Should I Invest in Jc Penney

1406 Words Jun 2nd, 2013 6 Pages
Should I Invest in JC Penney
Nadia shelchkov
Wilmington University

Abstract
This paper explains and explores the financial statements of JC Penney and its four top competitors: Kohl 's, TJX, Wal-Mart, and Target. It analyzes their net profit margin compared with industry, return on assets, return on investment, return on equity, price-earnings ratio, inventory turnover, Beta, etc. and then compares these variables to the other stores. This information gets analyzed from an investors point of view and also states my opinion on investments and which company I would invest in.

Should I Invest in JC Penney JC Penney was founded in 1902 by James Cash Penney who wanted to build a store based on what he referred to as the "Golden
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This means that JC Penney turns over their inventory 2.5 times during year. TJX turns over their inventory 5 times during the year, in fact TJX is the only competitor whose turn over inventory average is above the industry average. As stated in Fundamentals of Corporate Finance by Stephen A. Ross, the Beta indicates "the amount of systematic risk present in a particular risky asset relative to that in an average risky asset" (427). The Beta for JC Penney and TJX is above industry average- that means that these companies would have a greater expected return. Systematic risk or market risk is the risk that affects a large number of assets. Examples of systematic risk are inflation or increasing the interest rate, or any uncertainties in the economy but not the company 's performance. Unsystematic risk is the risk that mainly associated with specific companies or may be some competitors and suppliers. The systematic risk affects the whole market and cannot be controlled by investors. Unsystematic risk however affects the company and is controlled by the company 's performance. When investors invest money into a company they must research all aspects of that company so they are aware of the unsystematic risks they may encounter. JC Penney is an unfavorable choice for investors because the company analysis indicates that the company is unprofitable. Along with the bad financial analysis and
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