Comparing Companies within an Industry
Refer to the financial statements of American Eagle Outfitters in Appendix B, Urban Outfitters in Appendix C, and the Industry Ratio Report in Appendix D at the end of this book.
Required:
1. Compute the percentage of net fixed assets to total assets for both companies for the most recent year. Why do the companies differ?
2. Compute the percentage of gross fixed assets that has been depreciated for both companies for the most recent year. Why do you think the percentages differ?
3. Compute the fixed asset turnover ratio for the most recent year presented for both companies.
Which has higher asset efficiency? Why?
4. Compare the fixed asset turnover ratio for both companies to the industry average. Are these companies doing better or worse than the industry average in asset efficiency?
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