Computing and Analyzing Cash Flow Ratios Selected financial information from recent Form 10-K reports for Gap Inc. and American Eagle Outfitters Inc. follows. Note: All amounts relate to the current year unless indicated as a prior year amount. ($ millions) Current liabilities, January 30, current year Current liabilities, January 31, prior year Total liabilities, January 30, current year Total liabilities, January 31, prior year Cash provided by operating activities Cash paid for capital expenditures Cash paid for dividends Gap Inc, American Eagle Outfitters Inc. $464 459 $2.535 2,234 4,928 4,707 1,594 726 377 561 557 342 164 97 a. For each company, compute the following ratios for the current fiscal year: current cash debt coverage: cash debt coverage; and free cash flow Note: Round to the nearest whole dolllar

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question
Please Do not Give image format
Computing and Analyzing Cash Flow Ratios
Selected financial information from recent Form 10-K reports for Gap Inc. and American Eagle Outfitters Inc. follows.
*Note: All amounts relate to the current year unless indicated as a prior year amount.
($ millions)
Current liabilities, January 30, current year
Current liabilities, January 31, prior year
Total liabilities, January 30, current year
Total liabilities, January 31, prior year
Cash provided by operating activities
Cash paid for capital expenditures
Cash paid for dividends
Gap Inc, American Eagle
Outfitters Inc.
$2.535
2,234
4,928
4,707
1,594
726
377
$464
459
561
557
342
164
97
a. For each company, compute the following ratios for the current fiscal year: current cash debt coverage: cash debt coverage; and free cash flow
Note: Round to the nearest whole dolllar
Transcribed Image Text:Computing and Analyzing Cash Flow Ratios Selected financial information from recent Form 10-K reports for Gap Inc. and American Eagle Outfitters Inc. follows. *Note: All amounts relate to the current year unless indicated as a prior year amount. ($ millions) Current liabilities, January 30, current year Current liabilities, January 31, prior year Total liabilities, January 30, current year Total liabilities, January 31, prior year Cash provided by operating activities Cash paid for capital expenditures Cash paid for dividends Gap Inc, American Eagle Outfitters Inc. $2.535 2,234 4,928 4,707 1,594 726 377 $464 459 561 557 342 164 97 a. For each company, compute the following ratios for the current fiscal year: current cash debt coverage: cash debt coverage; and free cash flow Note: Round to the nearest whole dolllar
Ratio
Current cash debt coverage $
Cash debt coverage
Free cash flow: $0
Free cash flow: $ 178
Numerator
x
Ratio
Current cash debt coverage $
Cash debt coverage
$
Gap Inc.
x
Denominator
1,594 + $
1,594 + $
American Eagle Outfitters Inc.
Numerator
Denominator
2,385 ✓ =
1,217 x =
342+ $
342✔ + $
462 ✓
561 X =
Result
Result
0.67
1.31
0.74
0.61
Transcribed Image Text:Ratio Current cash debt coverage $ Cash debt coverage Free cash flow: $0 Free cash flow: $ 178 Numerator x Ratio Current cash debt coverage $ Cash debt coverage $ Gap Inc. x Denominator 1,594 + $ 1,594 + $ American Eagle Outfitters Inc. Numerator Denominator 2,385 ✓ = 1,217 x = 342+ $ 342✔ + $ 462 ✓ 561 X = Result Result 0.67 1.31 0.74 0.61
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Financial Statements
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education