To complete the required items below, refer to the following:

The financial statements of American Eagle Outfitters for the year ended January 28, 2012 given in Appendix B at the end of the text(and also provided on D2L).

The financial statements of Urban Outfitters for the year ended January 31, 2012 given in Appendix C at the end of the text (and also provided on D2L).

The Industry Ratio Report provided in Appendix D at the end of the text (and also provided on D2L).

Required:

How much inventory does American Eagle hold at the end of the most recent period (January 28, 2012)?

Estimate the amount of merchandise that American Eagle purchased during the year ended January 28, 2012 (Hint: Use the cost of goods sold equation and consider costs of goods sold to include certain buying, occupancy, and warehousing expenses).

What method does the company use to determine the cost of it inventory?

Compute the inventory turnover ratio for both American Eagle and Urban Outfitters for the year ending in January 2012. What do you infer from the difference?

Compare the inventory turnover ratio for both companies to the industry average. Are these two companies doing better or worse than the industry average in turning over their inventory?

INDUSTRY RATIO REPORT Retail Family Clothing Stores Activity 4.92 Inventory Turnover Days to Sell Inventory Receivables Turnover Average Collection Period Fixed Asset Turnover Total Asset Turnover Accounts Payable Turnover 100.82 days 97.49 12.63 days 7.43 1.75 11.55