Financial information for American Eagle is presented in Appendix A, and financial info Required: 1-a. Calculate...

Transcribed Image Text:

Financial information for American Eagle is presented in Appendix A, and financial info Required: 1-a. Calculate the following risk ratios for both companies for the most recent year. 1-b. Based on these calculations, which company appears to be more risky? 2-a. Calculate the following profitability ratios for both companies for the most recent yea 2-b. Based on these calculations, which company appears to be more profitable? ears to Complete this question by entering your answers in the tabs below. Req la Req 1b Req 2a Req 2b Calculate the following risk ratios for both companies for the most recent year. (Use 365 days a calculations and final answers to 1 decimal place.) Risk Ratios a. Receivables turnover ratio b. Average collection period c. Inventory turnover ratio d. Average days in inventory e. Current ratio 1. Acid-test ratio AMERICAN EAGLE THE BUCKLE times times days days times times days days g. Debt to equity ratio) % % Req 1b > Print Complete this question by entering your answers in the tabs below. References Req la Req 1 Req 2a Req 2b Req 1b Calculate the following profitability ratios for both companies for the most recent year. (Round yo and final answers to 1 decimal place.) Profitability Ratios (a Gross profit ratio AMERICAN EAGLE THE BUCKLE % b. Return on assets c. Profit margin % % 96 % d. Asset turnover times times e. Return on equity % 4/18 100% + A-4 APPENDIX A American Eagle Outfitters, Inc., 2020 Annual Report AMERICAN EAGLE OUTFITTERS, INC. Consolidated Balance Sheets (to thousands, except per share amounts) Assets Current assets: February 1. 2020 February 2, 2019 Cash and cash equivalents 361,930 $ Short-term investments (available for sale) 55,000 333,330 92,135 Merchandise inventory 446,278 424,404 Accounts receivable, net 119,064 93,477 Prepaid expenses and other 65,658 102,907 Total current assets 1,047,930 1,046,253 Property and equipment, at cost, net of accumulated depreciation 735,120 742,149 Operating lease right-of-use assets 1,418,916 Intangible assets, net, including goodwill 53,004 58,167 Non-current deferred income taxes 22.724 14,062 Other assets 50,985 42.747 3,328,679 $ 1,903,378 Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Current portion of operating lease habilities Accrued income and other taxes Accrued compensation and payroll taxes Unredeemed gift cards and gift certificates Other current liabilities and accrued expenses Total current liabilities Non-current liabilities Other non-current liabilities Non-current operating lease 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 $0.01 par value: 600.000 shares authonzed, 249,566 shares issued; 166,993 and 172,436 shares outstanding, respectively Contributed capital 285,746 $ 240,671 299,161 0,514 20,064 43,537 56,974 82,173 53,997 145,740 56,824 751,756 542,645 1,301,735 27,335 73,178 1.329.070 73,178 2,400 577,056) 2.400 574,920 Accumulated other comprehensive loss, net of sax Retained earnings Treasury stock 82 573 and 77.130 shares, respectively, at cost Total stockholders' equity Total abilities and stockholders equity (33.160) (34,832) 2.100.292 (1.407 623) 2.054,654 (1,309,092) 1,247,853 1.207.555 3328.670 1.903,378 Refer to Notes to Consolidaled Financial Statements E 5/18 100% + APPENDIX A American Eagle Outfitters, Inc., 2020 Annual Report A-5 AMERICAN EAGLE OUTFITTERS, INC. Consolidated Statements of Operations 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 February 1, 2020 4,308,212 