Use this Excel spreadsheet to compute ratios; show your computations for all ratios on this tab and also include your commentary.
The financial statements used to calculate these ratios are available in Appendix A and Appendix B of your textbook.
Interpretation and Comparison between the two companies' ratios (Reading the Appendix of Chapter 13 will help you prepare the commentary)
Earnings per share
As given in the income statement
Earning per share express net income earned on a per share basis which provides a useful information for shareholders to determin profitability .Kohl's earning per share is lot higher than JC Penne.
The current ratio is used to measure and determine the company’s short-term debt-paying ability. JC Penne has a higher ratio than Kohl's.
Gross Profit Ratio
Gross profit ratio measures the margin by which selling price exceeds cost of goods sold. JC Pennee has a slightly higher ration than Kohl's.
Profit margin ratio
profit margin ratio is a measure of the percentage of each dollar of sales that results in net income. Kohl's ratio is three time higher than JC Penne.
Cost of Goods Sold
Inventory turn over ratio measures the number of times average inventory was sold during the period. Kohl's inventory ratio is slightly higher than JC Penne's.
Days in Inventory
It measures the average number of days inventory is held. JC Penne hold their...
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