fin 341

Satisfactory Essays
363 Words
Grammar
Plagiarism
Writing
Score
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

You May Also Find These Documents Helpful

• Satisfactory Essays

Tootsie’s inventory turnover ratio is higher than Hershey’s. This means that Tootsie sells its inventory faster than Hershey. Hershey has higher days in inventory index which means that Hershey is not selling its total inventory as quickly as Tootsie. It could be a sign that Hershey can become less profitable.…

• 435 Words
• 2 Pages
Satisfactory Essays
• Satisfactory Essays

Fin 5310

• 356 Words
• 2 Pages

1. Cheers Inc. operates as a partnership. Now the partners have decided to convert the business into a corporation. Which of the following statements is CORRECT? (Points: 5) a. Cheers™ shareholders (the ex-partners) will now be exposed to less liability. b. Cheers will now be subject to fewer regulations. c. Assuming Cheers is profitable, of its income will be subject to federal income taxes. d. Cheers™ investors will be exposed to less liability, but they will find it more difficult to transfer their ownership. e. Cheers will find it more difficult to raise additional capital.…

• 356 Words
• 2 Pages
Satisfactory Essays
• Satisfactory Essays

When analyzing a business, financial statements provide a detailed look into the company and the success or failure which lies within in. Financial ratios are calculated to determine these numbers and to identify other number related variables that have an impact on the company and those investing in the business. Once determined they offer information concerning the businesses return on investment and the ability of the business to pay its bills on time, as well as what their projected future earnings will be. The following depicts the financial status of ABC SDN. BHD with financial ratio analysis.…

• 833 Words
• 4 Pages
Satisfactory Essays
• Good Essays

Fin 516

• 2813 Words
• 12 Pages

Deere & Company also more commonly known as John Deere, along with its subsidiaries, operates in three segments: agriculture and turf segment, construction and forestry segment and financial services segment. The John Deere agriculture and turf segment manufactures and distributes a full line of agricultural and turf equipment and related service parts. John Deere construction, earthmoving, material handling and forestry equipment includes a broad range of backhoe loaders, crawler dozers and loaders, four-wheel-drive loaders, excavators, motor graders, articulated dump trucks, landscape loaders, skid-steer loaders, log skidders, log feller bunchers, log loaders, log forwarders, log harvesters and a variety of attachments. The financial services segment primarily finances sales and leases by John Deere dealers of new and used agriculture and turf equipment and construction and forestry equipment…

• 2813 Words
• 12 Pages
Good Essays
• Better Essays

Xacc 280 Final

• 1225 Words
• 5 Pages

Liquidity, solvency, and profitability are the three characteristics that will be used to see a company’s success. A simple financial statement will not demonstrate the company’s power because it is a general idea of the company’s position and does not display business developments. The company’s business developments are vital for potential investors because they determine vertical and horizontal analysis. These characteristics are also used to define the ratio analysis. Ratio analysis is dividing two numbers to get a number of percentages that can be used to compare companies in the same industry. Examining the entire company’s financial trends for a set period of time, an investor will see a factual description of the company’s financial condition. This is the financial analysis an investor desires to review prior to spending money.…

• 1225 Words
• 5 Pages
Better Essays
• Good Essays

Dq Wk 4

• 373 Words
• 2 Pages

 Efficiency ratios—measure how effective management is managing turnover rates and return on assets. Efficiency ratios also include inventory turnover, and sales to receivables. When measuring inventory turnover and sales to receivables a higher number proves better efficiency. Measuring return on assets involves comparing net income to total assets.…

• 373 Words
• 2 Pages
Good Essays
• Satisfactory Essays

Fin 370

• 461 Words
• 3 Pages

Primary market is a part of the financial market where new security issues are initially bought and sold.…

• 461 Words
• 3 Pages
Satisfactory Essays
• Good Essays

Secondly I am going to compute Activity Ratios for both AT&T and Verizon. Inventory turnover is defined as the speed with which inventory is sold. For AT&T their inventory turnover is at 46.1 and Verizon’s is at 43.0. Receivables turnover is defined as the speed with which account receivable are collected (Mayo, 2012). For AT&T their receivables turnover is 9.6 and Verizon’s is 9.8. Total asset turnover is the measure of total assets required to generate sales (Mayo, 2012). AT&T and Verizon’s total asset turnover is 0.5.…

• 687 Words
• 3 Pages
Good Essays
• Good Essays

Fin 370

• 713 Words
• 3 Pages

HP has been noted to be one of the chief corporations in the area of computer technologies. Ethisphere Institute naming HP as one of the 2009 World’s Most Ethical Companies (HP Global Citizenship: Ethics and compliance, n.d.) was one of the companies latest accomplishments. HP had to make numerous in-house changes in order to acquire an ethical award brought about by ethical mishaps. Noted in Markkula Center (2007), HP unethical corporate conduct landed a payout of 14.5 million dollars as component of a California lawsuit agreement. Part of the resolution prompt HP to rework the ethics and compliance division, develop reporting and partnership efforts, and to make available neutral case management staff (p. 7).…

• 713 Words
• 3 Pages
Good Essays
• Powerful Essays

The objective of this report is to provide investment recommendations for Country Road Pty Ltd (CR). CR currently has a strong brand reputation and continues to grow by opening new stores and currently operating in prime retail locations across Australia, New Zealand and South Africa.…

• 6299 Words
• 26 Pages
Powerful Essays
• Satisfactory Essays

fin 370

• 517 Words
• 4 Pages

1. Watson Oil recently reported (in millions) \$8,250 of sales, \$5,750 of operating costs other than depreciation, and \$650 of depreciation. The company had \$3,200 of outstanding bonds that carry a 5% interest rate, and its federal-plus-state income tax rate was 35%. In order to sustain its operations and thus generate future sales and cash flows, the firm was required to make \$1,250 of capital expenditures on new fixed assets and to invest \$300 in net operating working capital. Calculate the firm’s net income and free cash flow.…

• 517 Words
• 4 Pages
Satisfactory Essays
• Satisfactory Essays

Fin 534

• 612 Words
• 3 Pages

| |This is an example of a direct transfer of capital. | | | |…

• 612 Words
• 3 Pages
Satisfactory Essays
• Good Essays

Inner City

• 1069 Words
• 5 Pages

Asset Management Ratio: indicate how successfully a company is utilizing its assets to generate revenues.…

• 1069 Words
• 5 Pages
Good Essays
• Powerful Essays

It can analyze the ability of paying expense in the short term. The higher current ratio and quick ratio mean the company has higher ability for exchanging asset to cash. The…

• 1787 Words
• 8 Pages
Powerful Essays
• Satisfactory Essays

Fin 370

• 1714 Words
• 7 Pages

University policies are subject to change. Be sure to read the policies at the beginning of each class. Policies may be slightly different depending on the modality in which you attend class. If you have recently changed modalities, read the policies governing your current class modality.…

• 1714 Words
• 7 Pages
Satisfactory Essays