Use this Excel spreadsheet to compute ratios; show your computations for all ratios on this tab and also include your commentary.
The financial statements used to calculate these ratios are available in Appendix A and Appendix B of your textbook. Kohl’s J.C. Penney Interpretation and Comparison between the two companies' ratios (Reading the Appendix of Chapter 13 will help you prepare the commentary) Earnings per share As given in the income statement $3.67 Basic Common $1.60 Earning per share express net income earned on a per share basis which provides a useful information for shareholders to determin profitability .Kohl's earning per share is lot higher than JC Penne.…show more content…
Average Net Receivables Not available NOT AVAILABLE Average Collection Period 365 365 = Not available 365 = Not available This is not availble because they outsourse their receivables. Receivable Turnover Ratio Not available days Not available
Net Sales $18,391 = 1.38 $17,759 = 1.39 This is measures how efficiently a company uses its assets to generate sales. Both JC Penne and Kohl's have about the same ratio.
Assets Turnover Ratio Average Total Assets $13,362 $12,812
Return on Assets Ratio Net Income $1,114 = 8.3% $389 = 3.0% The return on assets ratio measures the overall profitability of assets in terms of the income earned on each dollar invested in assets. Kohl's has a 8.3% but JC Penne only has 3.0%. Average Total Assets $13,362 $12,812
Debt to Total Assets Ratio Total Liabilities $5,462 = 40.3% $7,582 = 58.1% This measures the percentage of total financing provided by creditors. JC Penne has a higher rate than Kohl's which means their degree of financial leverage is higher than Kohl's. Total Assets $13,564 $13,042
Times Interest Earned Ratio Net Income + Int Expense + Tax Expense $1,923 = 13.6 823 = 3.6 This indicates the company’s ability to meet interest payments as they come due. In this solvency ratio Kohl's has a better rate than JC