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

& Fitch given in Appendix C. and the Industry Ratio Report given in Appendix D at the end of this book or open file CP7-3.xls in the Annual Report Cases directory on the student CD-ROM.

Required: 1. Compute the inventory turnover ratio for both companies for the current year. What would you infer from the difference? 2. 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?