You have just been hired as a financial analyst at College Fund in New York. Your responsibility is to analyze potential investment opportunities and present your research findings to the fund manager. The fund manager has assigned you to analyze the financial positions of two successful retailer companies in USA: American Eagle Outfitters and The Buckle Company. The financial statements issued by American Eagle Outfitters and The Buckle Company in 2017 are in Appendix A and B of the textbook.

You are required to write a two-page, double-spaced memo analyzing the financial statements.

Your report should include, but not limited to, the discussions of the questions below that the fund manager has raised. Use these questions as a way to organize your thoughts as you prepare the report. Submit a hard copy of your memo to the fund manager before the due date specified on the syllabus. No late memo will be accepted.

You have just been hired as a financial analyst at College Fund in New York. Your responsibility is to analyze potential investment opportunities and present your research findings to the fund manager. The fund manager has assigned you to analyze the financial positions of two successful retailer companies in USA: American Eagle Outfitters and The Buckle Company. The financial statements issued by American Eagle Outfitters and The Buckle Company in 2017 are in Appendix A and B of the textbook.

Part I: American Eagle Outfitters, Inc.

1. For the most recent year, what amount does American Eagle report for current assets? What assets are listed as current assets? What is the ratio of current assets to total assets?

2. For the most recent year, what amount does American Eagle report for current liabilities? What liabilities are listed as current liabilities? What is the ratio of current liabilities to total liabilities?

3. List any current assets or current liabilities that likely relate to adjusting entries.

4. What is the change in retained earnings reported in the balance sheet?

5. For the most recent year, what is the amount of net income reported in the income statement?

Part II: The Buckle Inc.

1. For the most recent year, what amount does The Buckle, Inc., report for current assets? What assets are listed as current assets? What is the ratio of current assets to total assets?

2. For the most recent year, what amount does The Buckle, Inc., report for current liabilities? What liabilities are listed as current liabilities? What is the ratio of current liabilities to total liabilities?

3. For the most recent year, what is the change in retained earnings reported in the balance sheet?

4. For the most recent year, what is the amount of net income reported in the income statement?

5. Using your answers in parts 3 and 4 above, calculate the amount of dividends paid during the year. Verify your answer by looking at the retained earnings column in the statement of stockholders' equity.

Part III: Comparative Analysis

1.Determine which company maintains a higher ratio of current assets to total assets. How might this be an advantage for the company?

2.Determine which company maintains a higher ratio of current liabilities to total liabilities. How might this be a disadvantage for the company?

3.The dividend payout ratio equals dividends paid during the year divided by net income. Determine which company has a higher dividend payout ratio. Why might this be the case?