Question

Question 4 View Policies Current Attempt in Progress Suppose the following data were taken from the 2017 and 2016 financial statements of American Eagle Outfitters. (All numbers, including share data, are in thousands.) 2017 2016 Current assets $906,400 $1,009,800 1,970,000 1,890,000 Total assets Current liabilities 412,000 374,000 Total liabilities 559,480 536,760 Net income 186,930 316,500 Net cash provided by operating activities 465,500 318,000 294,000 Capital expenditures 263,700 Dividends paid on common stock 78,000 100,200 Weighted average shares outstanding 201,000 211,000 (a) Calculate the current ratio for each year. (Round answers to 2 decimal places, e.g. 15.25.) 2017 2016 Current ratio

Answer 1

2016 Particulars 2017 a) Current Ratio = Total current assets/Total current liabilities Current assets Current liabilities Current Ratio is 9,06,400 4,12,000 10,09,800 3,74,000 2.20 2.70 b) Earnings per share - (Net Income - Prefference dividend)/Weighted average number of shares outstanding Net Income 1,86,930 3,16,500 Weighted average number of shares 2,01,000 2,11,000 Earnings per share is 0.93 1.50 c) Debt to assets = Total liabilities/Total Assets Total liabilities Total assets Debt to assets is 5,59,480 19,70,000 5,36,760 18,90,000 0.3 10 0.3 d) Free cashflow is = Cashflow from Operating activities - Capital expenditure Cashflow from Operating activities 3,18,000 4,65,500 Capital expenditure 2,94,000 2,63,700 Free cashflow 24,000 2,01,800