Kohls 2013 Annual Report

2657 Words11 Pages
Table of Contents 1. Introduction 2. Return on Investment ROI a. Revenue b. Net Income c. Cost of Goods Sold d. Expenses e. Average Total Assets i. Inventory Turnover 3. Cash Flow Analysis a. Leverage b. Stock Repurchase 4. Statement of Shareholder’s Equity a. Debt to Equity b. Current Ratio c. Competitor Analysis 5. Income Projection 6. Summary The decision to buy, sell or hold Kohl’s stock is a difficult one. Their 2012 financial statements reflect a descending trend in cash, which may be a positive indication of the company reinvesting funds back into the company and distributing dividends to shareholders. However, their financial statements also reflect an increase in total liabilities, which may be a negative…show more content…
In addition, distribution expenses also increased from $187 million in 2010 to $245 million in 2012. The additional expense is a direct result of higher gas prices and the expansion of their E-commerce site. According to the U.S Energy Information administration, “the average price per gallon of gas in the United States in 2010 was $2.70”. “The average price per gallon of gas in the United States in 2012 was $3.54.” (U.S. Energy Informantion Administration, 2012)Oil prices continued to increase as the demand for crude oil intensifies. Moreover, the slight increase in Kohl’s average total assets has impacted their Du Pont ROI. Attributing to the decrease is the increased inventory and significant shrinkage in cash. Inventory turnover “measures how many times inventory turns over in a year.” (Berman, 2006) On average Kohl’s turned inventory 3.81 times in 2010, as compared to 3.53 times in 2012. This calculation of inventory turnover is illustrated in exhibit1.2. On average, the higher the ratio the better the company is at managing inventory it also gives them a better cash position. However, the company anticipated higher sales, but due to external factors mentioned above the company was unable to quickly convert inventory into sales as expected. To move inventory Kohl’s offered discount pricing on merchandise in the last six months of 2012.In anticipation of the 2012 holiday season, Kohl’s spent $523 million on inventory. This investment contributed
Open Document