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A Comparison in the Financial Accounting Methods Used by Abercrombie & Fitch and H&M

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Running head: COMPARING FINANCIAL REPORTS BETWEEN A&F AND H&M 1

A Comparison in the Financial Accounting Methods Used by Abercrombie & Fitch and H&M

January 2012

COMPARING FINANCIAL REPORTS BETWEEN A&F AND H&M 2

Abstract

Financial accounting encompasses compiling operating figures that any business or organization

uses to account for their operations. For business strict guidelines must be followed to be in

compliance with Security and Exchange Commission (SEC) rules when filing annual reports.

This paper will examine, compare and contrast the differences in accounting styles and

profitability of two clothing retail giants. Abercrombie & Fitch (A&F) is a domestic retailer

based out of Ohio with over 300 outlets in the United States and Hennes & Mauritz AB (H&M)

a Swedish outfit that is by sales the world’s second largest clothing retailer. The income

statement, balance sheet and cash flow statement from each company’s annual report will be

compared and contrasted to examine differences in style and methodology.

COMPARING FINANCIAL REPORTS BETWEEN A&F AND H&M 3

A Comparison in the Financial Accounting Methods Used by Abercrombie & Fitch and H&M

The scope of this paper is to examine, compare and contrast the differences in accounting

styles and profitability of two clothing retail giants. Abercrombie & Fitch (A&F) is a domestic

retailer based out of Ohio with over 300 outlets in the United States with plans to expedite its

overseas expansion. Hennes & Mauritz AB (H&M) is a Swedish outfit that is by sales the

world’s second largest clothing retailer. It has 219 outlets in the United States with

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