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questions for Kroger and Whole Foods: a. Compute the following ratios for the companies 2014 fiscal years: 1. Current ratio. 2. Average days to sell
| questions for Kroger and Whole Foods: | ||||||||||
| a. Compute the following ratios for the companies 2014 fiscal years: | ||||||||||
| 1. Current ratio. | ||||||||||
| 2. Average days to sell inventory. (Use average inventory.) | ||||||||||
| 3. Debt to assets ratio. | ||||||||||
| 4. Return on investment. (Use average assets and use earnings from continuing operations rather than net earnings.) | ||||||||||
| 5. Gross margin percentage. | ||||||||||
| 6. Asset turnover. (Use average assets.) | ||||||||||
| 7. Net margin. (Use earnings from continuing operations rather than net earnings.) | ||||||||||
| 8. Plant assets to long-term debt ratio. | ||||||||||
| b. Which company appears to be more profitable? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion. | ||||||||||
| c. Which company appears to have the higher level of financial risk? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion. | ||||||||||
| d. Which company appears to be charging higher prices for its goods? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion. | ||||||||||
| e. Which company appears to be the more efficient at using its assets? Explain your answer and identify which ratio(s) from Requirement a you used to reach your conclusion. | ||||||||||
| Analyzing Kroger and Whole Foods | ||||||||||
| The following information relates to The Kroger Company for its 2015 and 2014 fisccal years, and Whole Foods Market Inc. for its 2014 and 213 fiscal years. | ||||||||||
| The Kroger Company | ||||||||||
| Selected Financial Information | ||||||||||
| (amounts in millions, except per share amount) | ||||||||||
| 31-Jan-15 | 1-Feb-14 | |||||||||
| Total current assets | $8,911.00 | $8,830.00 | ||||||||
| Merchandise inventory | $8,178.00 | $7,951.00 | ||||||||
| Property and equipment, net of depreciation | $17,912.00 | $16,893.00 | ||||||||
| Total assets | $30,556.00 | $2,981.00 | ||||||||
| Total current liabilities | $11,403.00 | $10,705.00 | ||||||||
| Total long-term liabilities | $13,711.00 | $13,181.00 | ||||||||
| Total liabilities | $25,114.00 | $23,886.00 | ||||||||
| Total shareholders equity | $5,442.00 | $5,395.00 | ||||||||
| Revenues | $108,465.00 | $98,375.00 | ||||||||
| COGS | $85,512.00 | $78,138.00 | ||||||||
| Gross profit | $22,953.00 | $20,237.00 | ||||||||
| Operating income | $3,137.00 | $2,725.00 | ||||||||
| Earnings from continuing operations, before income tax expense | $2,649.00 | $2,282.00 | ||||||||
| Income Tax expense | $902.00 | $751.00 | ||||||||
| Net earnings | $1,747.00 | $1,531.00 | ||||||||
| Basic earnings per share | $1.75 | $1.47 | ||||||||
| Whole Foods Market, Inc | ||||||||||
| Selected Financial Information | ||||||||||
| (amounts in millions, except per share amount) | ||||||||||
| 28-Sep-14 | 29-Sep-13 | |||||||||
| Total current assets | $1,756.00 | $1,980.00 | ||||||||
| Merchandise inventory | $441.00 | $414.00 | ||||||||
| Property and equipment, net of depreciation | $923.00 | $2,428.00 | ||||||||
| Total assets | $5,744.00 | $5,538.00 | ||||||||
| Total current liabilities | $1,257.00 | $1,088.00 | ||||||||
| Total long-term liabilities | $674.00 | $572.00 | ||||||||
| Total liabilities | $1,931.00 | $1,660.00 | ||||||||
| Total shareholders equity | $3,813.00 | $3,878.00 | ||||||||
| Revenues | $14,194.00 | $12,917.00 | ||||||||
| COGS | $9,150.00 | $8,288.00 | ||||||||
| Gross profit | $5,044.00 | $4,629.00 | ||||||||
| Operating income | $934.00 | $883.00 | ||||||||
| Earnings from continuing operations, before income tax expense | $946.00 | $894.00 | ||||||||
| Income Tax expense | $367.00 | $343.00 | ||||||||
| Net earnings | $579.00 | $551.00 | ||||||||
| Basic earnings per share | $1.57 | $1.48 | ||||||||
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
