Macy's Financial Analysis

Topics: Generally Accepted Accounting Principles, Balance sheet, Asset Pages: 5 (1302 words) Published: September 26, 2011
Macy’s Inc.

Fiscal Year End: January 29, 2011

Date of Report: April 25th, 2011.

By - Monika Gupta

The annual report and 10-K filings were obtained from The financial statements included in the annual report are as follows: consolidated statements of operations, consolidated balance sheets, consolidated statements of changes in shareholders’ equity, consolidated statement of cash flows, and notes to consolidated financial statements. In the report, Macy’s Inc. recognizes several competitors which are Bed Bath & Beyond, Belk, Bon Ton, Burlington Coat Factory, Dillard’s, Gap, J.C. Penney, Kohl’s, Limited, Lord & Taylor, Neiman Marcus, Nordstrom, Saks, Sears, Target, TJ Maxx and Wal-Mart. The top three competitors according to ‘’ are Dillard’s Inc, Saks Inc, and J.C. Penney Corporation, Inc. The report states that the company’s independent registered public accounting firm is KPMG LLP. In KPMG LLP’s opinion, “the consolidated financial statements referred to Macy’s Inc., present fairly, in all material respects, the financial position of Macy’s, Inc. and subsidiaries as of January 29, 2011 and January 30, 2010, and the results of its operations and its cash flows for each of the years in the three-year period ended January 29, 2011, in conformity with U.S. generally accepted accounting principles”. Also in their opinion, “Macy’s, Inc. maintained, in all material respects, effective internal control over financial reporting as of January 29, 2011, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Tread way Commission.” Financial Accounting Analysis

The inventory method used by Macy’s Inc. is the last in, first out (LIFO) inventory method. The depreciation method used is straight-line depreciation. The estimated useful life for buildings and building equipment ranges from fifteen to fifty years and it ranges from three to fifteen years for fixtures and equipment. The authorized shares of the company consist of 125,000,000 shares of preferred stock (none of these were issued) and 1000,000,000 shares of common stock, both of which are issued at a par value of $0.01. The number of common stock issued are 495,000,000 and the number of outstanding common stock are 423,300,000. There are 71,697,200 shares of treasury stock that are held by Macy’s. The company did pay dividends at this time. The dividends were issued at $0.20 per common share for the year. The price per share on January 28th, 2011 was $22.99, and the price per share on April 25th, 2011 was: $23.95. The cash generated by operating activities for the 2010 fiscal year was $1,506,000,000. The cash generated by investing activities was a loss of $465,000,000. The cash generated by financing activity was $1,464,000,000.

Profitability and Solvency Ratios for FY 2010.

Profitability Ratios| Equation| Value| | Solvency Ratios| Equation| Value| Gross Profit Margin| Gross Profit/Net Sales| 40.71%| | Debt to Assets ratio| Total Debt/Total Assets | 0.359895303| Operating Profit Margin| Earnings before interest and taxes/Net sales| 7.58%| | Debt to Equity ratio | Total Debt/Total Equity| 1.342676311| Net Profit margin| Net income/Net sales| 3.39%| | Liabilities to equity ratio| Total Liabilities/Stockholders' equity| 2.73074141| Cash Flow Margin| Cash flow from operating cash flows/Net sales| 6.02%| | Indebtedness Ratio | Total Debt / Total Liabilities| 0.491689292| Return on Assets| Net income/Total Assets| 4.12%| | Current liabilities to Inventory Ratio| Current Liabilities/Available Inventory| 1.064522909| Return on equity| Net income/Total Equity| 15.3%| | Current Ratio | Total Current Assets/ Total Current Liabilities| 1.362092794| Earning power ratio| Earnings before interest and taxes /Total assets| 9.18%| | Times earned interest| Earnings before interest and taxes/Interest...
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