American Eagle vs. Urban Outfitters

Profitability ratios indicate the company’s performance in the current accounting period and show the company’s ability to make money. Observing CVS’ net profit margin from the current year they earn less per dollar of sales in 2016 than they did in 2015. This means they are making less money per dollar this year, which would indicate poor business except that Walgreens also earned less per dollar in 2016 than they did in 2015. Even a small decrease in net profit margin can be detrimental to a large company when they are dealing with millions of dollars. CVS had a higher earnings per share than Walgreens, but Walgreens had a higher price per earnings ratio. This could indicate that people were more optimistic in the performance of

Financial ratio analysis is a valuable tool that allows one to assess the success, potential failure or future prospects of the company (Bazley 2012). The ratios are helpful in spotting useful trends that can indicate the warning signs of

The profitability ration in a financial analysis is the ability of the organization to generate a profit. This ratio looks at areas such as net income, revenue, gross profit, earnings before taxes and interest and operating profit to name a few. Profitability shows the bottom line numbers for a company and is the goal that most organizations strive for. Ratios examined were gross profit margin and net profit margins

The Times Interest Earned Ratio is not near the same for these companies. J.C. Penny Co. Inc.’s ratio is 2.57, while Macy’s Inc.’s ratio is 8.13. This means that Macy’s Inc. would be able to pay its interest expense over 3 times longer with current earning than that of J.C. Penny Co. Inc. This may be vital to an investor if they are worried about their ability to remain afloat if something was to drastically change in department store industry or in the economy; however if nothing drastic occurs that will affect its EBIT, then neither company should have a problem continuing to pay their interest

Profit Margin: -This ratio relates the operating profit to the sales value (Walker, 2009). It tells us the amount of net profit per pound of turnover a business has earned.

The Silverman family first founded American Eagle Outfitters in 1977. They operated specialty clothing stores under the name Retail Ventures. In 1980 the Silverman's encountered financial troubles when the Schottenstein family bought out 50% of the Retail Ventures. In 1991 the Schottenstein family bought the rest of Retail Ventures and opened 153 American Eagle Outfitters. By late 2000 the company had introduced 46 new stores in Canada. American Eagle had approximately $2 million in annual sales in 2003 and now operates over 800 stores in the United States and Canada (http://www.hoovers.com/american-eagle-outfitters/--ID__17231--/free-co-factsheet.xhtml).

American Eagle Outfitters is a company that was founded in 1977, that provides clothing and other accessories. There are more than 1,000 American Eagle Outfitters stores that operate in the U.S and internationally. They are known for the graphic t-shirts that they sell. American Eagle Outfitters also sales fragrances, belts, and other personal care products. The financial statements that a company provide are very important. The statements give potential investors the information they need to determine their involvement in a company. The statements also allow the potential investor to know if there is money to be made, and to make sure the money is properly used (Jordanoski, I., 2018).

The structure of the paper will be as follows: First, the purpose and objectives of the fnancial analysis will be streched out, and the target audience will be identified. Second, an initial review of the company that will be taken into consideration, "ABERCROMBIE & FITCH" will be conducted. Third, horizontal and vertical analyses with the help of the three major financial statements of the Abercrombie&Fitch Annual Report (Income Statement, Balance Sheet, and Statement of Cash Flows) will be conducted. Unusual trends will be identified. Additionally, ratios for the financial statemenst will be classified into four broad groupings, based on the characteristics that particular

Operating profit margin figures in the table above show the return from net sales[13]. However profit margin ratios are high enough for the 3 years, there is a fall from 12.86% to 11.26% during 2011-12. Sales revenue increases with a higher rate than gross profit so there is a poor

Before beginning an analysis of a company it is necessary to have a complete set of financial statements, preferably for the pas few years so that historical trends can be obtained. Ratios are a way for anyone to get an idea of the financial performance of a company by using the information contained in the financial statements. Ratios are grouped into four basic categories, liquidity, activity, profitability, and financial leverage. This document will use a variety of these ratios to analyze the firm, Sample Company, as of December 31,2000.

Profitability (performance) ratios are used to assess a company’s ability to create equity as compared to its debt and other appropriate expenses created during a particular time frame. A favorable analysis of profitability ratios will reveal that a company’s value is higher than a competitor’s value.

Profitability ratios refer to the relative measure to what an actual created profit. Through these ratios the company is allowed to see how profitable the company. In addition it can serve as an examination of the overall performance of the company’s operations and how do these compare to past performances or other companies. The ratios in which accounting measures the profitability of a company are Profit Margin, Price over Earnings, Return on Equity and Return on

Through indicating the profit margin, return on assets and return on equity to measure sales, assets and other factors, shareholders also can know the global profit performance of the firm and indicate that how the condition of company is.

The calculation of ratios is the calculation technique for analyzing a company’s financial performance that divides or standardize one accounting measure by another economically relevant measure. Financial ratios can be used as a tool to demonstrate financial statement users for making valid comparisons of firm operating performance, over time for the same firm and between comparable companies. External investors are mostly interested in gaining insights about a firm’s profitability, asset management, liquidity, and solvency.

Net Profit Margin- The net profit margin of 18.34 percent for 2008 indicates that 18.34 cents of net income was generated for each dollar of sales. The significant increase of 7.83 percent, from 2007’s 10.51 percent, yielded an additional $1.84 billion in profit on the company’s $23.52 billion in revenue.