**HELP NEEDED, URGENT** Financial Analysis on American Eagle Outfitters and The Buckle Inc.

Conduct a comprehensive ratio analysis of each company, using the income statement and balance sheet of each company and any other available information. Compare the results. Round to one decimal place and consider changes of 0.1 or less to be indeterminate. Show me the ratio formula, then show the calculation. Evaluate the results from your calculations and analyses and form conclusions regarding your understanding of the companies compared, which is better to invest in?

1) Prepare an Operating Asset Management Analysis by calculating for each company the :

a) current ratio b) quick ratio c) receivables turnover d) days sales uncollected e) inventory turnover

f) days inventory on hand g) payables turnover h) days payable i) financing period

2) Prepare a Profitability And Total Asset Management Analysis by calculating for each company the:

a) profit margin b) asset turnover c) return on assets

3) Prepare a Financial Risk Analysis by calculating for each company the:

a) debt to equity ratio b) return on equity c) interest coverage ratio*

4) Prepare a Liquidity Analysis by calculating for each company the cash flow yield

a) Cash flows to sales b) Cash flows to assets c) Free cash flows

5) Prepare An Analysis Of Market Strength by calculating for each company the:

a) price/earnings ratio b) dividend yield

American Eagle Outfitters:

The Buckle Inc

A-4 APPENDIX A American Eagle Outfitters, Inc., 2014 Annual Report AMERICAN EAGLE OUTFITTERS, INC. CONSOLIDATED BALANCE SHEETS January 31, 2015 February 1, 2014 $ 410,697 278,972 67,894 73,848 59,102 890,513 694,856 47,206 13,096 14,035 37,202 $1,696,908 $ 418,933 10,002 291,541 73.882 88,155 45,478 927,991 632,986 49.271 13.530 24.835 45,551 $1,694,164 (In thousands, except per share amounts) Assets Current assets: Cash and cash equivalents Short-term investments Merchandise inventory Accounts receivable Prepaid expenses and other Deferred income taxes Total current assets Property and equipment, at cost, net of accumulated depreciation Intangible assets, at cost, net of accumulated amortization Goodwill Non-current deferred income taxes Other assets Total assets 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 Non-current accrued income taxes Other non-current liabilities Total non-current liabilities Commitments and contingencies Stockholders' equity: Preferred stock, S0.01 par value; 5,000 shares authorized; none issued and outstanding Common stock, S0.01 par value; 600,000 shares authorized; 249,566 shares issued; 194,516 and 193,149 shares outstanding, respectively Contributed capital Accumulated other comprehensive income Retained earnings Treasury stock, 55,050 and 56,417 shares, respectively, at cost Total stockholders' equity Total liabilities and stockholders' equity $ 191,146 44,884 78,567 33.110 47.888 12.969 50,529 459,093 S 203.872 23.560 76,397 5,778 47.194 13.293 45,384 415,478 54,516 10.456 33.097 59,510 16,543 36,455 98.069 112.508 2,496 569,675 (9.944) 1,543,085 (965,566) 1,139,746 $1.696.908 2.496 573,008 12.157 1,569.851 (991,334) 1,166,178 $1,694,164 Refer to Notes to Consolidated Financial Statements APPENDIX A American Eagle Outfitters, Inc., 2014 Annual Report A-5 AMERICAN EAGLE OUTFITTERS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS January 31, 2015 $3,282,867 2,128,193 For the Years Ended February 1, 2014 $3,305,802 2,191,803 1,113,999 796,505 February 2, 2013 $3,475.802 2,085,480 1,390,322 834,601 1,154,674 (In thousands, excepe per share amounts) Total net revenue Cost of sales, including certain buying, occupancy and warehousing expenses Gross profit Selling, general and administrative expenses Restructuring charges Loss on impairment of assets Depreciation and amortization expense Operating income Other income, net Income before income taxes Provision for income taxes Income from continuing operations Loss from discontinued operations, net of tax Net income Basic income per common share: Income from continuing operations Loss from discontinued operations Basic net income per common share Diluted income per common share: Income from continuing operations Loss from discontinued operations Diluted