Trader Joe's - Ratio Analysis
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TRADER JOE’S – RATIO ANALYSIS REFRESHER
INSTRUCTIONS
: Conduct a financial analysis of the four firms in the supermarket industry with the
data provided below.
Questions
:
1.
In general, what does the data show with respect to the supermarket industry (overall margins and asset turnover)? Support your answers with data.
Supermarket industry runs on low profit margin as the net profit margin is low ranging from -2.88 % to 3.39%. Assets are used optimally to obtain high revenue as supported by high asset turnover ratio
2.
Does one firm have a competitive advantage? Support your answers with data (e.g., Profit Margin, ROA, ROE)
Yes the firm whole foods looks to have advantage as they have best ratios like ROR, Asset turnover and ROA.
3.
Calculate Profit Margin and Turnover. What do these ratios suggest with respect to the different strategies pursued by the four firms?
Ratios suggest that industry is using assets optimally and profit ratios vary for company to company
due to different strategies. Some firms depends on equity and other on assets more for turnover
Whole Foods
Kroger
Safeway
Supervalue
Revenue
$10,107,787
$90,374,000
$43,630,200
$36,100,000
COGS
$6,571,238
$71,494,000
$31,836,500
$28,081,000
Gross Profit
$3,536,549
$18,880,000
$11,793,700
$8,019,000
SG&A and other
$2,988,929
$17,602,000
$10,659,100
$8,538,000
Operating Income
$547,620
$1,278,000
$1,134,600
-$519,000
Net Income
$342,612
$602,000
$516,700
-$1,040,000
Total Assets
$4,292,075
$23,476,000
$15,073,600
$12,053,000
Total Liabilities
$1,300,770
$19,510,000
$11,384,500
$12,032,000
Total Equity
$2,991,305
$3,966,000
$3,689,100
$21,000
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