CP3-3 Pacific Sunwear

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CP3-3Pacific Sunwear American Eaglep.159

• Group 6
• Steven Tuazon
• Erick Valencia
• Danielle Fuentes
• Kartik Patel

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1) What title does each company call its income
statement? Explain what Consolidated means.

• American Eagle
• Consolidated Statements of Income and
  Comprehensive Income
• Pacific Sunwear
• Consolidated Statements of Comprehensive Income

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• Consolidated means
• to combine (a number of financial accounts or
  funds) into a single overall account or set of
  accounts.

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2) Which company had higher net income for the
year ended Jan. 29, 2005?

• Pacific Sunwear 106,904,000
• American Eagle 213,343,000
• American Eagle has higher income.

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3) Compute the total asset turnover ratio for
both companies for the year ended Jan. 29, 2005.

• Pacific Sunwear
• 1,229,762 / (677,668 644,487) / 2
• 1.86
• ( amount in thousands)

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3) Compute the total asset turnover ratio for
both companies for the year ended Jan. 29, 2005.

• American Eagle
• 1,881,241 / (1,293,659 932,414) / 2
• 1.69
• ( amount in thousands)

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3) Which company is utilizing assets more
effectively to generate sales? Why?

• Pacific Sunwears higher asset turnover ratio
  signifies they are more efficient at managing
  assets to generate sales.

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4) Compare the total asset turnover ratio for
both companies to the industry average.

• Pacific Sunwears TOR
• 1.86
• American Eagles TOR
• 1.69
• Industry Average TOR
• 2.03

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4) On average, are these two companies utilizing
assets to generate sales better or worse than
their competitors?

• On average, PacSun and American Eagle are not
  utilizing their assets as well as their
  competitors.

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5) How much cash was provided by operating
activities for the year ended Jan. 29, 2005 by
each company?

• Pacific Sunwear 143,012,000 provided by
  operating activities at the end of Jan. 29,2005.
• American Eagle 368,683,000 provided by
  operating activities at the end of Jan. 29, 2005.

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5) What was the percentage change in operating
cash flows (1) from the year ended 1/31/04 to the
year ended 1/29/05 and (2) from the year ended
2/1/03 to the year ended 1/31/04 for each company?

• Pacific Sunwear
• -0.111749 -11.1749
• .799169 79.9169
• American Eagle
• .713203 71.3203
• .593421 59.3421

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The End