net income per common share Weighted average common shares outstanding basic Weighted average common shares outstanding diluted 806,498 17,752 33,468 141,191 155.765 3,737 159,502 70,715 88,787 (8,465) 80,322 44,465 131,974 141,055 1,022 142.077 59,094 82,983 34,869 126,246 394,606 7,432 402,038 137,940 264,098 (31,990) 232,108 82.983 S S 0.43 S 1.35 0.46 (0.04) 0.42 (0.16) 1.19 S 0.43 $ S 0.43 S 0.46 (0.04) 0.42 194,437 195,135 S 0.43 192.802 194.475 1.32 (0.16) 1.16 196,211 200,665 A-6 APPENDIX A American Eagle Outfitters, Inc., 2014 Annual Report AMERICAN EAGLE OUTFITTERS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME January 31, For the Years Ended February 1, February 2, 2015 $ 80,322 2014 $ 82,983 2013 $ 232,108 (In thousands) Net income Other comprehensive (loss) income: Foreign currency translation (loss) gain Other comprehensive (loss) income Comprehensive income (22,101) (22,101) $ 58,221 (17,140) (17,140) $ 65,843 638 638 $232,746 APPENDIX A American Eagle Outfitters, Inc., 2014 Annual Report A-7 AMERICAN EAGLE OUTFITTERS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Shares Outstanding (1) 193.848 Accumulated Other Comprehensive Income (Loss) Common Stock $ 2,496 Contributed Capital $ 552,797 76,108 Retained Earnings $1,771,464 Treasury Stock(2) $(938,565) 28.659 Stockholders Equity $1,416,851 76,108 Repurchase (in thousands, except per share amounts) Balance at January 28, 2012 Stock awards Repurchase of common stock as part of publicly announced programs of common stock from employees Reissuance of treasury stock De Other comprehensive income Cash dividends and dividend equivalents ($2.05 (8,407) (280) 7,443 (173,554) (4.125) (11,054) (36,213) 232,108 125,515 (173,554) (4,125) 78.248 232,108 638 Net income 638 per share) (414,301) $1,553,058 192.604 9.214 S 627,065 1,184 $ 2,496 $(990,729) S (405,087) 29,297 $1,221,187 1.184 (1.600) (1.059) 3,204 (33,051) (23,385) 55,831 (56,706) 6,090 82,983 (33,051) (23,385) 5,215 82.983 (17,140) (17,140) Balance at February 2, 2013 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 income Cash dividends and dividend equivalents (S0.375 per share) Balance at February 1, 2014 Stock awards Repurchase of common stock from employees Reissuance of treasury stock Net income Other comprehensive income Cash dividends and dividend equivalents (50.50 per share) Balance at January 31, 2015 193,149 S 2,496 1,465 (72,280 S 573,008 S1,569.851 12,372 $(991,334) S 12,157 (517) 1.884 (7,464) 33,232 (70,815) $1,166,178 12,372 (7,464) 7,741 80,322 (22.101) (17.988) (7,503) 80,322 (22.101) 2.283 $ 2,496 S 569,675 (99,585) $1,543,085 $(965,566) S (97,302) (9,944) $1,139,746 194,516 (1) 600,000 authorized, 249,566 issued and 194,516 outstanding, $0.01 par value common stock at January 31, 2015; 600,000 authorized, 249,566 issued and 193,149 outstanding, $0.01 par value common stock at February 1, 2014; 600,000 authorized, 249,566 issued and A-8 A-8 APPENDIX A American Eagle Outfitters, Inc., 2014 Annual Report A , AMERICAN EAGLE OUTFITTERS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS January 31, For the Years Ended February 1, 2014 February 2. 2 2013 2015 s S 82.983 80,322 8,465 88,787 $ 232.108 31,990 $ 264,098 S S 82.983 134,047 (6,541) 142,351 16,070 (2.279) (495) 33,468 128,397 66,349 (30,647) 20,100 1,378 44,465 100 34,869 8.586 3,084 14,282 6,612 (5.280 1.238 (4,528) 20,716 24,826 (9,012) 249.639 338,426 40,148 (29,511) (10,844) (36,089) 28,568 1.269 583 (42.465) (25.840) 27.605 146,873 229,856 35.202 (6,664) 404 (8.165) (10,468) 1,473 (11,073) 23.018 (7.408) 20.186 235,573 499,671 (In thousands) Operating activities: Net income Loss from discontinued operations, net of tax Income from continuing operations Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization Share-based compensation Deferred income taxes Foreign currency transaction loss (gain) Loss on impairment of assets Changes in assets and liabilities: Merchandise inventory Accounts receivable Prepaid expenses and other Other assets Accounts payable Unredeemed gift cards and gift certificates Deferred lease credits Accrued compensation and payroll taxes Accrued income and other taxes Accrued liabilities Total adjustments Net cash provided by operating