Financial Analysis of Macy’s Inc. and Nordstrom Essay examples

4026 Words Apr 2nd, 2013 17 Pages
Financial Analysis of Macy’s Inc. and Nordstrom

Macy’s Inc. has established itself as a strong player in the retail industry, with over 850 Macy’s and Bloomingdale’s stores in 45 states. Macy’s competes against retail giants like Nordstrom, Kohl’s, JC penny and Saks Fifth Avenue for market share in the increasingly competitive department store industry. This financial report will choose Nordstrom as the major competitor, and serves as the comparison company.
The annual report and 10-K filings were obtained from Yahoo! Finance. The financial statements for both companies used in this report are Consolidated Statement of Income, Consolidated Balance Sheets, and Consolidated Statement of Cash Flow from 2010 to 2012. All tables are
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In 2011, Macy’s had the 5.6% increase in sales. Because the management was able to control its cost of goods sold (6.17% increase) and SG&A expenses (0.25% increase), plus the big gain from sales of property, the company resulted a 27.3% increase in operating income. In 2010, Macy’s net sales increased 6.45% over 2009, part of it is due to the huge decrease in the impairments, store closing costs and division consolidation costs account.
The interest expense increased in 2010 over 2009, while the same account decreased 22.8% in 2011 over 2010. This decreases benefited from lower levels of borrowings during fiscal 2010 and the repayment of debt at maturity. 2.2 Vertical analysis

2.2.1 Vertical analysis of Balance Sheet
From table 3, we can see that accounts receivables, inventory and other current assets accounts, their percentage of total assets didn’t have big difference over the three years trend. The increase of cash and cash equivalent from 7.1% of total assets in 2010 to 13% in 2011 is the main reason that total current asset in terms of the percentage of total assets had significant increase (from 33% to 40%).
Macy’s total current liabilities represent a slightly higher percentage of total liabilities and stockholders’ equity at FY 2011 than FY 2010 and 2009. This increase is balanced by a slight decrease in the relative percentages of long-term debt.

2.2.2 Vertical analysis of Income

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