Nordstrom’S Was Established In 1901 And Was A Retail Store

Profitability ratios are used to measure the overall efficiency of thebusiness, as well as management effectiveness. Examples of profitability ratios include the gross margin ratio and the net margin ratios.

The profitability ration in a financial analysis is the ability of the organization to generate a profit. This ratio looks at areas such as net income, revenue, gross profit, earnings before taxes and interest and operating profit to name a few. Profitability shows the bottom line numbers for a company and is the goal that most organizations strive for. Ratios examined were gross profit margin and net profit margins

Identify the type of retailer that Nordstrom’s is classified as. Describe the characteristics it shares with other retailers of this type.

g. The stock price at the end of the 2010 fiscal year was $40.91(Jan 28, 2011) compared to $34.54 at the beginning of the 2010 fiscal year (Jan 29, 2010). Company stock was at a low point at the beginning of the 2010 fiscal year. It reached a peak value of around $46 in April. The stock reached a low point around $28 in September. It climbed up to $42-$43 by early November. It was quite stable from November to end of fiscal year. The stock price for Nordstrom, Inc (JWN) was 50.67 on 10/10/11.

These ratios will help us see how effective a company is at using their sales or assets and turning this into income.

Since Nordstrom opened, the company has achieved critical acclaim for outstanding customer service and inventory selection. Sales have always been on the rise with the exception of a slight dip after the economic recession, but were quickly regained with the expansion of Nordstrom Rack stores. To exemplify this, the company report is divided into four

Macy’s is a departmental store which is owned by Macy’s, Inc. Macy’s is consistently ranked in top 5 positions amongst the departmental store's category. In 2015, Macy’s was the largest departmental store in terms of retail sales (Schulz, 2015). Macy’s flagship store at Herald Square, New York is one of the largest stores in the world (Malcolm, 2014). However, Macy’s performance has worsened in the last few years. In fact, due to poor holiday season sales, Macy’s is planning to close about 100 of its stores (Brownfield, 2017). Thus, I chose Macy’s as a retailer of my choice to look into details of its financial condition and outlook. During my research, I came across multiple articles on yahoo’s finance website. I chose an article from marketrealist.com

Threat: Forces shaping the Nordstrom’s strategy is that it is operating in highly competitive environment, where apparel sold by it is not only competing with large organized departmental chains but, also from small independent boutiques in the U.S. As a result competition has become very stiff in retail

The purpose of this memo is to propose an expansion opportunity that will significantly impact Nordstrom business operations and increase stakeholders returns. Furthermore, this opportunity will allow Nordstrom to achieve competitive advantage by successfully operating in developed and growing economies. In addition, Nordstrom will be able to survive the vulnerability of the United States economy through this expansion opportunity. Nordstrom, Inc. is a famous American fashion company that was established in 1901 and sells women, men and children’s apparel, footwear, accessories and cosmetics. In addition, provide other services such as: loyalty programs, credit finance and product fulfillment services (About Nordstrom, n.d.).

Financial ratios are great indicators to find a firm’s performance and financial situation. Most of the ratios are able to be calculated through the use of financial statements provided by the firm itself. They show the relationship between two or more financial variables that can be used to analyze trends and to compare the firm’s financials with other companies to further come up with market values or discount rates, etc.

Nordstrom’s employees and management are the company’s most valuable resource. An article written in the Seattle PI describes exactly why this is true. It states that, “Nordstrom salespeople make decisions as if managing their own business; they are trusted to do what is right. Everyone else in the company is there to help the sales staff make the sale and please the customer” (Mulady, 2009). The way the employees are treated and valued is a perfect portrayal of the company’s mission of providing the best possible customer service and value to the customer.

Profitability (performance) ratios are used to assess a company’s ability to create equity as compared to its debt and other appropriate expenses created during a particular time frame. A favorable analysis of profitability ratios will reveal that a company’s value is higher than a competitor’s value.

Profitability ratios refer to the relative measure to what an actual created profit. Through these ratios the company is allowed to see how profitable the company. In addition it can serve as an examination of the overall performance of the company’s operations and how do these compare to past performances or other companies. The ratios in which accounting measures the profitability of a company are Profit Margin, Price over Earnings, Return on Equity and Return on

The product life style of the department store is in the mature or declining phase of its product life style, because of the declining sales. Furthermore, according to estimates, market share has eroded away to 7 per cent, as of 2010, and is far below the desirable rate 15 per cent (Johnson, 2011, p. 3). Also, the brand image is being heavily relied upon and the bottom line is not showing significant increase in the years presented in the journal article. Macy’s is afloat due to a strong management team and the aggressiveness to deal with problems as they arise. For example, continuing to adjust its portfolio of stores, focusing on fashion, and developing private labels in bedding, outerwear, ‘tween’ clothing, increase national advertising and using celebrities. Additionally, Macy’s advertising is combining the national department store image with July 4 and the Annual Macy’s Thanksgiving Parade, which appeals to the American citizen. Solution

Ratio analysis is generally used by the company to provide some information on how the company has performed during that year, so that the parties involved including shareholders, lenders, investors, government and other users could make some analysis before making any further decision towards that particular company. As mentioned by Gibson (1982a cited in British Accounting Review, 2002 pg. 290) where he believes that the use of ratio analysis is such an effective tool to evaluate the company’s finance, and to predict its future financial state. Ratios are simply divided in several categories; these are the profitability, liquidity, efficiency and gearing.