For the Years Ended February 2 2019 February 3, 2010 $ 4,035,720 $ 3,795,549 2,785,911 2,548,082 2,425,044 1,522,301 1,487,638 1,370,505 1,029,412 980,610 879,685 80,494 1,568 20,011 Depreciation and amortization expense 179,050 Operating income Other income (expense), net Income before income taxes Provision for income taxes Net income Basic net income per common share Diluted net income per common share Weighted average common shares outstanding basic Weighted average common shares outstanding diluted 233,345 168,331 337,129 167.421 302,768 11.933 7.971 (15.615) 245,278 345 100 54,021 $ 191,257 $ 83,198 261,902 287.173 83,010 $ 204,103 $ 1,13 $ 1.48 $ 145 1.12 1.47 1.13 160,711 176,476 177,038 170,867 170,035 100,150 Refer to Notes to Consolidated Financial Statements A-6 APPENDIX A American Eagle Outfitters, Inc., 2020 Annual Report AMERICAN EAGLE OUTFITTERS, INC. Consolidated Statements of Comprehensive Income (In thousands) Net income Other comprehensive gain (loss) Foreign currency translation gain (loss) Other comprehensive gain (loss) Comprehensive income February 1, For the Years Ended February 2 2020 2019 191,257 $ 201,902 $ 1,664 (4,037) 5,664) (4,037) 192,921 $ 257,865 Refer to Notes to Consolidated Financial Statements February 3, 2018 204.163 5,667 5,667 209,830 CONSOLIDATED BALANCE SHEETS (Amounts in Thousands Except Share and Per Share Amounts) ASSETS CURRENT ASSETS Cash and cash equivalents Short-term investments (Notes and C) Receivables Inventory Prepaid expenses and other assets Total current assets PROPERTY AND EQUIPMENT (Note 1) Less accumulated depreciation and amortization OPERATING LEASE RIGHT-OF-ASE ASSETS (Note D) LONG-TERM INVESTMENTS (Notes 11 and C) OTHER ASSETS (Notes Gand 11) Total assets LIABILITIES AND STOCKHOLDERS EQUITY CURRENT LIABILITIES Accounts payable Accrued employee compemation Accrued store operating expenses Gin Current portion of operats DEFERRED COMPENSATION (N) NON CURRENT OPERATING LEASE LIABILITIES (ND) DEFERRED RINY LIABILITY COMMITMENTS and STOCKIKLIERS TQUITY OK Cokerid 100,000,000 501 al 15 and 735 casing aubeary 1, 2020 and Fary 2, 2011, spoty A pilipil February 1, 2020 February 2, 2019 220,969 5 168,471 12,532 $1,346 3.136 7,089 121,258 125390 20,935 18.136 378330 370,432 453,205 492,187 (338357) 321505) 713,848 13062 350 15,363 18345 2261 7,443 162,390 5 527,302 2601 $ 22929 21,004 21.452 17337 15309 16534 17,314 2254 54412 172441 9021 290218 29.229 476,743 XA25 SAL564 240x32 JRUZY (Amounts in Thousands Except Per Share Amounts) SALES, Net of returns and allowances COST OF SALES (Inchading buying, distribution, and occupancy costs) Gross profit OPERATING EXPENSES: February 1, 2020 Fiscal Years Ended February 2, 2019 February 3, 2018 900,254 $ 885,496 $ 913,380 522,780 519,423 533,357 377,474 366,073 380,023 Selling General and administrative 204,480 202,032 206,068 41,497 43,113 39,877 245,977 245,145 245945 INCOME FROM OPERATIONS 131,497 120,928 134,078 OTER INCOME, Net 6210 5,716 5,407 INCOME BEFORE INCOME TAXES 137,707 126641 139,485 PROVISION FOR INCOME TAXES (Note C 31278 31,036 49.77K NET INCOME 104,429 S 95.6 $ 9,707 EARNINGS PER SHARE (Note 1) Besic Baned 2.15 5 1.97 5 214 5 197 S 135 B-6 APPENDIX B The Buckle, Inc., 2020 Annual Report THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in Thousands) NET INCOME OTHER COMPREHENSIVE INCOME, NET OF TAX Change in unrealized loss on investments, net of tax of 50, 531, and 517, respectively Other comprehensive income COMPREHENSIVE INCOME Soc notes to consolidated financial statements February 1, 2020 Fiscal Years Ended February 2 2019 101,429 S 95.608 February 3, 2018 89,707 (7) S 101429 $ 95697 $ 19,700 Financial information for American Eagle is presented in Appendix A, and financial info Required: 1-a. Calculate the following risk ratios for both companies for the most recent year. 1-b. Based on these calculations, which company appears to be more risky? 