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Aeropostale, Inc. (AROPQ) is a specialty retailer of casual apparel and accessories for teens. Recently, the company declared bankruptcy to provide financial protection while attempting to reorganize its operations. Annual report information for the three most recent years prior to the bankruptcy are as follows (in millions): Year 3 Year 2 Year 1 $(68) $(56) $(38) (16) (24) (84) 1,507 1,839 2,091 a. Determine the free cash flow. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Enter answers in millions. Net cash flows used for operating activities Cash used to purchase property, plant, and equipment Sales Year 3: $ Year 2: $ Year 1: $ b. Determine the ratio of free cash flow to sales. Round percentages to one decimal place. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Year 3: Year 2: Year 1: % % % c. Did the free cash flow information indicate financial stress? The free cash flow information accurately show the financial stress on Aeropostale. The free cash flow and ratio of free cash flow to sales were in the most recent three years prior to bankruptcy. Moreover, the amount of cash used to purchase property, plant, and equipment if the purchases of property, plant, and equipment had remained at the Year 1 across the three years. Thus, the free cash flow would have been even more levels. It appears that Aeropostale attempted to save cash by reducing property, plant, and equipment purchases. Lastly, the sales levels were trend. years. This is considered an across the three

Aeropostale, Inc. (AROPQ) is a specialty retaler of casual opparel and accessones for teens. Recently, the comparry deciared banifruptcy to provide financial protection while attempting to reorganize its operations. Annual report information for the three most recent years prior to the barikuptcy are as follows (in millions): a. Determine the free cash flow. For those boxes in which you must enter subtracted or negative numbers use a mimus sign. fnter anuwers in millons. Year 3is Year 2: 1 Year 1: 1 b. Determine the ratio of free cash flow to sales. Round percentages to one decimal place, ror those baxes in which you must enter subtracted or negative numbers use a minus sign. \begin{tabular}{l|l} Year 3: & 96 \\ Year 2: & % \\ Year 1: & % \end{tabular} c. Did the free cash flow information indicate financal stress? The free cash flow information accurately show the financal stress on Aeropostale, The free cash flow and ratio of free cash flow to sales were in the most recent three years prior to bankruptcy. Moteover, the amount of cash used to purchase property, plant; and equipment: across the three years. Thus, the free cash flow would have been even more it the purchases of property, plant, and equipnent had iemained at the Year t levels. It appears that Aeropostale attempted to save cash by reducing property, plant, and couipment purchases, Lasth, the sales levels were across the three vears. This is considered an trend

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