The following data were taken from the 2009 and 2008

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The following data were taken from the 2009 and 2008 financial statements of American Eagle Outfitters. (All dollars are in thousands.)


2009

2008

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

Total stockholders" equity

1,409,031

1,340,464

Cash provided by operating activities

302,193

464,270

Capital expenditures

265,335

250,407

Dividends paid

82,394

80,796

Instructions

Perform each of the following.

(a) Calculate the debt to total assets ratio for each year.

(b) Calculate the free cash flow for each year.

(c) Discuss American Eagle"s solvency in 2009 versus 2008.

(d) Discuss American Eagle"s ability to finance its investment activities with cash provided by operating activities, and how any deficiency would be met.

Reference no: EM13572782

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