2-a. Calculate the following profitability ratios for both companies for the most recent yea 2-b. Based on these calculations, which company appears to be more profitable? ears to Complete this question by entering your answers in the tabs below. Req la Req 1b Req 2a Req 2b Calculate the following risk ratios for both companies for the most recent year. (Use 365 days a calculations and final answers to 1 decimal place.) Risk Ratios a. Receivables turnover ratio b. Average collection period c. Inventory turnover ratio d. Average days in inventory e. Current ratio 1. Acid-test ratio AMERICAN EAGLE THE BUCKLE times times days days times times days days g. Debt to equity ratio) % % Req 1b > Print Complete this question by entering your answers in the tabs below. References Req la Req 1 Req 2a Req 2b Req 1b Calculate the following profitability ratios for both companies for the most recent year. (Round yo and final answers to 1 decimal place.) Profitability Ratios (a Gross profit ratio AMERICAN EAGLE THE BUCKLE % b. Return on assets c. Profit margin % % 96 % d. Asset turnover times times e. Return on equity % 4/18 100% + A-4 APPENDIX A American Eagle Outfitters, Inc., 2020 Annual Report AMERICAN EAGLE OUTFITTERS, INC. Consolidated Balance Sheets (to thousands, except per share amounts) Assets Current assets: February 1. 2020 February 2, 2019 Cash and cash equivalents 361,930 $ Short-term investments (available for sale) 55,000 333,330 92,135 Merchandise inventory 446,278 424,404 Accounts receivable, net 119,064 93,477 Prepaid expenses and other 65,658 102,907 Total current assets 1,047,930 1,046,253 Property and equipment, at cost, net of accumulated depreciation 735,120 742,149 Operating lease right-of-use assets 1,418,916 Intangible assets, net, including goodwill 53,004 58,167 Non-current deferred income taxes 22.724 14,062 Other assets 50,985 42.747 3,328,679 $ 1,903,378 Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Current portion of operating lease habilities Accrued income and other taxes Accrued compensation and payroll taxes Unredeemed gift cards and gift certificates Other current liabilities and accrued expenses Total current liabilities Non-current liabilities Other non-current liabilities Non-current operating lease 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 $0.01 par value: 600.000 shares authonzed, 249,566 shares issued; 166,993 and 172,436 shares outstanding, respectively Contributed capital 285,746 $ 240,671 299,161 0,514 20,064 43,537 56,974 82,173 53,997 145,740 56,824 751,756 542,645 1,301,735 27,335 73,178 1.329.070 73,178 2,400 577,056) 2.400 574,920 Accumulated other comprehensive loss, net of sax Retained earnings Treasury stock 82 573 and 77.130 shares, respectively, at cost Total stockholders' equity Total abilities and stockholders equity (33.160) (34,832) 2.100.292 (1.407 623) 2.054,654 (1,309,092) 1,247,853 1.207.555 3328.670 1.903,378 Refer to Notes to Consolidaled Financial Statements E 5/18 100% + APPENDIX A American Eagle Outfitters, Inc., 2020 Annual Report A-5 AMERICAN EAGLE OUTFITTERS, INC. Consolidated Statements of Operations 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 February 1, 2020 4,308,212 For the Years Ended February 2 2019 February 3, 2010 $ 4,035,720 $ 