Refer to the financial statements of American Eagle (Appendix B) and Urban Outfitters (Appendix C) and the Industry Ratio Report (Appendix D) at the end of this book. Most companies report some amounts of bonds payable on their balance sheets. It is somewhat surprising, therefore, that neither company reports any bond liabilities.
Required:
1. Examine the statements of cash flow for both companies. What is the primary source for cash flow for both companies?
2. Two financial ratios (the debt to equity ratio and the times interest earned ratio) are discussed in this chapter. Are they relevant for these companies? Explain.I'm working on Chapter 10 Cp10-3 problem.