Case Study(Whole Foods)

1481 Words Feb 3rd, 2011 6 Pages
1.) The Whole Foods strategy seeks to provide products of the best quality to its customers by maintaining high standards that the farmers, organic growers must match. The strategy also involves providing best tasting food and foods that are fresh, wholesome and safe to eat. It also involves promoting organically grown foods to exercise their influence on the people and the industry. Customers are the most important stakeholders responsible for the growth of Whole Foods Market, thus satisfying their needs and meeting their every possible demand is key behind the success of this company. Inviting store environments and retail innovation also enhances this. Their strategy involves working efficiently with its vendors, team members and …show more content…
Return on Shareholder’s Equity= (Profits after taxes/Total Equity)
2004 2005 2006 2007
(3,864,950-2,523,816/3,864,950) (4,701,289-3,052,184/4,701,289) (5,607,376-3,647,734/5,607,376) (6,591,773-4,295,170/6,591,773)
= .34699 or .35% = .35 % =. 35 % = .35%
2.NP= .033 % = .050% = .036% = .027%
3. N/A N/A (49+8,606/2,042,996)
= .004 (24,781+736,087/3,213,128)
= .023
4. N/A N/A (203,828/2,042,996)
= .099% (182,740/3,213,128)
= .056%
After analyzing some of the important financial ratios of the company it seems that the Gross Profit is consistent throughout the years 2003-2007 remaining at 35%, however the net profit margin displays another story it has decreased significantly from 2005-2006(.050-.036 %) and from 2006-2007(.036-.027%). The net profit dropped 2.3 % in two years, which is not alarming but the management should look into the reasons behind the decline. The debt-to-equity ratio is used to evaluate borrowing capability and the amount of debt in the company. Usually ratios above 1.0 indicate excessive debt, in the case of Whole Foods Market the ratio has gone up from 2006-2007 (.004-.023), which indicated an increase in the amount of borrowings. The ratio is nowhere close to one, which indicates credit worthiness of Whole Foods Market and their ability to pay back debt. The return on shareholders equity has

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