| 1 |
| | | | | AMERICAN EAGLE OUTFITTERS, INC. |
| | | | | CONSOLIDATED BALANCE SHEETS |
| | | | | (Dollars in thousands) |
| | | | | (unaudited) | | | | | | | | | | | AMERICAN EAGLE OUTFITTERS, INC. |
| | | | | | | | | | | | | | | | COMMON-SIZE BALANCE SHEET |
| | | August 1,2020 | | | | February 1,2020 | | | August 3,2019 |
| | | | | | | | | | | | | | | | | August 1,2020 | | | | February 1,2020 | | | August 3,2019 |
| | ASSETS | | | | | | | | | | | | | | ASSETS |
| | Cash and cash equivalents | $ | 898,787.00 | | | $ | 361,930.00 | | $ | 267,166.00 | | | | | Cash and cash equivalents | 24.77% | | | | 10.87% | | | 7.95% |
| | Short-term investments | | - | | | | 55,000.00 | | | 50,000.00 | | | | | Short-term investments | - | | | | 1.65% | | | 1.49% |
| | Merchandise inventory | | 421,196.00 | | | | 446,278.00 | | | 534,762.00 | | | | | Merchandise inventory | 11.61% | | | | 13.41% | | | 15.92% |
| | Accounts receivable | | 107,243.00 | | | | 119,064.00 | | | 98,604.00 | | | | | Accounts receivable | 2.96% | | | | 3.58% | | | 2.94% |
| | Prepaid expenses and other | | 155,141.00 | | | | 65,658.00 | | | 69,541.00 | | | | | Prepaid expenses and other | 4.28% | | | | 1.97% | | | 2.07% |
| | Total current assets | | 1,582,367.00 | | | | 1,047,930.00 | | | 1,020,073.00 | | | | | Total current assets | 43.62% | | | | 31.48% | | | 30.37% |
| | Property and equipment, net | | 659,351.00 | | | | 735,120.00 | | | 754,031.00 | | | | | Property and equipment, net | 18.17% | | | | 22.08% | | | 22.45% |
| | Operating lease right-of-use assets | | 1,271,491.00 | | | | 1,418,916.00 | | | 1,462,544.00 | | | | | Operating lease right-of-use assets | 35.05% | | | | 42.63% | | | 43.54% |
| | Intangible assets, including goodwill | | 51,432.00 | | | | 53,004.00 | | | 56,326.00 | | | | | Intangible assets, including goodwill | 1.42% | | | | 1.59% | | | 1.68% |
| | Non-current deferred income taxes | | 30,224.00 | | | | 22,724.00 | | | 16,759.00 | | | | | Non-current deferred income taxes | 0.83% | | | | 0.68% | | | 0.50% |
| | Other assets | | 33,111.00 | | | | 50,985.00 | | | 49,426.00 | | | | | Other assets | 0.91% | | | | 1.53% | | | 1.47% |
| | Total Assets | $ | 3,627,976.00 | | | $ | 3,328,679.00 | | $ | 3,359,159.00 | | | | | Total Assets | 100.00% | | | | 100.00% | | | 100.00% |
| | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | | | | | | LIABILITIES AND STOCKHOLDERS' EQUITY |
| | Accounts payable | $ | 295,296.00 | | | $ | 285,746.00 | | $ | 316,995.00 | | | | | Accounts payable | 8.14% | | | | 8.58% | | | 9.44% |
| | Current portion of operating lease liabilities | | 348,921.00 | | | | 299,161.00 | | | 279,207.00 | | | | | Current portion of operating lease liabilities | 9.62% | | | | 8.99% | | | 8.31% |
| | Accrued income and other taxes | | 12,783.00 | | | | 9,514.00 | | | 17,754.00 | | | | | Accrued income and other taxes | 0.35% | | | | 0.29% | | | 0.53% |
| | Accrued compensation and payroll taxes | | 66,131.00 | | | | 43,537.00 | | | 54,683.00 | | | | | Accrued compensation and payroll taxes | 1.82% | | | | 1.31% | | | 1.63% |
