Financial statement analysis of GAP and ANF

1. GAP VS. ANF Financial Statement Analysis Group 1 Angeles Huang Charles Towle Robin Thieu

3. Apparel Industry American Eagle Aeropostale J Crew Urban Outlet Nordstrom

5. Corporate Factsheets 2007 Fiscal

6. Common-Size Analysis 2007 Fiscal

7. Capital Structure - Solvency Accounting Analysis Perspective

8. Liquidity Accounting Analysis Perspective

9. Liquidity Accounting Analysis Perspective S&P Short-Term Issuer Credit Rating: BB+

10. Cash reinvestment ratio Accounting Analysis Perspective

11. Asset Utilization Equity Analysis Perspective Sales to Cash Eq. 5.49 4.70 3.99 3.43 3.65 Sales to Receivables - - - - - Sales to inventories 9.35 9.12 9.13 9.25 8.45 Sales to working capital 19.07 11.55 9.72 8.01 7.55 Sales to PPE 4.88 4.94 4.84 4.82 4.44 Sales to total assets 1.92 1.83 1.70 1.60 1.57 Sales to Cash Eq. 6.36 6.69 6.86 4.64 3.70 Sales to Receivables 77.28 77.99 81.92 121.31 193.42 Sales to inventories 9.86 8.40 9.71 10.59 10.85 Sales to working capital 12.56 11.41 12.23 16.96 7.73 Sales to PPE 3.11 3.48 3.71 3.07 3.34 Sales to total assets 1.56 1.64 1.78 1.48 1.44

12. RNOA Equity Analysis Perspective ANF 2007 RNOA NOPAT $ 457 = 20.3% Avg NOA $ 1,512 Sales $ 3,750 Profit margin = 11.87% Asset turnover = 2.48 RNOA = 20.3% GAP 2007 RNOA NOPAT $ 832 = 11.1% Avg NOA $ 5,075 Sales $ 15,763 Profit margin = 5.14% Asset turnover = 2.25 RNOA = 11.1% GAP vs ANF and Industries' RNOA GAP ANF

13. ROCE Equity Analysis Perspective

14. Profitability Financial Analysis Perspective PB ratio 3.30 3.42 3.22 EPS 1.05 0.94 1.26 PE Ratio 17 23 16 PB ratio 3.87 5.29 6.62 EPS 5.51 4.78 3.80 PE Ratio 13 18 20

15. Valuation Financial Analysis Perspective

17. Thank you very much !!! Group 1