Suppose the following data were taken from the 2022 and 2021 financial statements of American Eagle Outfitters. (All numbers, including share data, are in thousands.) 2022 2021 Current assets $ 871,500 $972,000 Total assets 1,908,500 1,786,000 Current liabilities 415,000 360,000 Total liabilities 564,916 528,656 Net income 197,760 410,590 Net cash provided by operating activities 322,000 498,600 Capital expenditures 289,000 290,200 Dividends paid on common stock 82,000 126,700 Weighted-average common shares outstanding 206,000 216,100 (a) Calculate the current ratio for each year. (Round answers to 2 decimal places, e.g. 15.25.) 2022 2021 Current ratio enter current ratio rounded to 2 decimal places : 1 enter current ratio rounded to 2 decimal places : 1 (b) Calculate earnings per share for each year. (Round answers to 2 decimal places, e.g. 15.25.) 2022 2021 Earnings per share $ enter a dollar amount rounded to 2 decimal places $ enter a dollar amount rounded to 2 decimal places (c) Calculate the debt to assets ratio for each year. (Round answers to 1 decimal place, e.g. 29.5%.) 2022 2021 Debt to assets ratio enter percentages rounded to 1 decimal place % enter percentages rounded to 1 decimal place % (d) Calculate the free cash flow for each year. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) 2022 2021 Free cash flow $enter a dollar amount $enter a dollar amount

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Answer:

Kindly check explanation

Explanation:

Given the following :

__________________2022______2021

Current asset______871,500___972,000

Total assets______1,908,500__ 1,786,000

Current liabilities___415,000____ 360,000

Total liabilities_____ 564,916____ 528,656

Net income________197,760____ 410,590

Net cash (from OP)__322,000____ 498,600

Capital expenditures_289,000___ 290,200

Dividends paid(CS)___82,000____ 126,700

Weighted-average common shares outstanding 206,000 216,100

*(OP) = Operating activities

*(CS) = common stock

Current ratio for each year:

2022:

Current asset / current liability

$871,500 / $415,000 = 2.1 : 1

2021:

$972,000 / $360,00 = 2.7 : 1

EARNING PER SHARE :

Net income / weighted average shares outstanding

2022:

$197,760 / 206,000 = $0.96

2021:

$410,590 / 216,100 = $1.90

DEBT TO ASSET RATIO:

Total liabilities / Total asset

2022:

$564,916 / $1,908,500 = 0.296

2021:

$528,656 / 1,786,000 = 0.296

FREE CASH FLOW :

Net cash (from OP) - Capital expenditure - Dividend paid on common stock

2022:

$322,000 - $289,000 - $82,000 = - $49,000

2021:

$498,600 - $290,200 - $126,700 = $81,700

Working Notes:

 Enteries                       2022            2021

  • Current asset              871,500       972,000
  • Total assets              1,908,500     1,786,000
  • Current liabilities        415,000       360,000
  • Total liabilities            564,916        528,656
  • Net income                  197,760         410,590
  • Net cash (from OP       322,000      498,600
  • Capital expenditures   289,000       290,200
  • Dividends paid(CS)      82,000          126,700

Part A) :

The current ratio for each year :

2022:

Current Ratio = Current asset / current liability

Current Ratio = $871,500 / $415,000

Current Ratio = 2.1 : 1

2021:

Current Ratio = Current asset / current liability

Current Ratio = $972,000 / $360,00

Current Ratio =  = 2.7 : 1

Part B :

The Earning per share for each year :

2022:

Earning per share= Net income / weighted average shares outstanding

Earning per share= $197,760 / 206,000

Earning per share== $0.96

2021:

Earning per share= Net income / weighted average shares outstanding

Earning per share=$410,590 / 216,100

Earning per share= $1.90

Part C:

Debt to asset ratio for each year :

2022:

Debt to asset ratio=Total liabilities / Total asset

Debt to asset ratio=$564,916 / $1,908,500

Debt to asset ratio = 0.296

2021:

Debt to asset ratio=Total liabilities / Total asset

Debt to asset ratio=$528,656 / 1,786,000

Debt to asset ratio= 0.296

Part D:

Free Cash flow for each year :

2022:

Free Cash flow=Net cash (from OP) - Capital expenditure - Dividend paid on common stock

Free Cash flow=$322,000 - $289,000 - $82,000

Free Cash flow = - $49,000

2021:

Free Cash flow=Net cash (from OP) - Capital expenditure - Dividend paid on common stock

Free Cash flow$498,600 - $290,200 - $126,700

Free Cash flow= $81,700

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