Better on the present value of future eps how many years of eps did this project and why make those projections?

Nordstrom v Macys Company A: Nordstrom Background Information Nordstrom is a fashion retailer founded in 1901. It offers shoes, clothing, and accessories for kids, women, and men. It is committed to providing its customers with high- quality services and shopping experience. It serves customers through over 350 stores in different locations and its online platforms, including websites and apps. Nordstrom offers a wide selection of high-quality private-label merchandise and brand-name focused on accessories, cosmetics, shoes, and apparel (Nordstrom, 2023). The company operates in a competitive business environment that includes local, national, regional, international, and online retailers that offer similar products and services, including various internet businesses, boutiques, off-price stores, specialty stores, and departmental stores. Recent Financial Statements (2020-2022) Nordstrom, Inc. Consolidated Statements of Earnings In millions except per share amounts) Fiscal year 2022 2021 2020 Net sales $15,092 $14,402 $10,357 Credit card revenues, net 438 387 Total revenues 15,530 14,789 10,715 Cost of sales and related buying and occupancy costs (10,019) 9,344) (7,600) Selling, general and administrative expenses (5,046) 14,953 4,162) Earnings (loss) before interest and income taxes 465 492 (1,047 Interest expense, net (128) (246) (181) Earnings (loss) before income taxes 337 246 (1,228 Income tax (expense) benefit (92) (68) 538 Net earnings (loss) $245 $178 ($690) Earnings (loss) per share: Basic $1.53 $1.12 ($4.39 Diluted $1.51 $1.10 ($4.39) Weighted average shares outstanding Basic 160.1 159.0 157.2 Diluted 162.1 162.5 157.2 Figure L Consolidated Statements of Earnings (Nordstrom, 2022)Nordstrom, Inc. Consolidated Balance Sheets [In millions) January 21, 2023 January 29, 2032 Current assets: Cash and cash equivalents $687 $322 Accounts receivable, net 256 Merchandise inventories 1.841 2.289 Prepaid expenses and other current assets 316 current assets 3,209 3.172 Land, property and equipment. net 3,391 3.562 Operating lease right of use assets 1,470 1,496 Goodwill 249 249 = Other assets 390 Total assets 18,745 58.869 Liabilities and Shareholders' Equity Current liabilities Accounts payable $1,218 $1,529 Accrued salaries, wages and related benefits 291 383 Current portion of operating lease liabilities 258 242 Other current liabilities 1,203 1,160 Total current liabilities 2,990 3.314 Long-term debt, net 2,856 2.853 Non-current operating lease liabilities 1,526 1.566 Other Iabilities 614 565 Commitments and contingencies (Note 12) Shareholders" equity outstanding ammon stock, no par value: 1,000 shares authorized: 160.1 and 159.& shares issued and 3,353 3.283 Accumulated deficit (2,548) (2.652) Accumulated other comprehensive loss (50) Total shareholders' equity 719 581 Total liabilities and shareholders' equity $8,745 38.869 Figure 2-Consolidated Balance Sheets (Nordstrom, 2022) Financial Analysis The company's net sales and total revenues have steadily increased in the last three years. For example, its net sales were $10,357 million in 2020, $14,402 million in 2021, and $15,092 in 2022. This trend is admirable since it was post-COVID as companies struggled to increase their sales amidst various challenges in the supply chains. Earnings Per Share (EPS) EPS = [Net income/total outstanding shares] = [$245/160.1] = $1.53. It shows that the company earns $1.53 in profits for every outstanding share of stock. Operating marginOperating margin = [operating profitftotal revenues] = [550f1i530] = $0.036. It means that each dollar of sales generates an income of$.036. Debt-tocapital ratio = [total debtsftotal capital] = [$4640f$563?] = 0.8. Return on Equityr (ROE) ROE = [Net incomee'shareholders equity] = [$245i'739] = 0.3x100 = 30% Price Earnings PIE ratio PIE = [stock pricefEPS] = [515463153] = 10.1. It means that an investor expects to buy 10 years of earnings at the current price. Stock Value = [Common Stock Value + Retained Earnings Per Share + Present Value of future EPS] = [15.44 + {25.52} + 25.13] = 315.1 Unique Offerings and Company Trends Nordstrom's integrated online and fullline stores provide customers with a seamless shopping experience. It fulfills instore purchases from the inventories of the stores that customers shop in, but ifinventory is unavailable, it ships products from its fulllment centers. Online orders can be picked from its fullline stores or shipped directly to customers at their preferred locations. With these capabilities, it continuously serves customers across various channels, improving its sales. It also has a Credit segment where customers can access a variety of payment methods and services, including its branded private cards. Visa credit cards. and a debit card that allow customers to purchase Nordstrom products (Nordstrom. 