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.