In writing the memo, use section headers to clearly delineate each of the following five sections: 1. Analyze three items on the income statement (or income statement-based financial ratios; see the list on page 4) for your base company for the last three years and discuss whether the company's performance related to these items appear to be improving, deteriorating, or remaining stable. Justify your answer.

While you are not limited to the financial statement ratios we covered in class for your I/S and B/S analysis, if you choose to use them, please use the following classifications. Income Statement-based ratios: - ROE - ROA - PM, GPM - Interest coverage - Change in revenue

Link to the data for 10-K

MACY'S, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (millions, except per share data) 2021 2020 Net sales $ 24,460 $ 17,346 $ Credit card revenues, net 832 751 Cost of sales (14,956) (12,286) Selling, general and administrative expenses (8,047) (6,767) Gains on sale of real estate 91 60 Restructuring, impairment, store closing and other costs (30) (3,579) Operating income (loss) 2,350 (4,475) Benet plan income, net 66 54 Settlement charges (96) (84) Interest expense (256) (284) Financing costs (5) Losses on early retirement of debt (199) Interest income 1 4 Income (loss) before income taxes 1,866 (4,790) Federal, state and local income tax benet (expense) (436) 846 Net income (loss) $ 1,430 $ (3,944) $ Basic earnings (loss) per share $ 4.66 $ (12.68) $ Diluted earnings (loss) per share $ 4.55 $ (12.68) $ The accompanying notes are an integral part of these Consolidated Financial Statements. 2019 24,560 771 (15,171) (8,998) 162 (354) 970 31 (58) (205) (30) 20 728 (164) 564 1.82 1.81 MACY'S, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (millions) 2021 2020 2019 Net income (loss) 1,430 $ (3,944) $ 564 Other comprehensive income (loss), net of taxes: Net actuarial gain (loss) and prior service credit on post employment and postretirement benefit plans, net of tax effect of $23 million, $37 million and $36 million 69 107 (107) Reclassifications to net income (loss): Net actuarial loss and prior service cost on post employment and postretirement benefit plans, net of tax effect of $9 million, $12 million and $8 million 25 35 23 Settlement charges, net of tax effect of $24 million, $22 million and $14 million 72 62 44 Total other comprehensive income (loss) 166 204 (40) Comprehensive income (loss) $ 1,596 $ (3, 740) $ 524 The accompanying notes are an integral part of these Consolidated Financial Statements. F-6