Financial Statement Analysis and Comparison of Kroger and Whole Foods

A calculation is used to assess Target and Walmart efficiency that allocating the capital under its control to profitable investments. The return on invested capital gives a sense of how well a company is using their money to generate returns. However, Target sales increased to 4% in 2015 to 2016 but then declined significantly in 2016 to 2017. Target earnings from continuing operations before interest expense and income taxes increased by 5% in 2015 to 2016 but then slightly declined to 1.5% in 2016 to 2017 not reaching the 2015 level. Therefore, Target earnings from continuing operations before income taxes increased to 3.5% in 2015 to 2016 but then slightly declined to

Future income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. Deferred financing costs, included in other assets, are amortized on a straight-line basis over the term of the bank financing. Reitmans accounts for stock-based compensation and other stock-based payments use the fair value based method. Basic earnings per share is determined with the weighted average number of non-voting and common shares outstanding during the period. When calculating diluted earnings per share, the weighted average shares outstanding are increased to include additional shares from the expected exercise of options. The number of additional shares is calculated by assuming that the proceeds from such exercises are used to repurchase non-voting and common shares at the average market price during the reporting period. Deferred licensing revenue is amortized on a straight-line basis. The financial statements and accompanying notes have been prepared on a consolidated basis and reflect the consolidated financial position of Reitmans and its wholly-owned subsidiaries. Merchandise inventories are valued at the lower of cost, determined principally on an average basis using the retail inventory method and net realizable value. Income is recorded on the accrual basis. Capital

Note: we are using end-of-year balance sheet items (rather than averages) in order to have three comparison years and to recognize that the firm’s business model (from a retailer of products manufactured by others to a manufacturer/wholesaler of eco-friendly products.

In analyzing the common-size balance sheet for Applebee's, it is noted that the total current assets has jumped from 11% to 14% of the total assets. The total assets for Applebee's has jumped 6% from 2000 to 2001 driven by increased in the total current assets of 28%. Of those 28% increase, they consisted of 88% increase in the Cash & Equivalents (increased of $10.6 millions) caused by the decreased in the Capital Stock repurchasing in 2001 by Applebee's. The repurchase of capital stock has decreased by 31% as noted from the year-to-year percentage changes of the Statement of Cash Flow which equivalent to about $11 million dollars. The other current assets increased was from the

Nordstrom is one of the oldest retail companies in the United States. It started from 1901 in Seattle and has been grown to a powerful retailer in national area. Selling high quality products is the most important method for Nordstrom to collect its revenue. At the same time, Nordstrom also offers credits and debts to customers by his banks. In this case, we are trying to analysis Nordstrom’s financial statements and calculate few simple ratios to approach the performance of this company. The main point in our analysis is to figure out how Nordstrom is using its operating assets to get returning.

Different operating and accounting practices misrepresent comparisons. Different firms employ operating leases to different extents, and this could distort comparisons of profitability ratios, asset turnovers, leverage levels, etc. Similarly, differing practices regarding inventory values, depreciation methods, and provisions for doubtful accounts receivable could also invalidate comparisons. For example, Garden State’s debt ratio in 1992 is almost 60 percent. However, if the firm has obtained significant amounts of equipment through the use of operating leases, or if it had factored all of its receivables, then its true debt ratio would have been substantially higher.

We are pleased to announce that Bich Nguyen has accepted the position of Merchandising/Drug Manager for District 6. In her new role, Bich will report to Cecilia Sarabia, District 6 Manager.

Whole Foods Market includes premium products. The products are selected for exceptional taste, authenticity, and remarkable quality. This product lines is made of up natural and organic choices that includes everything from Magnolia and Poppy Organic Laundry Detergent to Traditional Biscotti.

On October 11th, Kroger announced plans to its likely to sell its 784 convenience stores which includes brands such as KwikShop, Loaf ‘n Jug, and Turkey Hill Minit Market that operate in 18 different states. The convenience store segment accounted for just over $4B of 2016 and has experienced 62 quarters of same stores sales growth. Inside sales at Kroger’s convenience stores generated nearly $1.4B of revenue in 2016, equating to a approximately $1.8M per store. Casey’s General Stores average $3.85M sales per store and about a 6.5% EBITDA margin. We estimate that Casey’s and Kroger’s convenience stores have relatively similar EBITDA margins, yielding $260M in normalized EBITDA for Kroger’s convenience stores.