2022). Nevertheless. the cards include a loyalty program that increases customer spending through high visits to its instore and online stores. In addition to driving sales using the loyalty program. the program enables it to earn credit card revenue. Furthermore. to increase IJ. its success and reduce risk factors, it invests in enhancing its technology to improve customers' shopping experience in its in-store and online stores, including social media channels and mobile apps. This approach enables it to have a highly competitive ecommerce platform. Comganv B: Macys Background lntcrmaticn Macys Inc. is a modern department store headquartered in New York City, operating one of the regions largest ecommerce. Its main purpose is to "Create a brighter future with bold representation so we can realize the full potential of every one ofus" (Macy's, 2023 JI. It goes by its nameplates, Bluernercury. Bloomingdale's, and Macys. It offers kids, men's. and women's apparel. including women's fragrances, cosmetics, shoes. and accessories. It operates in the highly competitive retail industry. which has many companies that adopt various retail formats like manufacturer's outlets. online retailers, off-price discount stores. websites, general merchandise stores, specialty stores. and departmental stores. Macys achieves its business goals by its commitment to be a preferred brand in the region through its commitment and passion towards its "colleagues." who are the employees. communities; and customers. In addition, the company's workplace and business practices are guided by the l1 company's social purpose known as "Mission E. Recent Financial Statements 6 2022 2021 2020 % to % to % to Amount Sales Amount Sales Amount (dollars in millions, except per share figures) Net sales $ 24,442 $ 24,460 $ 17,346 Increase (decrease) in comparable sales 0.3 % 43.0 % (27.9)% Credit card revenues, net 863 3.5 % 832 3.4 % 751 4.3 % Cost of sales (15,306) (62.6)% (14,956) (61.1)% (12,286) (70.8)% Selling, general and administrative expenses (8,317) (34.0)% (8,047) (32.9)% (6,767) (39.0)% Gains on sale of real estate 89 0.4 % 91 0.4% 60 0.2% Impairment, restructuring and other costs (41) (0.2)% (30) (0.1]% (3,579) (20.6)% Operating income (loss) 1,730 7.1% 2,350 9.6% $ (4,475) (25.8)% Diluted carnings (loss) per share 4.19 4.55 $ (12.68) Supplemental Financial Measure Gross margin 5 9.136 37.4 % $ 9,504 38.9 % $ 5,060 29.2% Digital sales as a percent of net sales 33 % 35 % 44 % Supplemental Non-GAAP Financial Measures Increase (decrease) in comparable sales on an owned plus licensed basis 0.6% 42.9 % (27.9)% Adjusted diluted earnings (loss) per share S 4.48 5.31 $ (2.21) EBITDA 2,568 S 3,194 $ (3,546) Adjusted EBITDA $ 2.648 $ 3.320 $ 117 Figure 3. Three Years Financial Performance (Macys, 2022). (millions) January 28, 2023 January 29, 2023 ASSETS Current Assets: Cash and cash equivalents 862 1,712 Receivables 300 297 Merchandise inventories 4.267 4,383 Prepaid expenses and other current assets 424 366 Total Current Assets 5,853 6,758 Property and Equipment - net 5,913 5,665 Right of Use Assets 2.683 2,808 Goodwill 828 SC8 Other Intangible Assets - net 432 435 Other Assets 1,157 1,096 Total Assets 16,866 17,590 = LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Merchandise accounts payable 2,053 2,222 Accounts payable a crued liabilities 2,750 1,086 Income taxes 58 108 Total Current Liabilities 4,861 5,416 Long-Term Debt 2.996 3.295 Long-Term Lease Liabilities 2,963 3,098 Deferred Income Taxes 947 983 Other Liabilities 1.017 1,177 Shareholders' Equity: Common stock (271.3 and 292.4 shares outstanding) Additional paid-in capital 467 $17 Accumulated equity 6.268 5,268 Treasury stock (2,038) (1,545) Accumulated other comprehensive loss (618) (622) Total Shareholders' Equity 4,082 3,621 Total Liabilities and Shareholders' Equity 16,866 5 17,590 Figure _ Consolidated Balance Sheet (Macys, 2022)MACY'S, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (millions 2022 2021 2020 Cash flows from operating activities: Net income (loss) 1,177 $ 1,430 5 (3,944) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Impairment, restructuring and other costs 41 30 3.579 Settlement charges 39 06 Depreciation and amortization 857 874 959 Benefit plans 17 34 47 Stock-based compensation expense 31 Gains on sale of real estate (89) (91) (60) Deferred income taxes (38) 19 (327) Amortization of financing costs and premium on acquired debt 11 70 18 Changes in assets and liabilities (Increase) decrease in receivables (3) (21) 132 (Increase) decrease in merchandise inventories 116 (610) 1,406 (Increase) decrease in prepaid expens s and other current assets (66) (39) Increase (decrease) in merchandise accounts payable (129) 218 237 Increase (decrease) in accounts payable and accrued liabilities (174) 245 (759) Increase (decrease) in current income taxes (75 ) 588 (617) Change in other assets and liabilities (123) (186) (188) Net cash provided by operating activities 1,615 2,712 649 Figure _ Cash Flows (Macys, 2022). Financial Analysis Earnings Per Share (EPS) EPS = [Net income/total outstanding shares] = [$1 177/280.9] = $4.19. It shows that the company earns $4.19 in profits for every outstanding share of stock. Operating margin Operating margin = [operating profit/total revenues] = [1177/24442] = $0.048. It means that each dollar of sales generates an income of $0.048. Debt-to-capital ratio = [total debts/total capital] = [$2996/$16866] = 0.18. Return on Equity (ROE) ROE = [Net income/shareholders equity] = [$1177/4082] = 0.28x100 = 28% Price Earnings P/E ratio8 P/E = [stock price/EPS] = [$16.34/$4.19] = 4. It means that an investor expects to buy 4 years of earnings at the current price. Stock Value = [Common Stock Value + Retained Earnings Per Share + Present Value of future EPS] = [14.79+4.55+(-4.44)] = $14.9. Unique Offerings and Company Trends One of the company's unique business approaches entails gathering feedback from its "colleagues throughout the lifecycle." Thus, it provides various avenues for the "colleagues" to share their opinions and ask questions. The outcomes are shared throughout the company to provide the managers with insights that can be used to improve business operations. It is also committed to diversity, equity, and inclusion, as guided by its values. It enables it to work with a diverse workforce representing the communities and customers it serves in the region. It has a MOSAIC program to improve its leadership's diversity. It entails a professional development program that engages the organization's leadership in diversity training. The program also equips the leaders with appropriate leadership skills and knowledge in diversity, equity, and inclusion which drives the organization's success and promotes an ethically diverse representation of top leadership. By the end of 2022, the company had re-evaluated its approach to merchandising by "working closely with brand partners, increasing open-to-buy reserves, aligning how it incentivizes merchants, adopting an upfront cost negation model, and reducing markdown allowances" (Macys, 2022). In the same year, it modernized its supply chain by developing forecasting models for predicting lead times connected to customer demand, embedding technology, machine learning, and analytics into its business operations, and integrating its siloed past supply chain functions into one central fulfillment model. These strategies helped the company to employ data and analytics across its enterprise. It also offered the capabilityto manage its inventory contributing to inventory productivity and increasing its sales. net income, and profitability. In addition. the company's main primary growth vectors include its offmall expansion. private brand reimagination. the digital marketplace. luxuryr brands. and communication and personalized offers. Another unique practice that makes Macys attractive and competitive is its commitment to sustainability by embedding it in the business. The main guiding principles to its commitment to sustainability are goveniance. products. human rights. and the environment. In govemance+ the company's management enables stakeholder engagemenL in products it expands its sustainable products after authentication by other departments. Conclusion Comparing the two companies. Maeys has a higher EPS than Nordstrom. lt means that Egrowth and stock price are increasing. Its net income and net sales are also higher than Nordstrom's. Moreoveri comparing the two company's debt-to-capital ratios. M debt-to-capital ratio is lower than Nordstrom's. indicating that Macys is more stable and can raise additional capital in future to grow. Nordstrom's higher ratio indicates it is less likely to fulll its debt obligations through its cash flow. [n addition. it implies that it has more debts compared to Macys. Even though Nordstrom's ROE and stock value is higher than Macys ROE and stock value, an investment in Macys would be more profitable than investing in Nordstrorri because Nordstrorn is more likely to spend a lot of nancing its debts and its sales and total revenues are also lower than Macys. Nonetheless. Macys unique practices, like sustainability. make it attractive for investments: as many companies are embracing corporate social responsibility. Unlike Nordstrom. E supply chain is highly modernized. limiting losses. waste. and inefficiency. Therefore, [ recommend that investors to invest in Macys for high financial