Instructions: Use the financial section of the January 29, 2011 (fiscal year 2010) 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. Use a different font to distinguish your answer from the question. All answers should be in your own words. Do not cut and paste from the annual report. Answers will be graded for content and written communication skills. Use complete sentences in answering questions where an explanation is This project is a group project (maximum 2 people). Each team should submit only one copy of the project on MOODLE and must include both names on this sheet. Not including both names and having duplicate answers would be considered "copying instead of "working together" Submit a finished file through MOODLE by December 3rd at 8:00PM. Your file should be named finalproject,lastname,lastname. Only files submitted by MOODLE INTERNAL EMAIL will be accepted. Earlier submission is encouraged. NO LATE SUBMISSIONS WILL BE ACCEPTED. MAKE A NOTATION HERE IF THE DOLLAR AMOUNTS ARE STATED IN THOUSANDS .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 Eagle's external auditors? s. What does the Report of Independent Registered Public Accounting firm indicate about the amounts represented in the company's financial statements? 6 What does the Report of Independent Registered Public Accounting firm indicate about American Eagle's internal controls? does American Eagle define cash equivalents? most recent years? By how much has cash 7. In the summary of significant accounting policies, how 8 What is the amount of cash reported in the most two 9 Determine the amount A eports for net cash flows 9 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) e 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. II. Where is accounts receivable reported? Explain why using net sales to calculate the receivables turnover ratio might not be a good indicator of a company's ability to efficiently manage receivables for a retail company like American Eagle, which typically sells clothing for cash. (2 pts) 12 Does American Eagle report an allowance for uncollectible accounts in the balance sheet? If so how much is reported for the most recent year? 13 When does the American Eagle recognize revenue? Is this consistent with the Revenue Recognition Principle? 14 How does American Eagle record the purchase ofa gift card? Is this way consistent with what you learned in ACC 200? (2 pts) is In the summary of significant accounting policies, what is American Eagle's procedure in accounting for inventory? 16 Calculate American Eagle's inventory turnover ratio and average days in inventory for the most recent year 17. Calculate American Eagle's gross profit ratio for each Is For the most recent year, calculate American Eagle's s Calculate the current ratio for the past two years. Did of the three years. Do you notice any trend? (2 pts) asset turnover ratio for the current year the current ratio improve or weaken in the more recent years? (2 pts) o What was the percentage change in (1) sales and (2) (2 net income from 2009 to 2010 and 2010 to 2011? pts) 2. 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) 22 Which depreciation method is used by American Eagle? What are the estimated useful lives for buildings, leasehold i and property and Which depreciation method is used by American Eagle? What are the estimated useful lives for buildings, leasehold improvements, and property and equipment? (2 pts) zs What is the net cost of Property and Equipment for 2011? What is the trend in property and equipment for the past two years? 24 What is the most common term for the leases? What are the future minimum rental commitments under operating leases at January 29, 2011? s. How much Goodwill does American Eagle have as of 1/29/2011? Specifically, how did American Eagle obtain its Goodwill? (2 pts) 2 Calculate the debt to equity ratio for the past two years. Did the ratio improve or weaken in the more recent years? (2 pts) 27. Calculate the return on equity for the current year zx What is the par value per share for the common stock? z9 What are the primary components of American Eagle's cost of goods sales? 0 What account(s) not discussed in ACC 2000 is included in Total Shareholder's Equity? 31. What amount of cash dividends were declared for the year ended 1/29/2011? 2 Did American Eagle repurchase any treasury stock during the year ended 1/29/2011? If yes, what How many outstanding shares does American Eagle have on January 29, 2011? 4 Does American Eagle have any Preferred Stock 3s. What method does American Eagle use for the Operating Section of the Statement of Cash Flows? expense for each of the three years 2009-2011? income and net operating cash flows during the most 6 What is the amount of depreciation and amortization 37 What is the largest reconcling item between net recent year? k What is the largest investing activity inflow during the most recent year? 39 What is the largest financing activity outflow during the most recent year? 40 What was in this 24. What is the most common term for the leases? What are the future minimum rental commitments under operating leases at January 29, 2011? 2s. How much Goodwill does American Eagle have as of 1/29/2011? Specifically, how did American Eagle obtain its Goodwill? (2 pts) 2 Calculate the debt to equity ratio for the past two years. Did the ratio improve or weaken in the more recent years? (2 pts) 2 Calculate the returm on equity for the current year zs 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 Shareholder's Equity? What amount of cash dividends were declared for the year ended 1/29/2011? Did American Eagle repurchase any treasury stock during the year ended 1/29/2011? If yes, what s. How many outstanding shares does American Eagle have on January 29, 2011? Does American Eagle have any Preferred Stock s 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 2009-2011? 7. What is the largest reconciling item between net income and net operating cash flows during the most recent year? 8. 