Kohl Corporation and Dillard's Inc

Topics: Balance sheet, Inventory, Financial ratios Pages: 3 (730 words) Published: January 29, 2013
| 2006| 2007|
| Kohl’s| Dillard’s| Kohl’s| Dillard’s|
Total assets turnover| 1.72| 1.40| 1.68| 1.34|
Fixed assets turnover| 3.13| 2.43| 2.78| 2.27|
Inventory turnover| 4.12| 2.82| 3.85| 2.70|
Average holding period| 88.58days| 129.64days| 94.84days| 135.40days| Payables turnover| 11.25| 6.08| 11.82| 6.17|
Average time to turnover| 32.45days| 60.05days| 30.89days| 59.14days| Cash conversion cycle| 56.13days| 69.59days| 63.95days| 76.26days| PS: There’s no amount in accounts receivable in Kohl’s Balance sheet, so we cannot analyze the receivables turnover between two companies. |

Kohl’s total assets ration and fixed assets ratio are higher than Dillard’s, indicating that Kohl’s uses its total assets (including its fixed assets) more effectively than Dillard’s, and also indicating that Kohl’s is generating more volume of business given its total asset investment. As Kohl’s some assets increased and Dillard’s sales decreased in 2007, total asset ratio and fixed assets ration of two companies have decreased.

Kohl’s inventory turnover in 2006 and 2007 are higher than Dillard’s, indicating that Kohl’s has a better management of inventory than Dillard’s. The inventory improved because of an increase in the COGS, which indicates more sales, and a decrease in the average inventories. Therefore, Kohl’s higher inventory turnover might be due to its more effective marketing strategies. What’s more, these two companies experienced a decrease in inventory turnover in 2007, indicating an increase in inventory and less effective management of inventory in that period. Kohl’s number of day’s sales in inventory decreased from 88.6 days to 94.8 days during 2007, and Dillard’s almost experienced a little higher decrease (in percentage) than Kohl’s. They are the major decreases in managing inventory.

Kohl’s payable turnover is higher than Dillard’s, indicating that Kohl’s is paying for its suppliers at a...
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