activities from continuing operations Investing activities: Capital expenditures for property and equipment Purchase of long-lived assets in a business combination Acquisition of intangible assets Purchase of available-for-sale securities Sale of available-for-sale securities Net cash (used for) provided by investing activities from continuing operations Financing activities: Payments on capital leases and other Repurchase of common stock as part of publicly announced programs Repurchase of common stock from employees Net proceeds from stock options exercised Excess tax benefit from share-based payments Cash used to net settle equity awards Cash dividends paid Net cash used for financing activities from continuing operations Effect of exchange rates on cash Cash flows of discontinued operations Net cash provided by (used for) operating activities Net cash used for investing activities Net cash used for financing activities Effect of exchange rates on cash Net cash provided by (used for) discontinued operations Net decrease in cash and cash equivalents Cash and cash equivalents - beginning of period Cash and cash equivalents -- end of period (245,002) (93.939) (1.264) (278,499) (20.751) (6,835) (52,065) 162,785 (195,365) 10,002 (236,264) (1.125) (111.086) 15.500 (190,650) ( (7,143) (2.839) (7,464) 7.305 742 (33,051) (23,386) 6,197 8,833 (3.066) (173,554) (4,125) 76,401 13.279 (72.280) (97,224) (103,784) (7.578 (403.490) (494.55) (116,526) (8151) 504 963 (24,616) (780) 963 (8,237 418,933 410,697 (90,186) 509,119 418,933 (25,396) (210.426) 719,545 509,119 APPENDIX B The Buckle, Inc., 2014 Annual Report B-7 THE BUCKLE, INC. . CONSOLIDATED BALANCE SHEETS (Amounts in Thousands Except Share and Per Share Amounts) January 31, 2015 February 1, 2014 ASSETS s CURRENT ASSETS: Cash and cash equivalents Short-term investments (Notes A, B, and C) Receivables Inventory Prepaid expenses and other assets (Note F) Total current assets 133,708 25.857 8,567 129.921 26,536 324,589 164.868 20,197 4318 124.141 28,613 142137 PROPERTY AND EQUIPMENT (Note D) Less accumulated depreciation and amortization 427,915 (255.252) 172.663 393,656 (235.087) 158 569 LONG-TERM INVESTMENTS (Notes A, B, and C) OTHER ASSETS (Note G) 43.69 2,043 43,436 2.151 542.993 S 546.293 LIABILITIES AND STOCKHOLDERS' EQUITY s 35.714 36,920 CURRENT LIABILITIES: Accounts payable Accrued employee compensation Accrued store operating expenses Gift certificates redeemable Income taxes payable Total current liabilities 37,147 36,933 9.983 23,131 16.187 123.381 23.992 15.661 122.271 12,797 37.564 DEFERRED COMPENSATION (Note I) DEFERRED RENT LIABILITY OTHER LIABILITIES (Note F) Total liabilities 14.261 40.566 10,617 187,715 10,621 184.363 COMMITMENTS (Notes E and H) 484 STOCKHOLDERS' EQUITY (Note )): Common stock, authorized 100,000,000 shares of 5.01 par value: 48,379,613 and 48,336,392 shares issued and outstanding at January 31, 2015 and February 1, 2014, respectively Additional paid.in capital Retained earnings Accumulated other comprehensive loss Total stockholders' equity 131.112 224,111 43 124,134 238,151 (838) 361.930 (429) 355.278 542,993 S 546,293 See notes to consolidated financial statements B-8 APPENDIX B The Buckle, Inc., 2014 Annual Report , THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF INCOME (Amounts in Thousands Except Per Share Amounts) January 31, 2015 Fiscal Years Ended February 1, 2014 February 2, 2013 SALES, Net of retums and allowances of $110,793, S108,851, and $106,612, respectively $ 1.153.142 1,128,001S 1.124,007 COST OF SALES (Including buying, distribution, and occupancy costs) 645.810 628,856 624,692 Gross profit 507332 499.145 499,315 OPERATING EXPENSES: Selling General and administrative 212.688 37.671 250,359 206,893 35.25 201,963 39,177 242,151 241.140 INCOME FROM OPERATIONS 256,973 256,994 258,175 OTHER INCOME, Net (Note A) 2.723 3.462 3,524 INCOME BEFORE INCOME TAXES 259,696 260,456 261.699 PROVISION FOR INCOME TAXES (Note F) 97,132 97,872 97,394 NET INCOME 162,564 S 162 584 164,305 EARNINGS PER SHARE (Note KX (K) Basic 3.39 3.41 S 3.47 Diluted S 3.38 $ 3.395 3.44 See notes to consolidated financial statements. AUG 1 5 G 6 G BE APPENDIX B The Buckle, Inc., 2014 Annual Report B-9 THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in Thousands) January 31, 2015 Fiscal Years Ended February 1, 2014 February 2. 