The Children's Place Case Study

The Children’s Place The Children’s Place is commonly known in many households with children. The company has been in business almost 50 years with success in their clothing and accessories. The company done better financially for the fiscal year 2017. Like many companies, The Children’s place could use some improvements to generate better profits. Where the company done better in 2017 than 2016, they could do even better in 2018 if the correct changes were made.
History
The Children’s Place was founded by David Pulver and Clinton Clark in 1969. Neither Pulver or Clark wanted to work for a big company, so they decided to open their own business. The two men decided on opening a department store for children. Pulver and Clark had
The top competitors would be other name brand children’s clothing. Gap Kids, Baby Gap, Gymboree, Carter’s, and Crazy Eight are The Children’s Place’s frontline competitors. Other competitors consist of Old Navy, J.C. Pennies, and Kohl’s, but these companies have a wider variety than The Children’s Place like clothing for everyone. Walmart and Target have children’s clothing, but they have more than clothing. Walmart and Target would be a competitor with the clothing, but they are not comparable financially. The Children’s Place’s target market is mothers. The company’s plan is to have the product for quick clothing needs (The Children’s Place Inc.,
(611,163-286,343=324,820 quick assets) (324,820/329,197=0.99). The company has the money to pay back any debts. The Children’s Place is in good financial standings if, they needed to take on more debt the company could afford to (The Children’s Place, INC., 2018).
Debt to Assets Ratio The debt to assets ratio for The Children’s Place is 45 percent. The company used creditors to finance 45% for the year of 2017 (414,212/910,499=0.45=45percent). The company did not use creditors for over half of their financing, which shows upright financing. Many companies must use creditors to finance more than half of their financing. The Children’s Place could strive to use less in the future but are doing fine with what they must borrow (The Children’s Place, INC., 2018).
Receivable Turnover Ratio The receivable turnover ratio tells how fast a company receives cash for credit purchases (Bethel University, 2011). The Children’s Place’s receivable turnover ratio is 61.85 times. To get the receivable turnover ratio one must first add the beginning and ending accounts receivable (26,315+31,413=57,728) then divide the total by two (57,728/2=28,864) to get the average accounts receivable. Next, divide the sales by average accounts receivable (1,785,316/28,864=61.85). This means The Children’s Place receives the cash from credit in 6 days (The Children’s Place, INC.,