| | Dividends payable | | 22,837.00 | | | | - | | | - | | | | | Dividends payable | 0.63% | | | | - | | | - |
| | Unredeemed gift cards and gift certificates | | 43,165.00 | | | | 56,974.00 | | | 34,742.00 | | | | | Unredeemed gift cards and gift certificates | 1.19% | | | | 1.71% | | | 1.03% |
| | Other current liabilities and accrued expenses | | 51,281.00 | | | | 56,824.00 | | | 60,265.00 | | | | | Other current liabilities and accrued expenses | 1.41% | | | | 1.71% | | | 1.79% |
| | Total current liabilities | | 840,414.00 | | | | 751,756.00 | | | 763,646.00 | | | | | Total current liabilities | 23.16% | | | | 22.58% | | | 22.73% |
| | Long-term debt, net | | 516,953.00 | | | | - | | | - | | | | | Long-term debt, net | 14.25% | | | | - | | | - |
| | Non-current operating lease liabilities | | 1,253,105.00 | | | | 1,301,735.00 | | | 1,338,634.00 | | | | | Non-current operating lease liabilities | 34.54% | | | | 39.11% | | | 39.85% |
| | Other non-current liabilities | | 19,604.00 | | | | 27,335.00 | | | 28,302.00 | | | | | Other non-current liabilities | 0.54% | | | | 0.82% | | | 0.84% |
| | Total non-current liabilities | | 1,789,662.00 | | | | 1,329,070.00 | | | 1,366,936.00 | | | | | Total non-current liabilities | 49.33% | | | | 39.93% | | | 40.69% |
| | | | | | | | | | | | | | | | | | | | | 0.00% | | | 0.00% |
| | Commitments and contingencies | | - | | | | - | | | - | | | | | Commitments and contingencies | - | | | | - | | | - |
| | Preferred stock | | - | | | | - | | | - | | | | | Preferred stock | - | | | | - | | | - |
| | Common stock | | 2,496.00 | | | | 2,496.00 | | | 2,496.00 | | | | | Common stock | 0.07% | | | | 0.07% | | | 0.07% |
| | Contributed capital | | 647,284.00 | | | | 577,856.00 | | | 568,413.00 | | | | | Contributed capital | 17.84% | | | | 17.36% | | | 16.92% |
| | Accumulated other comprehensive income | | (47,991.00) | | | | (33,168.00) | | | (36,630.00) | | | | | Accumulated other comprehensive income | -1.32% | | | | -1.00% | | | -1.09% |
| | Retained earnings | | 1,807,687.00 | | | | 2,108,292.00 | | | 2,070,077.00 | | | | | Retained earnings | 49.83% | | | | 63.34% | | | 61.62% |
| | Treasury stock | | (1,411,576.00) | | | | (1,407,623.00) | | | (1,375,779.00) | | | | | Treasury stock | -38.91% | | | | -42.29% | | | -40.96% |
| | Total stockholders' equity | | 997,900.00 | | | | 1,247,853.00 | | | 1,228,577.00 | | | | | Total stockholders' equity | 27.51% | | | | 37.49% | | | 36.57% |
| | Total Liabilities and Stockholders' Equity | $ | 3,627,976.00 | | | $ | 3,328,679.00 | | $ | 3,359,159.00 | | | | | Total Liabilities and Stockholders' Equity | 100.00% | | | | 100.00% | | | 100.00% |
| 2 |
| a | Current Ratio= current assets/current liabilities | | 1.88 | | | | 1.39 | | | 1.34 |
| b | Acid-test ratio=current assets-inventories/current liabilities | | 1.38 | | | | 0.80 | | | 0.64 |
| c | Cash ratio=cash and cash equivalents/current liabilities | | 1.07 | | | | 0.48 | | | 0.35 |
| d | Debt ratio=Total liabilities/Shareholder's equity | | 3.64 | | | | 2.67 | | | 2.73 |
| 3 |
