Chapter 13, Problem 13.3CP

Comparing Companies within an Industry

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. Compute the following ratios for fiscal 2014: return on equity, basic earnings per share, net profit margin, inventory turnover, current ratio, debt-to-equity ratio, pricc/earnings ratio, and dividend yield. Assume the stock price is $40 for Urban Outfitters and $16 for American Eagle. Compare the ratios for each company to the industry average ratios.