Professor Barbara McGuire
The Kroger Co. was founded in 1883 and incorporated in 1902. It is one of the nation’s largest retailers, as measured by revenue. The Kroger Co is currently ranked #2 in the industry on the Fortune 500 list and # 25 overall. There revenues are earned and cash is generated as consumer products are sold to customers in their stores. They earn income predominately by selling products at price levels that produce revenues in excess of the costs incurred to make the products available to customers. Such costs include procurement and distribution costs, facility occupancy and operational costs, and overhead expenses. The retail operations, which represent over 99% of Kroger’s consolidated sales and EBITDA, are there only reportable segment. The main sections of the annual report include the following: Kroger’s 2011 Annual Report begins by stating the Management’s Responsibility for Financial Reporting. This states that the management is responsible for preparing financial statements and that the financial statements were prepared based on generally accepted accounting principles. Management’s Report on Internal Control over Financial Reporting. The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. The Annual Report includes a financial summary of the past five years. This summary shows the sales, net income, total assets, including liabilities, and shareowners equity. Management’s Discussion and Analysis of Financial Condition and Results of Operations, thoroughly explains how the company earns and spends company money, the number of stores Kroger operates, and the overall performance for the stores in 2011. The Consolidated Balance Sheets include information about Kroger’s Assets, Liabilities, and Shareowners equity. The Consolidated Statements of...