Accounting and Finance: Managerial Use and Analysis Essay

1658 Words Oct 17th, 2012 7 Pages
Rahul Balhara
Accounting and Finance: Managerial Use and Analysis MAR12 Sec C
Financial Statement Analysis Project -- A Comparative Analysis of Kohl’s Corporation and J.C. Penney Co MAR12 Sec C
Analysis of Kohl’s Corporation and J.C. Penney Corporation

J.C. Penney was founded by James Cash Penney in 1902. This Plano, Texas based company is presently providing family apparel and footwear, accessories, jewelries, beauty products and home furnishings via 1,100 department stores as of December 7, 2011 in the United States and Puerto
Rico. The company is also taking advantage of technology by making JC
Penney's products available online through its Internet Web Site jcpenney.com. This more than a century old company also
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$1.64
JC Penney has $2.41 in current assets for every $1 dollar in current liabilities while Kohl's has only $2.08.
JC Penney is more liquid based on the current ratio.
=
2.41
JC Penney's gross profit ratio is better than Kohl's gross profit ratio by almost 1% (39.19% - 38.24%)
=
39.19%
0.95

Kohl's is more profitable based on the profit margin ratio because it earns 6 cents for every $1.00 in sales as compared to 2 cents earning per $1.00 of
JC Penney.
=
2.19%
Kohl's inventory turnover is slightly better by .3 than
JC Penney. This might indicate that Kohl's volume of sales in terms of inventory is better than JC Penney. 3.5 times The result of the days' in inventory is consistent with the inventory turnover. The result is in favor of
Kohl's. Kohl's has the ability to sell its inventory 9 days (105-96) ahead compared to JC Penney.
=
105 days Not applicable - there is no accounts receivable on
= Not Applicable the annual report of both companies. Not applicable - there is no accounts receivable on
= Not Applicable the annual report of both companies. The result of this particular ratio is almost identical;
JC Penney is irrelevantly better than Kohl's.
=
1.39
=
3%
Kohl's efficiency in the usage of its resources is
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