Our last assignment for the course involves two companies in retailing. Both of these companies have...

Question

Our last assignment for the course involves two companies in retailing. Both of these companies have stores here on the central coast. You will have the most recent annual report for each company. There are at least three years of income statement, so I will expect to horizontal analysis on their income statements.

For each company, a full analysis is required on each. As a pattern, you can use the sample spreadsheet which was made available in case one. Please remember to complete of the required comparisons and ratios.

In addition to all of the quantitative analysis, a separate write up is required for each company. Please remember the viewpoint of your write up is the Chief Financial Officer of the company. What is your company doing well? What are the strengths of the company and why are these areas strengths? In which areas are you concerned for the company? What has caused you concern? It is expected that your analysis will reveal areas of concern for which you need more information, but you do not have it. Please list these areas which need more investigation and where you would like for the investigation to begin.

Then after the individual write ups for each company are completed, you are required to submit a separate document of comparison and contrast of the two companies. In your comparison, you should look closely at these area within each company. Please use five years of data if you can locate the statements for the last five year.

Sales growth in terms of percentage of increase and the numbers of stores. In you reading of the annual report, are either of the two companies adding product lines?
Look at profitability treads for gross profit, operating profit and net income. How is the profitability changing between the two companies?
Since these are large retail stores, what is the trend in inventory growth. Are the growing the inventory are can the accommodate the sales increases with about the current amount of inventory on hand? Please compare their inventory efficiency with the inventory turnover ratios for each company.
How are the companies handling their long-term debt? What has been the debt to equity ratios in the last five years? Can you tell what has been acquired with the additional debt, if there is any?
Lastly, let’s see what the stock market thinks each company’s performance. In what range has there share price been trading in the last five years? How has the Price to Earnings (P/E) ratio been during that time?
What has taken place with each of these companies since the Annual Statement date? Search for new releases and other business articles publications about each company.

To accomplish this, you will want to each the comments from each company about its year. Please check the news releases on each of the company’s web sites because one of the company has a release about store closings. New releases are usually found on the website under Investor Relations.

jcpenney-10-k-finstmts-2017-01-ugf1vhl4.pdf kohls-finstmts-2017-01-em2p4azq.pdf a-analytics-suggested-format-kbvtdlt0-pvz0ufp2.xlsx a-write-up-suggested-guidelines-h0ydtjcw-ed02e154.docx

Khushboo · Accepted Answer

KOHL’S CORPORATION
Kohl’s corporation is the American department store chain that was started as a corner store. It is departmental store having clothing electronics and accessories and basically it is targeting upper middle- and upper-class individual. This entity is having various strength such as it is having more than thousand stores and it has entered S&P 500 and this chain is one of the 20 largest retailers in the United States (Annual Report 2019). Further the performance of the entity in terms of revenue performance is high on year-to-year basis. The entity is having brand name merchandise and other goods. On the other hand it is having one weakness of lacking global presence specially in emerging economies.
J C PENNEY CORPORATION
JC Penney is a chain of American mid-range departmental store serving middle class and upper middle- class families. This entity is having various strength such as it is having more than eight hundred stores (Annual Report 2019). Further the performance of the entity in terms of revenue performance is good and increasing annually. The entity is having brands name merchandise and other goods. On the other hand it is having one weakness of limited global presence specially in emerging economies.
COMPARISON AND CONTRAST OF THE TWO ENTITIES
Sales Growth
KOHL’S CORPORATION
The sales of the entity are showing growth in the past four year but in the year 2019 the sales of the entity drop by 1.3%. The net sales of the entity consist of sale of merchandise and shipping revenues. The decrease in the sales of the entity is due to the decrease in the sales of every line of business such as Footwear, accessories and others (Annual Report). 
J C PENNEY CORPRATION
The sales of the entity are showing downfall in the past four year. The net sales of the entity consist of sale of merchandise and shipping revenues. The decrease in the sales of the entity is due to the decrease in the sales of every line of business such as Footwear, accessories and others (Annual Report). 
Cost Control
KOHL’S CORPORATION
The entity is performing well in terms of cost control as there is slight decrease in the cost of goods sold of the entity. The cost of goods sold in the year 2016 is 63.9% whereas in the year it is 60.8%. Further the selling and administrative expenses is showing increase which means that the entity is incurring more on the marketing and promotion for increasing the sales of the entity (Katchova, et al. 2013).

Our last assignment for the course involves two companies in retailing. Both of these companies have stores here on the central coast. You will have the most recent annual report for each company....

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