The purpose of this assignment is to help students familiarize themselves with financial ratios. Although students need to be familiar with how the ratios are calculated, this is not the primary purpose of the assignment. Each student should be able to explain the significance of each ratio presented and how this information conveys economic and financial meaning to either an internal party (i.e. manager) or an external party (i.e. investor or regulator).

The company for analysis this year is Whole Foods Market (Stock Symbol: WFM). Normally, you would download the corporation's annual report to find their financial information. For your convenience, I have attached WFM's financials on the attached spreadsheet.

For the assignment, calculate the following ratios and answer the following questions:

1. Company Financial Ratios (For 2011, 2012, and 2013) (40% of total grade)

Profitability Ratios

Liquidity (Short-Term Solvency) Ratios

Debt Management (Long-Term Solvency) Ratios

Asset Management Ratios

Using a trend analysis, comment on the trends you see in WFM's ratios. Be sure to comment as to whether your findings indicate any particular strength or weakness in WFM's ability to fund its competitive manuervers.

2. Compare the most recent year (2013) of ratios of Whole Foods Market with the largest company within their respective industry, Kroger Foods, Inc. You can download Kroger's 2013 annual report by visiting http://ir.kroger.com/CorporateProfile and clicking on REPORTS & STATEMENTS. (20% of total grade)

3. Using 2013 information, identify five ratios that the student believes indicate financial strength within Whole Foods Market and provide an explanation of his/her position.

4. Using 2013 information, identify five ratios that the student believes indicate financial weakness within Whole Foods Market and provide an explanation of his/her position.

