fin 341
Financial Analysis
Kroger
Whole Foods Market
I. Introduction
II. Liquidity Ratios
Current Ratio
Quick Ratio
III. Asset Management Ratios
Inventory Turnover Ratio
Days Sales Outstanding
Fixed Assets Turnover
IV. Debt Management Ratios
Total Debt to Total Assets
Times Interest Earned
V. Profitability Ratios
Profit Margin
Return on Total Assets
Return on Common Equity
VI. Summary
VII. Appendixes
Appendix A- Summary of Ratios and Calculations
Appendix B- Kroger 2012 Financial Statements
Appendix C- Whole Foods Market 2012 Financial Statements
I. Introduction A company’s financial statements analysis can provide insight into the company’s performance financially. Companies use ratios to evaluate the company’s financial strengths and weaknesses. Ratios are used to assist managers maximize the company’s stock prices. This analysis will compare Kroger (KR) with a comparable company, Whole Food Market (WFM).
II. Liquidity Ratios Liquidity ratios show the relationship between the current assets and current liabilities. These ratios provide us with a view of the company’s ability to pay its current liabilities. KR has a current ratio of 0.72 and a quick ratio of 0.25. WFM has a current ratio of 2.15 and a quick ratio of 1.77. Both companies’ consists largely of inventory. If both KR and WFM sold their entire inventory, they would be in the same comparable position. These ratios show that WFM is more liquid than KR.
III. Asset Management Ratios
Asset management ratios simply measure the effectiveness of how a company manages its assets. These ratios can provide insight into the success of the company’s credit policy and inventory management.
Inventory turnover ratios show the number of times a company’s inventory is “turned over” in a year. KR’s turnover ratio is 18.80 where as WFM has an inventory ratio of 31.28, which show that KR seems to have a better
Kroger
Whole Foods Market
I. Introduction
II. Liquidity Ratios
Current Ratio
Quick Ratio
III. Asset Management Ratios
Inventory Turnover Ratio
Days Sales Outstanding
Fixed Assets Turnover
IV. Debt Management Ratios
Total Debt to Total Assets
Times Interest Earned
V. Profitability Ratios
Profit Margin
Return on Total Assets
Return on Common Equity
VI. Summary
VII. Appendixes
Appendix A- Summary of Ratios and Calculations
Appendix B- Kroger 2012 Financial Statements
Appendix C- Whole Foods Market 2012 Financial Statements
I. Introduction A company’s financial statements analysis can provide insight into the company’s performance financially. Companies use ratios to evaluate the company’s financial strengths and weaknesses. Ratios are used to assist managers maximize the company’s stock prices. This analysis will compare Kroger (KR) with a comparable company, Whole Food Market (WFM).
II. Liquidity Ratios Liquidity ratios show the relationship between the current assets and current liabilities. These ratios provide us with a view of the company’s ability to pay its current liabilities. KR has a current ratio of 0.72 and a quick ratio of 0.25. WFM has a current ratio of 2.15 and a quick ratio of 1.77. Both companies’ consists largely of inventory. If both KR and WFM sold their entire inventory, they would be in the same comparable position. These ratios show that WFM is more liquid than KR.
III. Asset Management Ratios
Asset management ratios simply measure the effectiveness of how a company manages its assets. These ratios can provide insight into the success of the company’s credit policy and inventory management.
Inventory turnover ratios show the number of times a company’s inventory is “turned over” in a year. KR’s turnover ratio is 18.80 where as WFM has an inventory ratio of 31.28, which show that KR seems to have a better