Abercrombie & Fitch:

Abercrombie & Fitch Co. (“A&F”) established in 1992, through its wholly-
owned subsidiaries (collectively, A&F and its wholly-owned subsidiaries are
referred to as “Abercrombie & Fitch” or the “Company”), is a specialty
retailer of high-quality, casual apparel for men, women and kids with an
active, youthful lifestyle.

Under it's internally developed brands which include:

• Abercrombie,
• Hollister,
• Ruehl and
• Gilly Hicks.

There each brand possesses its own unique heritage and handwriting but
all share common elements and characteristics of being casual, classic,
confidence, intelligence, privilege and a sense of humor.
A&F core objective is to be dominate and aspirational lifestyle brand.

Basis of Presentation:

Fiscal Year:

The Company’s fiscal year ends on the Saturday closest to January 31,
typically resulting in a fifty-two week year, but occasionally giving rise to an
additional week, resulting in a
Fifty-three week year. Fiscal years are designated in the consolidated
financial statements and notes by the calendar year in which the fiscal year
commences. All references to “Fiscal 2007” represent the results of the 52-
week fiscal year ended February 2, 2008; to “Fiscal 2006” represent the 53-
week fiscal year ended February 3, 2007; and to “Fiscal 2005” represent
the 52-week fiscal year ended January 28, 2006.

Representation of Financial Statements:

A&F Co. financial statements are audited by an independent registered public accounting firm
PricewaterhouseCooperLLP, Columbus, Ohio.

Following is a short introduction to A&F's Financial Statements.

Balance Sheet:

From exhibit 1 we see the consolidated balance sheet of A&F, showing the
data for the past two years as on 2 February, listing down all its assets,
liabilities and stock holder's equity.
Assets:
The assets listed in the balance sheet for year 2007 are as following:

Current Assets

118,044.0
Cash 0
Marketable 530,486.0
Securities 0
53,801.0
Recievables 0
333,153.0
Inventories 0
Deferred Income 36,128.0
taxes 0
68,643.0
Other Assets 0

From exhibit 2(a) we see the bar graph comparing the current assets for
the two years as given in the balance sheet and we can see they is
constant increase in current assets.
As shown in exhibit 2(b) the plant and equipment (long term assets) have
increased considerable thus impacting an increase of 14% on total assets
compared to last year.

Income Statement:

A&F has provided data for the statement of income for three years (2005,
2006, and 2007 respectively) as shown in exhibit B.
From exhibit B (I) we see the comparison of net sales to net income and we
see they is an increase in both the amounts from the prior years. By the net
income we are measuring A&F performance; the increase shows its
successfully selling for more than the cost to generate those sales.

Cash Flow Statements:

Statement of Cash flow is represented in Exhibit C, showing the data for
three years respectively (2005, 2006, and 2007 respectively)

Investing activities:

From Exhibit C, Cash outflows for Fiscal 2007 were primarily for purchases
of marketable securities and trust-owned life insurance policies and capital
expenditures related primarily to new store construction, store remodels
and refreshes, the purchase of an airplane and other various store, home
office and DC projects, partially offset by proceeds from the sale of
marketable securities.
Cash outflows for Fiscal 2006 were primarily for purchases of marketable
securities, the purchase of trust-owned life insurance policies and capital
expenditures. Cash outflows for Fiscal 2005 were primarily for purchases of
marketable securities and capital expenditures.

Financing Activities:

From Exhibit C, under the Financing Activities section cash outflows and
inflows are shown,
Cash outflows related to financing activities consisted primarily of the
repurchase of the Company’s Common Stock and the payment of dividends
in Fiscal 2007 and Fiscal 2005. In Fiscal 2006, cash outflows for financing
activities related primarily to the payment of dividends and a change in
outstanding checks.
Cash inflows in Fiscal 2007, Fiscal 2006 and Fiscal 2005 consisted primarily
of stock option exercises and excess tax benefits related to stock option
exercises and restricted stock issuances. A&F repurchased approximately
3.6 million and 1.8 million shares of A&F’s Common Stock during Fiscal
2007 and Fiscal 2005, respectively.

Financial Leverage Ratio:

The financial leverage ratio = Average Total Assets/Average Stockholders'

Equity

(2248067+2567598)/2/(+1405297+1618313)/2=
1.59

The leverage ratio is moderate thus showing that A&F moderately uses
debt to finance its assets therefore it is at less risk.