3,795,549 2,785,911 2,548,082 2,425,044 1,522,301 1,487,638 1,370,505 1,029,412 980,610 879,685 80,494 1,568 20,011 Depreciation and amortization expense 179,050 Operating income Other income (expense), net Income before income taxes Provision for income taxes Net income Basic net income per common share Diluted net income per common share Weighted average common shares outstanding basic Weighted average common shares outstanding diluted 233,345 168,331 337,129 167.421 302,768 11.933 7.971 (15.615) 245,278 345 100 54,021 $ 191,257 $ 83,198 261,902 287.173 83,010 $ 204,103 $ 1,13 $ 1.48 $ 145 1.12 1.47 1.13 160,711 176,476 177,038 170,867 170,035 100,150 Refer to Notes to Consolidated Financial Statements A-6 APPENDIX A American Eagle Outfitters, Inc., 2020 Annual Report AMERICAN EAGLE OUTFITTERS, INC. Consolidated Statements of Comprehensive Income (In thousands) Net income Other comprehensive gain (loss) Foreign currency translation gain (loss) Other comprehensive gain (loss) Comprehensive income February 1, For the Years Ended February 2 2020 2019 191,257 $ 201,902 $ 1,664 (4,037) 5,664) (4,037) 192,921 $ 257,865 Refer to Notes to Consolidated Financial Statements February 3, 2018 204.163 5,667 5,667 209,830 CONSOLIDATED BALANCE SHEETS (Amounts in Thousands Except Share and Per Share Amounts) ASSETS CURRENT ASSETS Cash and cash equivalents Short-term investments (Notes and C) Receivables Inventory Prepaid expenses and other assets Total current assets PROPERTY AND EQUIPMENT (Note 1) Less accumulated depreciation and amortization OPERATING LEASE RIGHT-OF-ASE ASSETS (Note D) LONG-TERM INVESTMENTS (Notes 11 and C) OTHER ASSETS (Notes Gand 11) Total assets LIABILITIES AND STOCKHOLDERS EQUITY CURRENT LIABILITIES Accounts payable Accrued employee compemation Accrued store operating expenses Gin Current portion of operats DEFERRED COMPENSATION (N) NON CURRENT OPERATING LEASE LIABILITIES (ND) DEFERRED RINY LIABILITY COMMITMENTS and STOCKIKLIERS TQUITY OK Cokerid 100,000,000 501 al 15 and 735 casing aubeary 1, 2020 and Fary 2, 2011, spoty A pilipil February 1, 2020 February 2, 2019 220,969 5 168,471 12,532 $1,346 3.136 7,089 121,258 125390 20,935 18.136 378330 370,432 453,205 492,187 (338357) 321505) 713,848 13062 350 15,363 18345 2261 7,443 162,390 5 527,302 2601 $ 22929 21,004 21.452 17337 15309 16534 17,314 2254 54412 172441 9021 290218 29.229 476,743 XA25 SAL564 240x32 JRUZY (Amounts in Thousands Except Per Share Amounts) SALES, Net of returns and allowances COST OF SALES (Inchading buying, distribution, and occupancy costs) Gross profit OPERATING EXPENSES: February 1, 2020 Fiscal Years Ended February 2, 2019 February 3, 2018 900,254 $ 885,496 $ 913,380 522,780 519,423 533,357 377,474 366,073 380,023 Selling General and administrative 204,480 202,032 206,068 41,497 43,113 39,877 245,977 245,145 245945 INCOME FROM OPERATIONS 131,497 120,928 134,078 OTER INCOME, Net 6210 5,716 5,407 INCOME BEFORE INCOME TAXES 137,707 126641 139,485 PROVISION FOR INCOME TAXES (Note C 31278 31,036 49.77K NET INCOME 104,429 S 95.6 $ 9,707 EARNINGS PER SHARE (Note 1) Besic Baned 2.15 5 1.97 5 214 5 197 S 135 B-6 APPENDIX B The Buckle, Inc., 2020 Annual Report THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in Thousands) NET INCOME OTHER COMPREHENSIVE INCOME, NET OF TAX Change in unrealized loss on investments, net of tax of 50, 531, and 517, respectively Other comprehensive income COMPREHENSIVE INCOME Soc notes to consolidated financial statements February 1, 2020 Fiscal Years Ended February 2 2019 101,429 S 95.608 February 3, 2018 89,707 (7) S 101429 $ 95697 $ 19,700