Comparing Companies within an Industry Refer to the f

Comparing Companies within an Industry Refer to the financial statements of American Eagle given in Appendix B Urban Outfitters given in Appendix C and the Industry Ratio Report given in Appendix D at the end of this book. Most compa- nies report some amounts of bonds payable on their balance sheets. It is somewhat surprising there- fore that neither company reports any bond liabilities. Required: 1. Examine the statements of cash flow for both companies. What is the primary source for cash flow for both companies? 2. Two financial ratios (the debt-to-equity ratio and times interest earned) are discussed in this chap- ter. Are they relevant for these companies? Explain.