Answering Question 1 only
Defining the ratios and the values are presented in the table attached
Gross Profit Margin = Gross profit/ Sales
Operating Profit Margin = Operating Income/ Net Sales
Net Profit Margin = Net Income/ Net Sales
Times Interest Earned Coverage = Earnings before Interest and taxes / Interest payable on Bonds & Debts
i.e = Operating Income/ Interest expense
Return on Shareholder’s Equity = Net Income / Average Shareholders’ Equity
Return on assets = Net Income/ Total assets
Long term Debt to Equity ratio = Long term Debt / Total Shareholders’ Equity
Days of Inventory = (Average Inventory/ COGS) x 365 days
Inventory Turnover = Sales/ Inventory
Average Collection Period = (Accounts Receivables/ Net Sales) x 365 days
Quite evidently it can be seen, all the ratios have seen a decline in performance from 2015 to 2016. The Gross profit margin has remained more or less the same, however operating profit & Net Profit margins have seen a dip. From the investors' perspective, the Return on Equity has seen a sharp decline, this certainly doesn't augur well for the investors.
On the operational front too the performance has weakened, days of inventory has gone up and the Inventory turnover ratio has fallen. This would only increase the Inventory Holding costs. Collections have improved slightly but not of much avail if other costs keep shooting up.
success. It involves using the results of both industry and competitive analysis and com pany situation...
h. Days of inventory. 1. Inventory turnover ratio. J. Average collection period Based on these ratios, did Macy's financial performance improve, weaken, or remain about the same from 2015 to 2016? (479) 198 Consolidated Statements of Income for Macy's, Inc., 2015-2016 (in millions, except per share amounts) 2016 2015 Net sales $25,778 $27,079 Cost of sales (15,621) (16,496 Gross margin 10,157 10,583 Selling, general and administrative expenses (8,265) (8,256) Impairments, store closing and other costs (288) Settlement charges Operating income...
ASSURANCE OF LEARNING EXERCISES 1. conn LO4-1 Using the financial ratios provided in the Appendix and the following financial statement information for Macy's, Inc., calculate the following ratios for Macy's for both 2015 and 2016. 1. Gross profit margin 2. Operating profit margin 3. Net profit margin 4. Times interest earned coverage 5. Return on shareholders' equity 6. Return on assets 7. Long-term debt-to-equity ratio 8. Days of inventory 9. Inventory turnover ratio 10. Average collection period Based on these...
Ratios 2016 2015 a. Gross profit margin (%) 39.4 39.1 b. Operating profit margin (%) 5.1 7.5 c. Net profit margin (%) 2.4 4.0 d. Return on shareholders' equity (%) 14.1 25.2 e. Return on assets (%) 3.1 5.2 f. Times interest earned coverage 3.6 5.6 g. Long-term debt-to-equity ratio 1.5 3.8 h. Days of inventory 126.2 121.8 i. Inventory turnover ratio 2.9 3.0 j. Average collection period 7.4 7.5 1-From 2015 to 2016, Macy’s, Inc., return on equity and...
What is the inventory turnover rate of this company? January 30, 2016 January 31, 2015 $ $ 2,246 424 1,109 558 5,506 479 7,652 7,616 3,897 514 897 20,576 5,417 493 8.580 7.800 3,743 496 711 21,330 $ $ S ASSETS Current Assets Cash and cash equivalents Receivables Merchandise inventories Prepaid expenses and other current assets Total Current Assets Property and Equipment - net Goodwill Other Intangible Assets-net Other Assets Total Assets LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Short-term debt...
I was provided both the Balance Sheet and Statement of income from which I am supposed to calculate the inventory turnover ratio. But the balance sheet only has the inventory values for 2016 and 2015, while the statement of income only states the cost of sales for 2015, 2014, and 2013. So: Merchandise inventory (from balance sheet): January 30, 2016 = $5,506 January 31, 2015 = $5,417 Cost of Sales (from income statement): 2015 = $16,496 2014 = $16,863 2013...
11) Consider a retail firm with a net profit margin of 3.5%, a total asset turnover of 1.8, total assets of $44 million, and a book value of equity of $18 million. a. What is the firm's current ROE? b. How does it compare with Macy's data for 2018? c. If the firm increased its net profit margin to 4%, what would its ROE be? CIS, C . CONSOLIDATED STATEMENTS OF INCOME (millions, except per share data) 2018 24,971 $...
please show all work. LO1, 2, 3 MACY'S INC. M3-26. Compute and Interpret Disaggregation of DuPont Analysis Ratios Selected balance sheet and income statement information for Macy's Inc., a retailer, follows. 2015 2015 2015 2014 Company ($ millions) Ticker Sales Net Income Assets Assets Macy's............. M $27,079 $1,072 $20,576 $21,330 $4,250 $5,378 2015 2014 Stockholders' Stockholders' Equity Equity a.Compute Macy's 2015 return on equity (ROE). b.Disaggregate ROE into profit margin, asset turnover, and financial leverage. Confirm that ROE = PM...
Part 1: Ratio Analysis calculate the following ratios Part 2: Perform a vertical analysis of statement of financial position & Income statement Part 3: Perform a Horizontal Analysis of statement of Financial Position for 2015 and 2014 & Income statement for 2015 Instructions: 1. On pages three and four, you will find condensed statement of financial position and income statement data for Waterloo Corporation. 2. Use the same information to answer all the three parts. 3. Part 1: a. In...
Using the following information: Calculate the following ratios for Urban Outfitters for both 2016 and 2017 (show calculations): a. Gross profit margin b. Operating profit margin c. Net profit margin d. Times interest earned coverage e. Return on shareholders’ equity f. Return on assets g. Debt-to-equity ratio h. Days of inventory i. Inventory turnover ratio j. Average collection period Consolidated Income Statements for Urban ters, Inc. 2016 2017 $3.545.794 $3,445,134 Net sales (total revenue) 2,301,181 2,243,232 Cost of sales 906,086...
Refer to the January 29, 2016, income statement and balance sheet of Lowe's Companies Inc. below. LOWE'S COMPANIES INC. Income Statement (In millions) For Fiscal Year Ended January 29, 2016 Net sales.............................................. Cost of sales.................................. ... Gross margin ....................................... Selling, general and administrative Depreciation.. tion......................................... Interest-net........................................ Total expenses... Pretax earnings Income tax provision ... Net earnings $59,074 38,504 20,570 14,115 1,484 552 16.151 4,419 1,873 $ 2,546 Required: Compute the following liquidity, solvency, and coverage ratios for Lowe's Companies. Interpret...