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 CP12-3.xls in the Annual Report Cases directory on the student CD-ROM.

Required: 1. Compute the return on assets ratio for both companies for the current year. What would you infer from the difference? Which company provided the higher return on its total investments during the current year? 2. Was the difference in ROA due primarily to profitability or efficiency differences? How did you know? 3. Was the return on assets for American Eagle Outfitters higher or lower than the industry average?

For Abercrombie & Fitch?