My team has analyzed the financial positions of American Eagle Outfitters and The Buckle Company. We have analyzed the inventory of both companies to see how profitable they may be. From our research, we present to you the following information.
American Eagle evaluates its merchandise inventory at the lower of average cost or market, using retail method. Average cost includes merchandise design and sourcing costs and related expenses. American Eagle records its merchandise receipts at the time merchandise is delivered to the foreign shipping port by the manufacturer; by now the title and risk of loss is transferred to the company. Merchandise inventory for the most recent year is valued at $278,972,000. This amount represents a current asset which reveals the cost of goods purchased to be resold, which have not yet been sold as of January 31, 2015. American Eagle refers to its cost of goods sold as cost of sales, including certain buying, occupancy and warehousing expenses. In the most recent year, the cost of goods sold is $2,128,193,000. This amount …show more content…
The Buckle Inc.’s management makes estimate adjustments to inventory and cost of goods sold to account for merchandise that is obsolescent and markdowns that could affect market value. For the most recent year the amount of inventory was $129,921,000 and this represents all the merchandise they currently have that has yet to be sold. The Buckle Inc, refers to its cost of goods sold as cost of sales. This includes buying, distribution and occupancy costs. In the income statement, the most recent cost of sales is $645,810,000. This amount represents the direct cost of the company’s production cost of goods sold. The inventory turnover ratio is 9.93 and the average days in inventory is 36.8. Their gross profit ratio has been 49% in 2013, 44% in 2014 and 44% in 2015. Their ratio of operating expenses to net sales in the most recent year is
American Eagle evaluates its merchandise inventory at the lower of average cost or market, using retail method. Average cost includes merchandise design and sourcing costs and related expenses. American Eagle records its merchandise receipts at the time merchandise is delivered to the foreign shipping port by the manufacturer; by now the title and risk of loss is transferred to the company. Merchandise inventory for the most recent year is valued at $278,972,000. This amount represents a current asset which reveals the cost of goods purchased to be resold, which have not yet been sold as of January 31, 2015. American Eagle refers to its cost of goods sold as cost of sales, including certain buying, occupancy and warehousing expenses. In the most recent year, the cost of goods sold is $2,128,193,000. This amount …show more content…
The Buckle Inc.’s management makes estimate adjustments to inventory and cost of goods sold to account for merchandise that is obsolescent and markdowns that could affect market value. For the most recent year the amount of inventory was $129,921,000 and this represents all the merchandise they currently have that has yet to be sold. The Buckle Inc, refers to its cost of goods sold as cost of sales. This includes buying, distribution and occupancy costs. In the income statement, the most recent cost of sales is $645,810,000. This amount represents the direct cost of the company’s production cost of goods sold. The inventory turnover ratio is 9.93 and the average days in inventory is 36.8. Their gross profit ratio has been 49% in 2013, 44% in 2014 and 44% in 2015. Their ratio of operating expenses to net sales in the most recent year is