Financial information for American Eagle is presented in Appendix A, and financial information for Buckle is presented in Appendix B. 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 year. 2-b. Based on these calculations, which company appears to be more profitable 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 year. Round your intermediate calculations and final answers to 1 decimal place.) Risk Ratios AMERICAN EAGLE THE BUCKLE a. Receivables turnover ratio times times b. Average collection period i days days c. Inventory turnover ratio d. Average days in inventory e. Current ratio f. Acid-test ratio times times days days z-b. Based on these calculations, which company appears to be more profitable? Complete this question by entering your answers in the tabs below. Req 1a Req 1b Req 2a Req 2b Calculate the following risk ratios for both companies for the most recent year. (Use 365 days a y calculations and final answers to 1 decimal place.) Risk Ratios a. Receivables turnover ratio b. Average collection periodi c. Inventory turnover ratio d. Average days in inventory e. Current ratio f. Acid-test ratio g. Debt to equity ratio AMERICAN EAGLE THE BUCKLE times times days times days days times days % % Reg 1a Req 1b > www.compie youn 2-b. Based on these calculations, which company appears to be more profitable? Complete this question by entering your answers in the tabs below. Req la Req 1b Req 2a Req 2b Calculate the following profitability ratios for both companies for the most recent year. (Round your intermediate ca and final answers to 1 decimal place.) Profitability Ratios a. Gross profit ratio b. Return on assets c. Profit margin d. Asset turnover e. Return on equity AMERICAN EAGLE THE BUCKLE % % % % % % times times % < Req 1b Req 2b > (in thousands, except per share amounts) Assets Current assets: Cash and cash equivalents February 1, 2020 February 2 2019 361,930 $ 333,330 Short-term investments (available for sale) 55,000 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 50,985 42,747 3,328,679 1,903,378 Other assets Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Current portion of operating lease liabilities 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: Non-current operating lease liabilities 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, $0.01 par value; 600,000 shares authorized; 249,566 shares issued; 166,993 and 172,436 shares outstanding, respectively Contributed capital Accumulated other comprehensive loss, net of tax Retained earnings Treasury stock, 82,573 and 77,130 shares, respectively, at cost Total stockholders' equity Total liabilities and stockholders' equity 285,746 $ 240,671 299,161 9,514 20,064 43,537 82,173 56,974 53,997 56,824 145,740 751,756 542,645 1,301,735 27,335 73,178 1,329,070 73,178 2,496 2,496 577,856 574,929 (33,168) (34,832) 2,108,292 (1,407,623) 2,054,654 (1,309,692) 1,247,853 3,328,679 1,287,555 1,903,378 APPENDIX A American Eagle Outfitters, Inc., 2020 Annual Report A-5 AMERICAN EAGLE OUTFITTERS, INC. Consolidated Statements of Operations For the Years Ended February 1. 2020 February 2 2019 February 3, 2018 $ 4,308,212 $ 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 20,611 179,050 168,331 167,421 233,345 337,129 302,788 11,933 7,971 (15,615) 245,278 345,100 287,173 54,021 83,198 83,010 191,257 $ 261,902 S 204,163 $ 1.13 S 1.48 S 1.15 $ 1.12 $ 1.47 1.13 169,711 170,867 176,476 177,930 178,035 180,156 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 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 Refer to Notes to Consolidated Financial Statements CURRENT ASSETS Cash and cash equivalents Short-term investments (Notes B and C) Receivables Inventory Prepaid expenses and other assets Total current assets PROPERTY AND EQUIPMENT (Note E) Less accumulated depreciation and amortization 220,969 S 168,471 12,532 51,546 3,1361 7,089 121,258 125,190 20,935 18.136 378,830 370,432 452,205 452,187 (338,157) (321,505) 113,848 130,682 OPERATING LEASE RIGHT-OF-USE ASSETS (Note D) 350,088 LONG-TERM INVESTMENTS (Notes B and C) 15,863 18,745 OTHER ASSETS (Notes G and H) 9,261 7,443 Total acts LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable Accrued employee compensation Accrued store operating expenses Gift certificates redeemable Current portion of operating lease liabilities (Note Dy Income taxes payable (Note G) Total current liabiliti DEFERRED COMPENSATION (Note 1) NON-CURRENT OPERATING LEASE LIABILITIES (Note D) DEFERRED RENT LIABILITY Total liabilities COMMITMENTS (Notes and D) STOCKHOLDERS EQUITY (Note K Common stock, authorized 100,000,000 shares of 5.01 par value: 49.205.681 and 49,917,995 shares iswood and outstanding at February 1, 2030 and February 2, 2019, respectively Additional paid-in capital Retained earnings 867,890 $ 527,302 26,491 $ 29,000 22,929 17,837 21,452 17.992 15,319 16,634 87,314 2,751 5,142 172,641 90215 15,363 13,978 290,238 29229 478,742 133,425 492 152,258 236.398 148,564 244,823 Current portion of operating lease abilities (Note D) Income taxes payable (Note G) Total current liabilities DEFERRED COMPENSATION (Note 3) NON-CURRENT OPERATING LEASE LIABILITIES (Note D) DEFERRED RENT LIABILITY Total liabilities COMMITMENTS (Notes F and I) STOCKHOLDERS' EQUITY (Note K): Common stock, authorized 100,000,000 shares of $.01 par value; 49,205,681 and 49,017,395 shares issued and outstanding at February 1, 2020 and February 2, 2019, respectively Additional paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity See notes to consolidated financial statements. THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF INCOME (Amounts in Thousands Except Per Share Amounts) 87314 2,751 5,142 172,641 90,218 15,863 13,978 290,238 29,229 478,742 133,425 492 490 152,258 148,564 236,398 244,823 389,148 393,877 S 867,890 $ 527,302 APPENDIX B The Buckle, Inc., 2020 Annual Report B-5 Fiscal Years Ended February 1, February 2, February 3, SALES, Net of returns and allowances COST OF SALES (Including buying, distribution, and occupancy costs) Gross profit OPERATING EXPENSES: Selling General and administrative INCOME FROM OPERATIONS OTHER INCOME, Net INCOME BEFORE INCOME TAXES PROVISION FOR INCOME TAXES (Note G) NET INCOME February 1, 2020 Fiscal Years Ended February 2, 2019 February 3, 2018 $ 900,254 $ 885,496 S 913,380 522,780 519,423 533,357 377,474 366,073 380,023 204,480 202,032 206,068 41,497 43,113 39.877 245,977 245,145 245,945 131,497 120,928 134,078 6,210 5,716 5,407 137,707 126,644 139,485 33,278 31,036 49,778 104,429 S 95,608 S 89,707 EARNINGS PER SHARE (Note 1) Basic 2.15 S 197 S 1.86 Diluted 2.14 ST 197 1.85 See notes to consolidated financial statements. 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 See notes to consolidated financial statements February 1, 2020 Fiscal Years Ended February 2, 2019 February 3, 2018 104,429 $ 95,608 $ 85/07 89 (7) 89 (7) 104,429 S 95,697 $ 89,700