Comprehensive Analysis Liquidity Liquidity is defined as the ability to convert assets quickly into to cash (Liquidity, 2014). A good standing liquidity is good for companies as well as investors and lenders to the company. For the company it’s a great indication as to whether it will meet short term maturing obligations or not. For creditors and investors, a good standing liquidity portrays the ability of how quick a company can pay off debts. Current Ratio (Current assets ÷ Current liabilities) The current ratio (working-capital ratio) is used to measure liquidity and it is the present assets of a company to the present liabilities (Law, 2016). A current ratio of 1 (100%) or greater is an indication that the company have a high chance …show more content…
The inventory turnover ratio for Macy’s, Inc. decreased from 3.02 in 2016 to 2.86 in 2017. This decrease shows that the company’s ability to control or sell its inventory efficiently, decreased in the year 2017. Macy’s had lower inventory turnover compared to the industry inventory turnover. The fact that inventory turnover is lower compared to its competitors can indicate Macy’s is not effectively selling the inventory it buys. Asset turnover (Net Sales ÷ Average Total Assets) Asset turnover evaluates a company’s capability to produce revenues from its assets (Fairfield & Teri, 2001). The asset turnover for Macy, Inc decrease from 1.29 in 2016 to 1.28 in 2017. The decrease shows that for every dollar in assets, the company generated $1.28 dollars in 2017. Compared to its competitors Macys has the lowest asset turnover ratio. This shows that Macy’s is not efficiently using its assets to generate sales. Profitability Profitability measures whether the company can earn profit for the owner/s or not. It basically a measurement of how the company can earn profits from their …show more content…
decreased from 5.62 in 2016 to 3.59 in 2017. The company’s income decreased from 5.62 times greater than its annual interest expense to 3.59 times greater than its annual interest. It shows Macy’s can afford to pay interest plus principal with current operations. Although the numbers being greater than 1 shows Macy’s can very well afford to pay the interest plus principal, compared to the industry Macy’s is on the lower end. For example, Macy’s competitor Dillard’s time ratio for 2017 was 5.07, and Kohls was at 4.07. References A Dictionary of Economics (3 ed.) . (2013, September 26). Retrieved March 31, 2018, from http://www.oxfordreference.com/view/10.1093/acref/9780199237043.001.0001/acref-9780199237043 Fairfield, P. M., & Teri, L. Y. (2001). Using asset turnover and profit margin to forecast changes in profitability. Review of Accounting Studies, 6(4), 371. Inventory Turnover. (2011). In J. Law, Business: the ultimate resource (3rd ed.). London, UK: A&C Black. Law, J.(2016). current ratio. In A Dictionary of Accounting. : Oxford University Press. Law, J.(2016). liquid ratio. In A Dictionary of Accounting. : Oxford University Press. Law, J.(2016). Return on Assets. In A Dictionary of Accounting. : Oxford University Press. Liquidity. (2014). In J. Downes, & J. E. Goodman, Dictionary of finance and investment terms (9th ed.). Hauppauge, NY: Barron's Educational
Prospectors Opportunities Mature market – The organization currently operates in a mature market. However regardless of the expected drop in growth rate, the brands within the market will start positioning themselves in the marketplace, and there will be increase in competition for Market Share in the Industry. This creates an opportunity for the organization to develop a strong unique brand that’s meaningful to the target audience. Developing an effective grand will strategically position the firm against competitors. Mergers & Acquisition – There is an opportunity for Baldwin to consolidate with other firms in the industry.
= 1.47 Big Lots have a current ratio of 1.47 which is larger than 1 and indicates that they would have adequate funds available to pay their short-term obligations. With Big Lots having a current ratio of $1.47 for each dollar in current liabilities would indicate that they are maintaining their total current assets favorably to cover their current liabilities that are due
The business used this information to make a strategic decision. They had to decide how to raise gross sales and revenue. John Lewis created and
In this situation I would not want to shut down any of my community based organizations. Knowing that the closure would lead to loss of jobs and affect the community as a whole. For starters I would look over our budget to see if there where any areas that I could possibly cut cost or do without. Going by a budget can also help you minimize risk for future obstacles. By eliminating unnecessary cost hopefully will increase funding so that layoffs will not be my only option.
