Financial Accounting (5th Edition) chapter 6

American Eagle Outfitter, Inc.

R1. For the most recent, what is the amount of the inventory in the balance sheet? What does amount represent?

R2. American Eagle refers to its cost of goods sold using a different name. What is it?

R3. For the most recent year, what is the amount of cost of goods sold in the income statement? What does this amount refer?

R4. Calculate American Eagles inventory turnover ratio and average days in inventory for the most recent years. Inventory turnover ratio = Cost of goods sold Average inventory Average days in inventory = 365 Inventory turnover ratio

R5. Calculate American Eagles gross profit ratio for each of the three years. Do you notice any trend? Gross profit ratio = Gross profit Net sales

R6. For the most recent year, calculate American Eagles ratio of operating expenses to sales. Operating expenses Net sales