| | | | AMERICAN EAGLE OUTFITTERS, INC. |
| | | | CONSOLIDATED INCOME STATEMENT |
| | | | (Dollars in thousands) | | | | | | | | AMERICAN EAGLE OUTFITTERS, INC. |
| | | | | | | | | | | | COMMON-SIZE INCOME STATEMENT |
| | | | August 1,2020 | | | | | | August 3,2019 | | | August 1,2020 | | August 3,2019 |
| | Total net revenue | $ | 1,435,202.00 | | | | | $ | 1,927,169.00 | | Total net revenue | 100.00% | | 100.00% |
| | Cost of sales, including certain buying, occupancy and warehousing expenses | | 1,141,697.00 | | | | | | 1,219,677.00 | | Cost of sales, including certain buying, occupancy and warehousing expenses | 79.55% | | 63.29% |
| | Gross profit | | 293,505.00 | | | | | | 707,492.00 | | Gross profit | 20.45% | | 36.71% |
| | Selling, general and administrative expenses | | 411,908.00 | | | | | | 483,791.00 | | Selling, general and administrative expenses | 28.70% | | 25.10% |
| | Impairment, restructuring, and COVID-19 related charges | | 170,231.00 | | | | | | 4,272.00 | | Impairment, restructuring, and COVID-19 related charges | 11.86% | | 0.22% |
| | Depreciation and amortization | | 81,844.00 | | | | | | 89,661.00 | | Depreciation and amortization | 5.70% | | 4.65% |
| | Operating (loss) income | | (370,478.00) | | | | | | 129,768.00 | | Operating (loss) income | -25.81% | | 6.73% |
| | Other (expense) income, net | | (10,122.00) | | | | | | 8,172.00 | | Other (expense) income, net | -0.71% | | 0.42% |
| | (Loss) income before income taxes | | (380,600.00) | | | | | | 137,940.00 | | (Loss) income before income taxes | -26.52% | | 7.16% |
| | (Benefit) provision for income taxes | | (109,685.00) | | | | | | 32,206.00 | | (Benefit) provision for income taxes | -7.64% | | 1.67% |
| | Net (loss) income | $ | (270,915.00) | | | | | $ | 105,734.00 | | Net (loss) income | -18.88% | | 5.49% |
| | | | | | | | | | | | | | | | | | 0 |
| 4 | a.Asset turnover ratio=Net Sales /Average total assets | | 0.40 | | | | | | 0.57 |
| | b.Inventory turnover ratio=Cost of goods sold / Average inventory | | 2.71 | | | | | | 2.28 |
| | c.Days sales in inventory ratio =365 days/inventory turnover ratio | | 134.66 | | | | | | 160.03 |
| | d.Gross margin ratio=Gross profit/Net Sales | | (1.08) | | | | | | 6.69 |
| | e.Operating margin ratio=operating income/Net Sales | | 1.37 | | | | | | 1.23 |
| | f.Return on assets ratio=Net income/Total assets | | (0.07) | | | | | | 0.03 |
| 5 | According to "ready Ratios analysis software, the financial ratios of American Eagle's competitor Gap are as below |
| | Debt ratio | | 0.76 |
| | Current ratio | | 1.41 |
| | Profit margin | | 2.10 |
| | Return on Assets | | 3.20 |
| | Asset turnover (days) | | 242.00 |
| | Gross margin | | 37.40 |
| | Also, the CSI Market gives below ratios for competitor companies in the quarter ending Aug 12020 |
| a. | Working Capital ratio |
| | Gap Inc | | 1.91 |
| | Designer Brands Inc | | 1.80 |
| b. |
| | Gap Inc | | 0.98 |
| | Designer Brands Inc | | 0.70 |
| c. |
| | Gap Inc | | 0.79 |
| | Designer Brands Inc | | 0.48 |
sam11221
AmericanEagleAssignmentPartTwo.xls
