Financial Statement Analysis-Macys Essay - 2571 Words

Macy’s, Inc | Macy’s, Inc. Financial Statement Analysis 2011 | Alisa Hitchman | 11/6/2012 | RMA INDUSTRY NUMBERS FOR RETAIL DEPARTMENT STORES Liquidity Analysis BEST AVERAGE WORST Current Ratio 4.6 2.6 1.5 Average Collection Period 0 1 7 Day’s Inventory on Hand 36 107 136 Asset Analysis Fixed Asset Turnover 88.4 13.6 3.5 Total Asset Turnover 3.7 2.3 1.3 Debt Analysis Debt/Worth Ratio 0.4 1.4 3.9 TIE Ratio 8.3 3.1 1.3 Day’s Payable 8 31 42 Profitability Analysis PRE TAX Profit Margin NA 10.7 NA PRE TAX ROE 38.7 14.3 5.9 PRE TAX ROA 18.1 4.6 3.0 Introduction Macy’s, Inc. is a chain of department stores in the U.S. that has 800†¦show more content†¦The reason for this is due to common sized current assets of 39.7 being 42% below the average of the industry at 68.2 while common size current liabilities of 28.3% is only 1.7% below the RMA common size of 29.1%. Average Collection Period RMA ’11 ’10 % Change Best Average Worst 6 days 5 days 20 % 0 days 1 day 7 days The average collection period of Macy’s increased 20% from 5 days to 6. This is due to an 8.9% increase in accounts receivable and despite a 5.6% increase in sales. At 6 days, Macy’s average collection period is 500% worse than the industry average of 1 day but 14% better than the RMA worst of 7 days. It is worse this average despite the fact that accounts receivables is just 1.7% and is 22.7% lower than the 2.2% of the common size RMA. Therefore, Macy’s has less credit sales but takes a longer time to collect them. Day’s Inventory on Hand RMA ’11 ’10 % Change Best Average Worst 118 days 115 days 1.7 % 36 days 107 days 136 days Macy’s days of inventory on hand increased 1.7% from 115 days to 118 days. This is due to a 7.5% increase in inventory and despite a 6.2% increase in cost of goods sold. At 118days this is 10.2% worse the industry average of 107 days and even 13.2% better than the industry worst which is 136 days. Is is longer than average because of cost of goods sold of 59.6% is 5.2% less than the RMA common size of 62.9% and despite the company’s common size inventory of 23.2% being 43.8%Show MoreRelatedAnalysis Of Macys, Kohls And Burlington1544 Words   |  7 PagesIntroduction The companies that were chosen for a company analysis include Macy’s, Kohl’s, and Burlington. Since the retail industry has been lagging behind lately, these companies will help determine the prospective financial investment in the retail industry. As Macy’s as our primary company, we chose Kohl’s and Burlington to be the two comparative companies. These companies are comparable due to the same SIC code of 5311 in the subgroup of department stores. 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