Refer to the financial statements of American Eagle Outfitters given in Appendix B, Abercrombie &

Fitch given in Appendix C, and the Industry Ratio Report given in Appendix D at the end of this book, or open file CP3-3.xls in the Annual Report Cases directory on the student CD-ROM.

Required: 1. What title does each company call its income statement? Explain what "Consolidated" means. 2. Which company had higher net income at February 3, 2001? 3. What does each company report were the primary causes of the change in sales from 1999 to 2000? (Hint: Look in the Management's Discussion and Analysis section of the annual report.) 4. Compute the total asset turnover ratio for both companies for 2000. Which company is utilizing assets more effectively to generate sales? Why do you think that? 5. Compare the total asset turnover ratio for both companies to the industry average. On average, are these two companies utilizing assets to generate sales better or worse than their competitors? 6. How much cash was provided by operating activities for 2000 by each company? What was the percentage change in operating cash flows (1) from 1999 to 2000 and (2) from 1998 to 1999 for each company? (Hint: [Current Year Amount - Prior Year Amount] / Prior Year.) 7. How much did each company show as federal taxes currently payable at February 3, 2001?

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