Question

Suppose the following data were taken from the 2022 and 2021 financial statements of American Eagle Outfitters. (All numbers, including share data, are in thousands.)

		2022		2021
Current assets		$ 925,359		$1,020,834
Total assets		1,963,676		1,867,680
Current liabilities		401,763		376,178
Total liabilities		554,645		527,216
Net income		179,061		400,019
Net cash provided by operating activities		302,193		464,270
Capital expenditures		265,335		250,407
Dividends paid on common stock		82,394		80,796
Weighted-average common shares outstanding		205,169		216,119

(a)

Calculate the current ratio for each year. (Round answers to 2 decimal places, e.g. 15.25.)

		2022			2021
Current ratio

(b)

Calculate earnings per share for each year. (Round answers to 2 decimal places, e.g. 15.25.)

		2022			2021
Earnings per share		$			$

(c)

Calculate the debt to assets ratio for each year. (Round answers to 1 decimal place, e.g. 29.5%.)

		2022			2021
Debt to assets ratio

(d)

Calculate the free cash flow for each year. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		2022		2021
Free cash flow

Answer 1

Answer :-

A. Current Ratio = Current Assets / Current Liabilities

For 2022 = $925,359 / $401,763 = 2.30

For 2021 = $1,020,834 / $376,178 = 2.71

B. Earning Per Share

= Net Income / Weighted average common shares outstanding

For 2022 = $179,061 / 205,169 = $0.87

For 2021= $400,019 / 216,119 = $1.85

C.Debt to Assets Ratio = Total Debt / Total Assets

For 2022 = $554,645 / $1,963,676 = 28.24%

For 2021 = $527,216 / $1,867,680 = 28.22%

D. Free Cash flow = Net cash provided by operating activities - Capital expenditure - Dividend paid

For 2022 = $302,193 - $265,335 - $82,394 = -$45,536

For 2021 = $464,270 - $250,407 - $80,796 = $133,067

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