Customer satisfaction refers to the ability of commodities, services and products that are supplied by a company to meet the consumer expectations (Beard, 2014). Profitability on the other hand refers to the ability to realize extra revenues from their total earnings after paying all their expenses (Grimsley, 2016). Customer satisfaction and profitability link of Whole Foods Company is vested in the company’s mission and values charter under the company’s core values. The company has got five key steps to realizing the link between consumer satisfaction and profitability link according to (WholeFoodMarkets,

For analysis sake, the transition from LIFO to FIFO method helps one to evaluate the up-to-date costs of inventories and debt paying capabilities as well as portraying their uninflated inventory turnover values (Subramanyam, 2014). Additionally, since inventories often represent significant percentages of a company’s assets and inflation leads to price increases overtime, LIFO to FIFO restatements can allow analysts to compare companies with different inventory valuation methods (Investopedia, 2016c). More specifically, investors can assess each method’s short and long-term effects on values such as tax expense and net income (affecting earnings

Marketing has customarily been seen and regarded more as an operational as opposed to vital capacity in Whole Foods Inc. It has concentrated on choices identified by examining and selecting target markets, item and brand improvement, advancement, and channels of dissemination. This maybe to some single degree point of view presents showcasing as an assignment of making, advancing and conveying products and administrations to customers and

It equals: FCFF = EBIT (1- Tax Rate) + Depreciation - Capital expenditures - Increase in Net working capital. In this case, Kroger’s unlevered free cash flow in next five projected years are respectively 1424.2, 1438.0, 1479.7, 1526.9, and 1578.7 million (Appendix 8). Second, the weighted average cost of capital is calculated by the formula: WACC = Cost of Debt * (Debt value/Total value) * (1 – Tax Rate) + Cost of Equity * (Equity Value/Total Value). In this case, Cost of debt for Kroger is generated by using the weighted average interested rate of Kroger’s long-term debt (Table 9). Cost of debt = 4.5%. Cost of Equity is calculated by using CAPM method. Risk-free rate, market premium and beta used in this case is 2.95%, 5.0% and 0.7. Cost of Equity = 6.45%, and WACC = 5.52% (Appendix 7). The total net present value of net five year’s free cash flow is calculated as 6339.0 million.

The expenses category is evaluated by calculating the operating expense ratio and the depreciation expense ratio. The operating expense ratio measures the financial efficiency of a company in how it is able to generate income (Kantrovich, 2012). The formula for this ratio is the total operating expense not including interest minus depreciation divided by gross income. In 2012 the total operating expense of $1,170,723 minus the depreciation of $67,522 divided by gross income $1,289,885 equaled 0.85. The depreciation expense ratio indicates the amount on revenue required to sustain the capital that is used by the company. A lower the depreciation-expense ratio displays a better condition of the company. This ratio is

This is a project analysis of my favorite women clothing stores; New York and Company, Ann, Inc. and Express, Inc. The different inventories methods used by companies are LIFO, FIFO, and weighted-average. The accounting method used by these three companies and most retail industries is weighted average. This means that the company determines average cost for the units on hand and applies that average unit cost to the next sale to determine the cost of goods sold. (Ann Inc. Annual Report , 2015). Depreciation and amortization are computed on a straight line basis for all three companies. (Ann Inc. Annual Report , 2015), (Express, Inc. Annual Report, 2015), (New York and Company Annual Report, 2015). Ann, Inc. PPE useful life of buildings is up to 40 years, Leasehold Improvements is 10 years or shorter, furniture/fixtures is 2-10 years, and software is 5 years. (Ann Inc. Annual Report , 2015). Express, Inc. PPE useful life of buildings is 6-30 years, leasehold improvements is no longer than 15 years, furniture/fixtures is 5-7 years and software is 3-7 years. (Express, Inc. Annual Report, 2015). New York and Company PPE useful life for land, fixtures, and equipment is 3-10 years, office equipment is 3-15 years, and software is 5 years. (New York and Company Annual Report, 2015).