Course Project 2 Assignment Comparing Kohl's and J.C.Penney Essay
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Khol's Corporation JC Penny Corporation Earnings per share As given in the income statement $3.67 $1.64 The comparison of these two numbers are not meaningful, the number of shares outstanding differs tremendously.
Current ratio Current assets $5,645 = 2.08 $6,370 = 2.41 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. Current liabilities $2,710 $2,647
Gross profit ratio Gross profit $7,032 = 38.2% $6,960 = 39.2% JC Penney's gross profit ratio is better than Kohl's gross profit ratio by almost 1% (39.2% - 38.2%) Net Sales $18,391 $17,759…show more content… Average Total Assets $13,362 $12,811,500
Return on assets ratio Net Income $1,114 = 8.3% $3,890,000 = 3.0% Kohl's efficiency in the usage of its resources is reflected on the return on assets ratio as it earns 8 cents for every dollar of assets as compared to JC Penney's 3 cents earning for every dollar of assets. Therefore, Kohl's is more profitable based on this ratio. Average Total Assets $13,362 $128,115,000
Debt to total assets ratio Total Liabilities $5,462 = 40.3% $7,582 = 58.1% Kohl's require to liquidate 40.27% of its assets at their book value to satisfy their obligations while JC Penney must liquidate 58.14% of its assets at their book value to satisfy their obligations. This ratio tells us that the stockholder's interest is larger at Kohl's compared to JC Penney. Total Assets $13,564 $13,042 Kohl's ability to pay its obligation is in a better position compared to JC Penney based on this ratio. Kohl's times-interest earned ratio is significantly higher than JC Penney.
Times interest earned ratio Net Income + Int Expense + Tax Expense $1,914 = 13.6 832 = 3.6 Interest Expense $141 231 Not Applicable - Kohl's did not declare and pay dividend on 2010.
Payout ratio Cash dividend declared on common stock = Not Applicable $189 = 48.6% Net