Established in 1978, Whole Foods Market opened its first store in Austin, Texas in 1980. This natural supermarket was the first certified organic food supermarket in the U.S. Now, 456 stores stretch across the nation, Canada, and the U.K. (see appendix A with the various states and locations) with 35,000-50,000 SKU’s lining the shelves. Whole Foods sets high standards for not only it’s product freshness but also expectations of employees. High customer service, environmental stewardship, positive impact on local and global communities, and high return on invested capital has made Whole Foods Market an industry leader being 5th largest public produce and food retailer.
Thus, they are in a position to cover any debt obligations that may come up quickly. Their inventory turnover has been relatively steady over the five years of data. In year 7 their inventory turnover reached 3.2 which means inventory is moving through to customers at an increased rate over the year which correlates with their increased sales. This statement is supported by the fact that the days inventory held for stoves has dropped over the past five years from 146 days in year 3 to 114 days in year 7. These reductions have allowed for the reduction of their days in accounts payable from 51 all the way down to 11.
The debt to ratio is a ratio that compares a firms total liabilities and shareholders’ equity. It shows the proportion of the amount of money invested by the business owners as well as external entities. Debt to Equity Ratio = Total Liabilities/Shareholders’ Equity = $80,994/$931,490
M8: Assignment 3 Deniro Dawson Justin Palyvoda Caitlin Gayle Po Melanie Shane INFO 290_21 Professor Chen Macy’s vs. JCPenney Word Count: 1205 Introduction Macy's, Inc. is a retail company operating stores, websites and mobile applications under various brands, such as Macy's. The Company sells a range of merchandise, including apparel and accessories, cosmetics, home furnishings and other consumer goods.
1) a. current liability: Money that a business owner must pay to a creditor within 12 months of the balance sheet date is a current liability. Ideally, short-term assets, such as cash and accounts receivable, should more than offset short-term liabilities, such as accounts payable, notes payable and payroll. If they do, the company 's short-term liquidity position is positive, which suggests the company will likely meet its cash-flow needs and remain a going concern. It is wise for a business owner to remain alert to his company 's current liabilities and the cash and assets that will be turned to cash within one year to meet these obligations. 1) b. Long-term liabilities are due more than a year after the balance sheet date.
Tangible Assets Intangible Assets Stores located at high luxury streets such as New York, Las Angeles which targets high income households The famous designers that have worked in Tiffany & Co such
Just recently, Macys cut costs on their high-end beauty products to raise their market share and caused a slight downfall in Ulta's sales. (Jul
A debt ratio of more than 1 indicates that a company has more debt than assets. Also, a debt ratio of less than 1 indicates that a company has more assets than debt. The results confirm that American has more assets than debt and investors can determine the company’s level of risk. Basically, American has more money coming in than the debt
Walmart collects its receivables within 4.5days and Target by 5.6days. The inventory turnover ratio when comparing with the entire sector the two firms have low turnovers. It takes nearly 45 days for Walmart for turning its inventory and Target takes 60days and sector takes nearly 33 days. The Asset turnover of Walmart is compared higher than Target and the sector. (Exhibit I) Costco Wholesale Corporation- It is an US membership-only warehouse club that provides a wide selection of merchandise.
According to the article, All Customers Are Irrational: Understanding What They Think, What They Feel, and What Keeps Them Coming Back (200(9) removing marketing and sales can increase profitability within a corporation. Therefore, the overall profitability is increased by markteing and sales not existing in Portfolio Recovery Associates. However, strategy can help with more productivity in the local office. So, Tennessee Regional Office can improve its profitability based off
Exposure to credit risk is managed in part by obtaining collateral and corporate and personal guarantees. Counterparty limits are established by the use of a credit classification system, which assigns each counterparty a risk rating. Risk ratings are subject to regular revision. Liquidity Risk Liquidity risk is the risk that the company is unable to meet its payment obligations associated with its financial liabilities when they hall due and to replace funds when they are withdrawn. GK’s liquidity management process, as carried out within the Group through the ALCOs and treasury departments includes: o Monitoring future cash flows and liquidity on a daily basis o Maintaining a portfolio of highly marketable and diverse assets that can easily be liquidated as protection against any unforeseen interruption to cash flow o Maintaining committed lines of credit Currency Risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.