Abercrombie & Fitch Financial Analysis

ACCOUNTING 6000

FINANCIAL PAPER ANALYSIS

Introduction:

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 ratios are intended to measure. These groupings are (1) liquidity, (2) profitability, (3) capital structure, and (4) investor ratios. Finally, the ratio results will be reviewed and examined before giving a recommendation and final statement.

Focus:

The “Stern”, which is the biggest news-magazine in Germany, published an article about Abercrombie&Fitch, the popular US-American clothing chain, this summer, mentioning the success and expansion plans of this company. This brought to mind the idea of analyzing Abercrombie&Fitch, supposing to be a potential investor, who would like to buy Abercrombie&Fitch stock. So, before making a final decision the financial statement analysis will help to support the author’s decision at this point of time.

Initial Review:

Abercrombie&Fitch, through its subsidiaries, operates as a specialty retailer in the United States and Canada.