common stock as part of publicly announced programs Repurchase of common stock from employees Reissuance of treasury stock Net income Other comprehensive loss Cash dividends and dividend equivalents ($0.50 per share) Balance at February 3, 2018 (455) 2,206 (7,032) 37,241 (17.247) (2.821) 212,449 (7,032) 17.173 212,449 (6.594) (6,594) (93,120) $ 1,775,775 2.440 $ 603,890 17,202 181,886 (90,680) (36,462) $ 1,204,569 2,496 $(1,141,130) 17,202 (6.000) (871) 2.301 (87.672) (12.513) 39,043 (29,632) (5,488) 204,163 (87.672) (12,513) 3,923 204,163 5.667 - 5,667 177,316 $ 2,310 $ 593,770 (90,858) $ 1,883,592 $(1,202,272) (88,548) (30,795) $1,246,791 2,496 (1) 600,000 authorized, 249,566 issued and 177,316 outstanding, $0.01 par value common stock at February 3, 2018; 600,000 authorized, 249,566 issued and 181,886 outstanding, $0.01 par value common stock at January 28, 2017; 600,000 authorized, 249,566 issued and 180,135 outstanding, $0.01 par value common stock at January 30, 2016; 600,000 authorized, 249,566 issued and 194,516 outstanding, $0.01 par value common stock at January 31, 2015. The Company has 5,000 authorized, with none issued or outstanding, $0.01 par value preferred stock for all periods presented 72,250 shares, 67,680 shares and 69,431 shares at February 3, 2018, January 28, 2017 and January 30, 2016 respectively. During Fiscal 2017, Fiscal 2016, and Fiscal 2015, 2,301 shares, 2,206 shares, and 1,506 shares, respectively, were reissued from treasury stock for the issuance of share-based payments. (2) Refer to Notes to Consolidated Financial Statements