The following questions need to be answered in regards to JCPenney acquiring Kohls. Must use current references and format in answer.

Revenue

1.Summarize sales by customer for the current and past year.

2.Summarize sales by product for the current and past year.

3.Determine the seasonality of revenue, if applicable for the company.

Complexity

1.Evaluate the number and variability of revenue sources, if possible and practical.

2.Review the volatility of the effective tax rate.

3.If there is a tax deferral, investigate the differences between tax and book income.

Marketing

1.What types of advertising and promotion are used?

2.Does the company have a website? Who owns the site and how is it hosted?

3.Does the company use e-mail for marketing notifications to customers?

4.What are the proportions of sales by distribution channel?

5.How many customers can the company potentially market its products to? What would be the volume by customer?

6.What is the company's market share? What is the trend?

7.Are there new markets in which the products can be sold?

Other

1.If possible, discuss revenue recognition policies. (person 2)

2.Determine risk management strategies and insurance coverage.

3.Evaluate the company's benefit plan to determine its cost, as well as the amount of employee participation.

4.Look through the footnotes and obtain a list of significant accounting policies.

From the Due Diligent Checklist: Revenue 1. Summarize sales by customer for the current and past year. 2. Summarize sales by product for the current and past year. 3. Determine the seasonality of revenue, if applicable for the company. Complexity 1. Evaluate the number and variability of revenue sources, if possible and practical. 2. 3. Review the volatility of the effective tax rate. If there is a tax deferral, investigate the differences between tax and book income. Marketing 1. 2. What types of advertising and promotion are used? Does the company have a website? Who owns the site and how is it hosted? 3. Does the company use e-mail for marketing notifications to customers? 4. What are the proportions of sales by distribution channel? 5. How many customers can the company potentially market its products to? What would be the volume by customer? 6. What is the company's market share? What is the trend? 7. Are there new markets in which the products can be sold? Other 1. If possible, discuss revenue recognition policies. (person 2) 2. Determine risk management strategies and insurance coverage. 3. Evaluate the company's benefit plan to determine its cost, as well as the amount of employee participation. 4. Look through the footnotes and obtain a list of significant accounting policies. DISCOUNTED CASH FLOW ANALYSIS FCF Calculations 2011 2012 2013 2014 2015 2016 Net Income Plus: Interest After Tax Unlevered Net Income Plus: Change in deferred taxes NOPAT Plus: Depreciation Less: Change In Working Capital Less: Capital Expenditures Free Cash Flow Less payout ratios for dividends Terminal Value 2016 $ Growth Rate - - DISCOUNTED CASH FLOW ANALYSIS FCF Calculations 2011 2012 2013 2014 2015 2016 Net Income Plus: Interest After Tax Unlevered Net Income Plus: Change in deferred taxes NOPAT Plus: Depreciation Less: Change In Working Capital Less: Capital Expenditures Free Cash Flow Less payout ratios for dividends Terminal Value 2016 $ Growth Rate