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? Instructions: Use the financial section of the January 29, 2011 (fiscal year 2010) 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. Use a different font to distinguish your answer from the question. All answers should be in your own words. Do not cut and paste from the annual report. Answers will be graded for content and written communication skills. Use complete sentences in answering questions where an explanation is This project is a group project (maximum 2 people). Each team should submit only one copy of the project on MOODLE and must include both names on this sheet. Not including both names and having duplicate answers would be considered "copying instead of "working together" Submit a finished file through MOODLE by December 3rd at 8:00PM. Your file should be named finalproject,lastname,lastname. Only files submitted by MOODLE INTERNAL EMAIL will be accepted. Earlier submission is encouraged. NO LATE SUBMISSIONS WILL BE ACCEPTED. MAKE A NOTATION HERE IF THE DOLLAR AMOUNTS ARE STATED IN THOUSANDS .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 Eagle's external auditors? s. What does the Report of Independent Registered Public Accounting firm indicate about the amounts represented in the company's financial statements? 6 What does the Report of Independent Registered Public Accounting firm indicate about American Eagle's internal controls? does American Eagle define cash equivalents? most recent years? By how much has cash 7. In the summary of significant accounting policies, how 8 What is the amount of cash reported in the most two 9 Determine the amount A eports for net cash flows 9 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) e 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. II. Where is accounts receivable reported? Explain why using net sales to calculate the receivables turnover ratio might not be a good indicator of a company's ability to efficiently manage receivables for a retail company like American Eagle, which typically sells clothing for cash. (2 pts) 12 Does American Eagle report an allowance for uncollectible accounts in the balance sheet? If so how much is reported for the most recent year? 13 When does the American Eagle recognize revenue? Is this consistent with the Revenue Recognition Principle? 14 How does American Eagle record the purchase ofa gift card? Is this way consistent with what you learned in ACC 200? (2 pts) is In the summary of significant accounting policies, what is American Eagle's procedure in accounting for inventory? 16 Calculate American Eagle's inventory turnover ratio and average days in inventory for the most recent year 17. Calculate American Eagle's gross profit ratio for each Is For the most recent year, calculate American Eagle's s Calculate the current ratio for the past two years. Did of the three years. Do you notice any trend? (2 pts) asset turnover ratio for the current year the current ratio improve or weaken in the more recent years? (2 pts) o What was the percentage change in (1) sales and (2) (2 net income from 2009 to 2010 and 2010 to 2011? pts) 2. 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) 22 Which depreciation method is used by American Eagle? What are the estimated useful lives for buildings, leasehold i and property and Which depreciation method is used by American Eagle? What are the estimated useful lives for buildings, leasehold improvements, and property and equipment? (2 pts) zs What is the net cost of Property and Equipment for 2011? What is the trend in property and equipment for the past two years? 24 What is the most common term for the leases? What are the future minimum rental commitments under operating leases at January 29, 2011? s. How much Goodwill does American Eagle have as of 1/29/2011? Specifically, how did American Eagle obtain its Goodwill? (2 pts) 2 Calculate the debt to equity ratio for the past two years. Did the ratio improve or weaken in the more recent years? (2 pts) 27. Calculate the return on equity for the current year zx What is the par value per share for the common stock? z9 What are the primary components of American Eagle's cost of goods sales? 0 What account(s) not discussed in ACC 2000 is included in Total Shareholder's Equity? 31. What amount of cash dividends were declared for the year ended 1/29/2011? 2 Did American Eagle repurchase any treasury stock during the year ended 1/29/2011? If yes, what How many outstanding shares does American Eagle have on January 29, 2011? 4 Does American Eagle have any Preferred Stock 3s. What method does American Eagle use for the Operating Section of the Statement of Cash Flows? expense for each of the three years 2009-2011? income and net operating cash flows during the most 6 What is the amount of depreciation and amortization 37 What is the largest reconcling item between net recent year? k What is the largest investing activity inflow during the most recent year? 39 What is the largest financing activity outflow during the most recent year? 40 What was in this 24. What is the most common term for the leases? What are the future minimum rental commitments under operating leases at January 29, 2011? 2s. How much Goodwill does American Eagle have as of 1/29/2011? Specifically, how did American Eagle obtain its Goodwill? (2 pts) 2 Calculate the debt to equity ratio for the past two years. Did the ratio improve or weaken in the more recent years? (2 pts) 2 Calculate the returm on equity for the current year zs 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 Shareholder's Equity? What amount of cash dividends were declared for the year ended 1/29/2011? Did American Eagle repurchase any treasury stock during the year ended 1/29/2011? If yes, what s. How many outstanding shares does American Eagle have on January 29, 2011? Does American Eagle have any Preferred Stock s 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 2009-2011? 7. What is the largest reconciling item between net income and net operating cash flows during the most recent year? 8. 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