Analyze american eagle outfitters by reviewing each category

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Q1 For American Eagle Outfitters, compute account receivable days _______ and inventory days _______. Enter these amounts in the appropriate location in the ratio chart on the previous page. Compared to the industry average, AEO collects accounts receivable (quicker / slower) and sells inventory (quicker / slower).

Q2 Compare The GAP and American Eagle Outfitters.

a. For profitability and efficiency ratios ... Circle the stronger ratio.

b. For liquidity and solvency ratios ... Circle the ratio reporting the least amount of risk.

Q3 Compare The GAP and American Eagle Outfitters to industry averages.

a. For profitability and efficiency ratios ... Cross out any company ratio weaker than the industry average.

b. For liquidity and solvency ratios ... Cross out any company ratio reporting higher risk.

Q4 Review the DUPONT ANALYSIS of ROE for American Eagle Outfitters.

a. Regarding overall profitability (ROA), the most significant influence can be attributed to (ROS / Asset Turnover / both contribute about equally).

b. Regarding ROE, the most significant influence can be attributed to (ROA / Financial Leverage / both contribute about equally).

Q5 Analyze American Eagle Outfitters by reviewing each category of ratio information presented on the previous page to answer the following questions.

a. PROFITABILITY RATIOS measure the overall performance of a firm. Is American Eagle Outfitters earning sufficient profits? (Yes / No) How can you tell?

b. EFFICIENCY RATIOS measure the effectiveness of managing cash, accounts receivable, inventory, PPE, and other assets. Is American Eagle Outfitters efficiently managing its assets?

(Yes / No) How can you tell?

Reference no: EM131782448

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