Activity 2.2 NORDSTROM INC Nordstrom Inc., a prominent US retailer is a leading fashion specialty retailer. The company offers a wide variety of high-end parel, shoes, and secessories for men, women and children The company purses a strategy of high quality, extraordinary service and premium price Dissatisfied with the inconsistent earnings performance in recent years, the company's management has focused in the last two years on impresing its profit performance TIX Companies pursue a strategy quite different from Nordstromst operates off-price apparel and home fashion retail stores through its T. Man and Marshalls stores. The company's strategy is to olier brand-name goods at 20-60 percent below department store regular prices. The company socks to accomplish this by buying opportunistically and by operating with a highly efficient distribution network and low cost structure Nordstrom and TIX seem to follow different investment and financing strategies as well Nordstrom makes significant investment in its stores whereas TIX lases its stores Nordstrom las a credit card operation whereas TIX does not Table 1 Ratio Nordstrom 2018 Nordstrom 2017 TJX 2018 Net Profit Margin 415 389% 535 Asset Tumover 1.61 1.68 2.89 ROA Financial 2,37 1.05 2325 ROE TIX 2018 100% 749) (162) Table 2: Common-Sized Income Statement and Profitability Ratios Nordstrom 2018 Nordstrom 2017 Line Bimasa Percent of Sales Sales or 100 Cost of Sales 1663) (679) Selling, Cineral Administrative pene (280) 273) Other income expense 2.1 22 Net interest expense income 109) 0.7) Income taxes (25) Unusual gain losses nettes Net Income 4.19 3.8% Key Profitability Ratio Gross Profil Margin 33.5% 32.1% EBITDA margin 10.4% 9,74 NOPAT margin 4.79 4:39 Net Marin 4.15 3.9 - 3.4) (0.1) 5.34 25.1% 10.6% 5.39 5.3% 11 1011 Table 3: Other Financial Ration Ratio Nordstrom Nordstrom 2018 2017 Current rutin 2.19 1.71 Quick ratio 1.05 0.73 Cash ratio 0.31 0.03 Operating cash ratio 032 Lilities to equity 1.17 0.95 Interest coverage (Carming based X2 96 078 040 0.35 0.49 1.35 410 With respect to the company's strategy and the information provided a. Examine how successful the management has been in achieving their objective llustrate how the different of their operating, investing and financing stratepies affect their ratios c. Determine which strategy is delivering better perfomance for shareholders Activity 2.2 NORDSTROM INC Nordstrom Inc., a prominent US retailer is a leading fashion specialty retailer. The company offers a wide variety of high-end parel, shoes, and secessories for men, women and children The company purses a strategy of high quality, extraordinary service and premium price Dissatisfied with the inconsistent earnings performance in recent years, the company's management has focused in the last two years on impresing its profit performance TIX Companies pursue a strategy quite different from Nordstromst operates off-price apparel and home fashion retail stores through its T. Man and Marshalls stores. The company's strategy is to olier brand-name goods at 20-60 percent below department store regular prices. The company socks to accomplish this by buying opportunistically and by operating with a highly efficient distribution network and low cost structure Nordstrom and TIX seem to follow different investment and financing strategies as well Nordstrom makes significant investment in its stores whereas TIX lases its stores Nordstrom las a credit card operation whereas TIX does not Table 1 Ratio Nordstrom 2018 Nordstrom 2017 TJX 2018 Net Profit Margin 415 389% 535 Asset Tumover 1.61 1.68 2.89 ROA Financial 2,37 1.05 2325 ROE TIX 2018 100% 749) (162) Table 2: Common-Sized Income Statement and Profitability Ratios Nordstrom 2018 Nordstrom 2017 Line Bimasa Percent of Sales Sales or 100 Cost of Sales 1663) (679) Selling, Cineral Administrative pene (280) 273) Other income expense 2.1 22 Net interest expense income 109) 0.7) Income taxes (25) Unusual gain losses nettes Net Income 4.19 3.8% Key Profitability Ratio Gross Profil Margin 33.5% 32.1% EBITDA margin 10.4% 9,74 NOPAT margin 4.79 4:39 Net Marin 4.15 3.9 - 3.4) (0.1) 5.34 25.1% 10.6% 5.39 5.3% 11 1011 Table 3: Other Financial Ration Ratio Nordstrom Nordstrom 2018 2017 Current rutin 2.19 1.71 Quick ratio 1.05 0.73 Cash ratio 0.31 0.03 Operating cash ratio 032 Lilities to equity 1.17 0.95 Interest coverage (Carming based X2 96 078 040 0.35 0.49 1.35 410 With respect to the company's strategy and the information provided a. Examine how successful the management has been in achieving their objective llustrate how the different of their operating, investing and financing stratepies affect their ratios c. Determine which strategy is delivering better perfomance for shareholders