The Company 's Optimal Capital Structure For Short And Long Term Success

Grand Metropolitan's P/E ratio is noticeably lower when compared to the other companies within its segmented segments. We found that these low P/E ratios combined with increased profits made Grand Metropolitan a potential target for corporate raiders, i.e. takeover risk.

ACC 300 FSA Project Ratio Analysis of The Kroger Co. and Whole Foods Market, Inc. TEAM Jake Eriksen (002) Brycen Goldstein (002) 16 Ross Wright (001) Nicolas Kim Omar Harb (001) (002) Kroger The Kroger Co. (referred to as Kroger) is a large grocery chain audited by PricewaterhouseCoopers LLP.

The purpose of this paper is to compare the financial health of The Fresh Market and Kroger. The Fresh Market and Kroger focus on selling organic food. The Fresh Market is a 1.7 billion corporation compared to Kroger 108 billion. The information was obtained from the 2014 Balance Sheet and Income Statements for both grocery stores. . There are three different categories of ratios; liquidity, profitability and efficiency. Ratios enable one to not focus on the size of the company, but on the liquidity, profitably and efficiency and the overall financial health of the organization.

Trader Joe’s is in the broad market of grocery retailers, a market where the top 10 revenue-generating companies accounted for over $360 billion in sales in 2011. This market is saturated with supermarkets (Publix and Kroger), large discount retailers (Wal-Mart and Target), premium retailers (Whole Foods and Fresh Market), warehouse clubs (Costco and Sam’s Club), and “hard discount” retailers (Dollar General). With this large variation in grocer strategies, the market is heavily penetrated and competition is fierce. Supermarkets are continually losing market share in grocery sales (51 percent in 2011 as opposed to 66 percent in 2001) as players like Wal-Mart and Costco continue to generate more revenue. Although the supermarket share is decreasing, the overall grocery market is steadily increasing as the population of the United States increases. People always need to eat, so there will always be a

1. The grocery industry is a commoditized industry, which makes it difficult for grocers to sustain through differentiation. Buyer power is high and thus, cost leadership and operational efficiencies are critical. There is fierce competition amongst various grocery stores, with the main players such as Loblaw and A&P holding multi-banner stores in various market segments. Traditional grocery stores also lose some of their market share to drug stores, convenience stores and other retailers who have entered the industry. Threat of substitutes from fast-food and take- away outlets is not as prevalent, since many grocery stores have started stocking ready-to-eat meals and have deli services available for consumers. Competitive

In the United States, the food retail industry is absolutely massive. According to Statista, this industry brings in nearly 5.27 trillion dollars annually and 594.4 billion of that is from grocery store sales. In this market, the 20-ton gorilla in the room is Walmart, racking in nearly 20% of the entire market at around 118 billion dollars in 2013 according to the Harvard Business School case study. Following Walmart, Kroger and Costco own the biggest next largest slices bringing in 76 billion and 71 billion respectively. In this highly competitive market that has some of the smallest margins of any industry it can be tough to get ahead and even tougher to grow. However, Trader Joe’s has managed to pierce what was once a very small world

Grocery shopping is more diversified and evolved than ever before. Individuals across the nation have access to everything from exotic products to unique delivery services. Often, specialty stores have limited locations whereas specialty services have a limited reach. However, two retailers have expanded to hundreds of locations while adhering to unexpected market positioning for previously untargeted market segments. Whole Foods Market and Trader Joe’s have become household names while also innovating beyond regional and national traditional chains. Despite comparable size in

In 1975, Hi-Value Supermarkets became a division of Hall Consolidated, a privately owned wholesale and retail food distributor. In 2002, Hi-Value had sales of $192.2 million, which was the smallest out of the three supermarket chains owned by Hall Consolidated. Although Hi-Value is considered small against industry standards, they were the number one or two ranked supermarket chain in each of its trade markets measured through market share. The primary problem that Hi-Value has developed is that they are the highest priced compared to the competitors within the region. The Hi-Value Supermarket Shopper Interview Results (Exhibit 7 in case) demonstrates this through the question “Liked most about other regular store,” the most popular answer across the board was “Price.” So what is Hi-Value supposed to do?

Superior Supermarkets is in need of a strategic program to help fuel continued growth, market share, and profitability. The current issue of a new pricing strategy is warranted, considering competitive forces, increasing consumer price consciousness, and recent sales being below budget. Table 3 illustrates how SS compares to its competition in terms of product distribution – a lower percentage of grocery and higher percentage of meats and produce. This table also depicts that lower percentage of sales exist for high profit margin items. This information can be supplemented by recent consumer research carried out through telephone surveys and two focus groups.

It has been said that U.S. food spending is increasing, but unfortunately, supermarkets are not making what they should be. Between the alternative grocery methods, and other such societal shifts, this has caused some supermarket chains to have to focus on their more profitable stores, and exit from the less profitable areas. Even though such value-oriented grocers as Walmart are making it very difficult for conventional supermarkets to compete based on price, Publix continues to lead in the supermarket industry where they made $548 per square foot annually. In addition, Publix’s net earnings in the beginning of 2010 were up to $996 million, compared to $877.3 million in the previous year (Mujtaba & Johnson).

Loblaw Companies is one of the largest food retailers in Canada, owning well maintained brands such as NoFrills, Real Canadian Superstore, and Shoppers Drug Mart. With its focus of fresh produce, real Canadian pork, and low prices on other instore food products, Loblaw’s had created well-established branding for themselves in the local communities. However, in the past few years, Loblaw’s Companies have faced an ever-growing competitive market, with other retail competitors such as Walmart, Costco, and Drugstores expanding in the food retail industry. It is sourced

Nevertheless, the use of the Optimal Capital Structure (OCS) is the right techniques to be used in order to acquire the right combination of debt and equity that can maximize the

Treating all of Canada as one market has many advantages. A company typically implements a global strategy when it wants to save money. A company can be more effective when it sells the same products to every market, because there is no extra time spent on differentiating the products per market, which means there are also no extra costs. Money is saved from buying in bulk and having a standard packaging. In return, the company can put more focus on the product and work towards changing and enhancing the product. The case states that the market share of Saralyn Mills has increased in each of the product categories in which it competes. By implementing a standardized strategy,

Marketed as ‘America’s healthiest grocery store’ the company has successfully grown to 408 stores across the world with sales of $14 billion in 2014 (Whole Foods Market, 2015). The firm is positioned as an upmarket grocery due to the emphasis on natural, organic origins, and as a result are able to charge a premium for their products. Through efficiently running its operations and stores, Whole Foods are able to maintain healthy 4.02% profit margins (Financial Times, 2015) and operating margins well above the American grocery store industry average at 6.58% (Bloomberg, 2015). Looking at 2015’s quarter 1 figures it is clear to see that Whole Foods have had a hugely successful year with sales of $4.7 billion, up 10% from the same period last year. Furthermore, they opened 9 new stores and have signed a further 11 new leases.

The purpose of the report is to understand the capital structure of the chosen company on the basis of the financial statements of the company which includes the income statement, balance sheet and the cash flow statement of the company and do the capital analysis of the company as well to find out the advantages and disadvantages in working capital of the company and suggest company logical and useful ways for growing their economy.