2013 NET INCOME 162,564 162,584 5 164,305 OTHER COMPREHENSIVE INCOME, NET OF TAX: Change in unrealized loss on investments, net of tax of S240, S56, and S(138), respectively Other comprehensive income 400 96 (235) 96 (235) COMPREHENSIVE INCOME 162.973 162.680 164,070 See notes to consolidated financial statements. B-10 APPENDIX B The Buckle, Inc., 2014 Annual Report THE BUCKLE.INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Amounts in Thousands Except Share and Per Share Amounts) Number of Shares Additional Paid-in Capital Commen Stock Accumulated Other Comprehensive Los Retained Earnings Total BALANCE, January 28, 2012 47.432.089S 474 S 100,333 S 263,039 S (699) s 363,147 164_305 (254,633) 164,305 (254,613 846 4 377.520 249.660 842 (3) 3 Net income Dividends paid on common stock, (55.30 per share) Common stock issued on exercise of stock options Issuance of non-vested stock, net of forfeitures Amortization of non-vested stock grants, net of forfeitures Income tax benefit related to exercise of stock options Change in unrealized loss on investments, net of tax 8,388 7,831 8,388 7,831 (235) (235) BALANCE. February 2, 2013 48,059,269 $ 481 S 117.391 S 172,711 s 1934) $ 289,649 162.584 197.144) 162.584 197,144) 25.555 251.568 2 (2) Net income Dividends paid on common stock. (S2.02 per share) Common stock issued on exercise of stock options Issuance of non-vested stock, net of forfeitures Amortization of non-vested stock grants, net of forfeitures Income tax benefit related to exercise of stock options Change in unrealized loss on investments, net of tax - 5.066 1.679 5.066 1.679 96 96 BALANCE, February 1, 2014 48,336,392 $ 483 s 124.134 s 238.151 S (838) 361,930 162,564 (176,604) - 162,564 (176,604) 70 70 17.091 26,130 1 Net income Dividends paid on common stock. (53.66 per share) Commen stock issued on exercise of stock options Issuance of non-vested stock, net of forfeitures Amortization of non-vested stock grants, net of forfeitures Income tax benefit related to exercise of stock options Change in unrealized loss on investments, net of tax 6,013 896 6,013 896 409 409 BALANCE, January 31, 2015 48,379,613 484 131,112 5 224.111 (429) 355.278 See notes to consolidated financial statements. . APPENDIX B The Buckle, Inc., 2014 Annual Report B-11 THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in Thousands) January 31, 2015 Fiscal Years Ended February 1, 2014 February 2, 2013 S 162.564 S 162,584 $ 164.305 31,679 6,013 (1.675) 1.163 32.631 5.066 (2,086) 988 33,834 8.388 (1.939) 1,528 CASH FLOWS FROM OPERATING ACTIVITIES: Net income Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization Amortization of non-vested stock grants, net of forfeitures Deferred income taxes Other Changes in operating assets and liabilities: Receivables Inventory Prepaid expenses and other assets Accounts payable Accrued employee compensation Accrued store operating expenses Gift certificates redeemable Income taxes payable Deferred rent liabilities and deferred compensation (2.134) (5,780) 3.508 (2,915) (13) 1 861 (1.970) 4,466 (989) (20.288) (2.255) 2.738 (5.250) (138) 910 (2.699) 2.814 596 356 (10.281) 6.534 (671) (1.004) 1,935 14.897 2.463 Net cash flows from operating activities 195.768 174.026 220,941 (45.454) CASH FLOWS FROM INVESTING ACTIVITIES: : Purchases of property and equipment Proceeds from sale of property and equipment Other Purchases of investments Proceeds from sales/matunities of investments 108 (43,404) ( 38,131 (28,811) 11 112 (32,314) 30,981 (30.297) 1.140 130 (29.933) 37.294 Net cash flows from investing activities (50.619) (30,021) (21.666) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from the exercise of stock options Excess tax benefit from stock option exercises Payment of dividends 70 225 (176,604) 399 846 5.609 (254,633) 97,144 Net cash flows from financing activities (176,309) (96,745) (248,178) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (31,160) 47,260 (48,903) CASH AND CASH EQUIVALENTS, Beginning of year 164,868 117,608 166,511 CASH AND CASH EQUIVALENTS, End of year 133,708 S 164,868 S 117,608 See notes to consolidated financial statements