Accounting and Finance: Managerial Use and Analysis

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Rahul Balhara
Accounting and Finance: Managerial Use and Analysis MAR12 Sec C Financial Statement Analysis Project -- A Comparative Analysis of Kohl’s Corporation and J.C. Penney Co
MAR12 Sec C
Analysis of Kohl’s Corporation and J.C. Penney Corporation

J.C. Penney was founded by James Cash Penney in 1902. This Plano, Texas based company is presently providing family apparel and footwear, accessories, jewelries, beauty products and home furnishings via 1,100 department stores as of December 7, 2011 in the United States and Puerto Rico. The company is also taking advantage of technology by making JC Penney's products available online through its Internet Web Site jcpenney.com. This more than a century old company also provides styling salon, optical, portrait photography and custom decorating services. The 159,000 present employees are dedicated in rendering outstanding service in the world of retail.

Kohl's Corporation presently operates 1,127 department stores in 49 states. This Wisconsin based corporation serves the Unites States via traditional and online shopping (kohls.com). It offers private, exclusive and national branded apparel, footwear and accessories for men, women and children. The company was founded by Max Kohl in 1962 in Brookfield, WI. Today, 30,000 employees are dedicated in leading a family-focused and value- oriented store in the United States.

Kohl's Corporation
J.C. Penney Corporation
Earnings per share
As given in the income statement
$3.67
Current ratio
Current assets
Current liabilities
$5,645,000,000
$2,710,000,000
=
2.08
$6,370,000,000
$2,647,000,000
Gross Profit Ratio
Gross profit
Net Sales
$7,032,000,000 =
$18,391,000,000
38.24%
$6,960,000,000
$17,759,000,000

Profit margin ratio
Net Income
Net Sales
$1,114,000,000 =
$18,391,000,000
6.06%
$389,000,000
$17,759,000,000
Inventory Turnover
Cost of Goods Sold
Average Inventory
$11,359,000,000
$2,979,500,000
3.8
times
$10,799,000,000
$3,118,500,000
Days in Inventory
365 days
Inventory turnover
365
3.8
=
96
days
365
3.5
Receivable Turnover Ratio
Net credit sales
Average Net Receivables
=
Not Applicable
Average Collection Period
365
Receivable Turnover Ratio
=
Not Applicable

Assets Turnover Ratio
Net Sales
Average Total Assets
$18,391,000,000 =
$13,362,000,000
1.38
$17,759,000,000
$12,811,500,000
Return on Assets Ratio
Net Income
Average Total Assets
$1,114,000,000 =
$13,362,000,000
8%
$389,000,000
$12,811,500,000
Debt to Total Assets Ratio
Total Liabilities
Total Assets
$5,462,000,000 =
$13,564,000,000
40.27%
$7,582,000,000
$13,042,000,000
Times Interest Earned Ratio
Net Income + Int Expense + Tax Expense
Interest Expense
$1,914,000,000
$141,000,000
=
13.6
832,000,000
231,000,000
Payout ratio
Cash dividend declared on common stock
Net income
=
Not Applicable
$189,000,000
$389,000,000
Return on Common Stockholders' Equity
Net income - Preferred stock dividend
1,114,000,000
=
14%
$389,000,000

Average common stockholders' equity
7,977,500,000.00
$5,119,000,000
$915,000,000
Free cash flow
Cash provided by operations minus capital
expenditures minus cash dividends paid
=
$915,000,000
($96,000,000)
Free cash flow
Free cash flow per kohl's includes tax benefit
from pension contribution, discretionaty cash
pension contribution and proceeds from sale
of assets on page 15 of the 10K report
$915,000,000
=
$915,000,000
$158,000,000
Current cash debt coverage ratio
Cash provided by operations
Average current liabilities
$1,676,000,000
$2,550,000,000
=
0.66
$592,000,000
$2,948,000,000
Cash debt coverage ratio
Cash provided by operations
Average total liabilities
$1,676,000,000
$5,384,500,000
=
0.31
$592,000,000
$7,692,500,000
Price/Earnings ratio
Market price as of 1/31/2011
EPS
$50.78
$3.67
=
13.84...
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