Instructions: Use the financial section of the February 1st, 2020 (fiscal year 2019, filing date March 12th 2020) annual report of American Eagle Outfitters, Inc. to answer the following questions. The annual report can be found at WWW.SEC.GOV. The answers should immediately follow each question and show any necessary calculations.

What are the amounts American Eagle reports for total assets, total liabilities, and total stockholders equity in the balance sheet for the most recent year. Verify that the basic accounting equation balances.

American Eagle refers to its income statement using another name. What is it?

What type of income statement does American Eagle issue (multi-step or single step)? Explain.

Who were American Eagles external auditors?

What does the Report of Independent Registered Public Accounting firm indicate about the amounts represented in the companys financial statements?

What does the Report of Independent Registered Public Accounting firm indicate about American Eagles internal controls?

In the summary of significant accounting policies, how does American Eagle define cash equivalents?

What is the amount of cash reported in the most two most recent years? By how much has cash increased/decreased?

Determine the amount American Eagle reports for net cash flows from operating, investing, and financing activities in its statement of cash flow. (Note: Include any effect of exchange rates on cash as an additional cash flow. In addition, include net cash used for discontinued operations) Compare your answers to question 8. (2 pts)

What are the net sales for the past three years? Determine whether the trend in net sales is increasing or decreasing for the past three years.

Where is accounts receivable reported? Explain why using net sales to calculate the receivables turnover ratio might not be a good indicator of a companys ability to efficiently manage receivables for a retail company like American Eagle, which typically sells clothing for cash. (2 pts)

Does American Eagle report an allowance for uncollectible accounts in the balance sheet? If so, how much is reported for the most recent year?

When does the American Eagle recognize revenue? Is this consistent with the Revenue Recognition Principle?

How does American Eagle record the purchase of a gift card? Is this way consistent with what you learned in ACC 2000? (2 pts)

In the summary of significant accounting policies, what is American Eagles procedure in accounting for inventory?

Calculate American Eagles inventory turnover ratio and average days in inventory for the most recent year.

Calculate American Eagles gross profit ratio for each of the three years. Do you notice any trend? (2 pts)

For the most recent year, calculate American Eagles asset turnover ratio for the current year.

Calculate the current ratio for the past two years. Did the current ratio improve or weaken in the more recent years? (2 pts)

What was the percentage change in (1) sales and (2) net income from year ended Feb 3rd 2018 to year ended Feb 2nd 2019 and year ended Feb 2nd 2019 to Feb 1st 2020? (2 pts)

If American Eagle used $100 million in cash investments to pay $100 million in accounts payable, how would its current ratio and working capital change? Show you calculations. (2 pts)

Which depreciation method is used by American Eagle? What are the estimated useful lives for buildings, leasehold improvements, fixtures and equipment and information technology? (2 pts)

What is the net cost of Property and Equipment for year ended on Feb 1st 2020? What is the trend in property and equipment for the past two years?

What is the most common term for the leases? What are the primarily of future minimum lease commitments related to store operating leases under operating leases at Feb 1, 2020?

How much Goodwill and Goodwill impairment does American Eagle have as of 2/1/2020? Specifically, how did American Eagle obtain its Goodwill? (2 pts)

Calculate the debt to equity ratio for the past two years. Did the ratio improve or weaken in the more recent years? (2 pts)

Calculate the return on equity for the current year.

What is the par value per share for the common stock?

What are the primary components of American Eagle's cost of goods sales?

What account(s) not discussed in ACC 2000 is included in Total Shareholders Equity?

What amount of cash dividends were declared for the year ended 2/1/2020?

Did American Eagle repurchase any treasury stock during the year ended 2/1/2020? If yes, what amount?

How many outstanding shares does American Eagle have on 2/1/2020?

Does American Eagle have any Preferred Stock outstanding?

What method does American Eagle use for the Operating Section of the Statement of Cash Flows?

What is the amount of depreciation and amortization expense for each of the three years 2018-2020?

What is the largest reconciling item between net income and net operating cash flows during the most recent year?

What is the largest investing activity inflow during the most recent year?

What is the largest financing activity outflow during the most recent year?

What was the most interesting thing you read in this annual report?