Whole Foods Market, Inc. (NMS: WFM)
Exchange rate used is that of the Year End reported date
As Reported Annual Balance Sheet
Report Date	09/29/2013		09/30/2012		09/25/2011		09/26/2010
Currency	USD		USD		USD		USD
Audit Status	Not Qualified		Not Qualified		Not Qualified		Not Qualified
Consolidated	Yes		Yes		Yes		Yes
Cash & cash equivalents	290000000		89016000		212004000		131996000
Short-term investments - available-for-sale securities	733000000		1131213000		442320000		329738000
Restricted cash	111000000		102873000		91956000		86802000
Accounts receivable	188000000		196503000		175310000		133346000
Merchandise inventories	414000000		374269000		336799000		323487000
Prepaid expenses & other current assets	93000000		76511000		73579000		54686000
Deferred income taxes	151000000		132246000		121176000		101464000
Total current assets	1980000000		2102631000		1453144000		1161519000
Land	77000000		76592000		48928000		48928000
Buildings & leasehold improvements	2427000000		2219763000		1958612000		1863259000
Capitalized real estate leases	33000000		24876000		24262000		24874000
Fixtures & equipment	1706000000		1674089000		1398778000		1240303000
Construction in progress & equipment not yet in service	269000000		53328000		188844000		120845000
Gross property & equipment	4512000000		4048648000		3619424000		3298209000
Less accumulated depreciation & amortization	2084000000		1855965000		1622212000		1412079000
Property & equipment, net of accumulated depreciation and amortization	2428000000		2192683000		1997212000		1886130000
Long-term investments - available-for-sale securities	302000000		221426000		52815000		96146000
Goodwill	679000000		662938000		662938000		665224000
Intangible assets, net of accumulated amortization	65000000		62399000		67234000		69064000
Deferred income taxes	72000000		42834000		50148000		99156000
Other assets	12000000		9305000		8584000		9301000
Total assets	5538000000		5294216000		4292075000		3986540000
Current installments of long-term debt & capital lease obligations	-		1012000		466000		410000
Current installments of capital lease obligations	1000000		-		-		-
Accounts payable	247000000		247089000		236913000		213212000
Accrued payroll, bonus & other benefits due team members	367000000		307164000		281587000		244427000
Dividends payable	37000000		25959000		17827000		-
Other current liabilities	436000000		395964000		342568000		289823000
Total current liabilities	1088000000		977188000		879361000		747872000
Obligations under capital lease agreements for equipment	-		-		17905000		18299000
Cash flow hedge instrument	-		-		-		399000
Term loan	-		-		-		490000000
Total long-term debt	-		-		-		508698000
Total long-term debt & capital lease obligations	-		-		17905000		-
Less: current installments	-		-		466000		410000
Long-term debt & capital lease obligations, less current installments	26000000		23110000		17439000		508288000
Deferred lease liabilities	500000000		440822000		353776000		294291000
Other long-term liabilities	46000000		50627000		50194000		62831000
Total liabilities	1660000000		1491747000		1300770000		1613282000
Common stock	2765000000		2592369000		2120972000		1773897000
Common stock in treasury, at cost	153000000		28599000		-		-
Accumulated other comprehensive income (loss)	1000000		5266000		-164000		791000
Retained earnings (accumulated deficit)	1265000000		1233433000		870497000		598570000
Total shareholders' equity	3878000000		3802469000		2991305000		2373258000
As Reported Annual Income Statement
Report Date	09/29/2013		09/30/2012		09/25/2011		09/26/2010
Currency	USD		USD		USD		USD
Audit Status	Not Qualified		Not Qualified		Not Qualified		Not Qualified
Consolidated	Yes		Yes		Yes		Yes
Sales	12917000000		11698828000		10107787000		9005794000
Cost of goods sold & occupancy costs	8288000000		7543054000		6571238000		5870393000
Gross profit	4629000000		4155774000		3536549000		3135401000
Direct store expenses	3285000000		2983419000		2628811000		2375716000
General & administrative expenses	397000000		372065000		310920000		272449000
Pre-opening expenses	52000000		46899000		40852000		38044000
Relocation, store closure & lease termination cost	12000000		9885000		8346000		11217000
Operating income	883000000		743506000		547620000		437975000
Interest expense	-		354000		3882000		33048000
Investment & other income	11000000		8892000		7974000		6854000
Income before income taxes	894000000		752044000		551712000		411781000
Current federal income taxes	321000000		233598000		144840000		151349000
Current state income taxes	73000000		53725000		38807000		40730000
Current foreign income taxes	3000000		4541000		5092000		4172000
Total current income taxes	397000000		291864000		188739000		196251000
Deferred federal income taxes (benefit)	-44000000		863000		21130000		-23695000
Deferred state income taxes (benefit)	-10000000		-6225000		-334000		-6572000
Deferred foreign income taxes (benefit)	-		-31000		-435000		-36000
Total deferred income taxes (benefit)	-54000000		-5393000		20361000		-30303000
Provision for income taxes	343000000		286471000		209100000		165948000
Net income (loss)	551000000		465573000		342612000		245833000
Preferred stock dividends	-		-		-		5478000
Income available to common shareholders	551000000		465573000		342612000		240355000
Weighted average shares outstanding - basic	371200000		364802000		350442000		332488000
Weighted average shares outstanding - diluted	374500000		368888000		354558000		343420000
Year end shares outstanding	372400000		370874000		357772000		344066000
Net income (loss) per share - basic	1.48		1.275		0.98		0.725
Net income (loss) per share - diluted	1.47		1.26		0.965		0.715
Dividends declared per common share	1.4		0.28		0.2		-
Number of full time employees	56700		53100		48200		45300
Number of part time employees	18500		16400		13300		10700
Number of temporary employees	3200		3200		2700		2300
Total number of employees	78400		72700		64200		58300
Number of common stockholders	1384		1453		1512		1547
As Reported Annual Retained Earnings
Report Date	09/29/2013		09/30/2012		09/25/2011		09/26/2010
Currency	USD		USD		USD		USD
Audit Status	Not Qualified		Not Qualified		Not Qualified		Not Qualified
Consolidated	Yes		Yes		Yes		Yes
Previous retained earnings (accumulated deficit)	1233000000		870497000		598570000		358215000
Redeemable preferred stock dividends	-		-		-		5478000
Dividends	519000000		102637000		70447000		-
Other acquisitions	-		-		238000		-
Retained earnings (accumulated deficit)	1265000000		1233433000		870497000		598570000
As Reported Annual Cash Flow
Report Date	09/29/2013		09/30/2012		09/25/2011		09/26/2010
Currency	USD		USD		USD		USD
Audit Status	Not Qualified		Not Qualified		Not Qualified		Not Qualified
Consolidated	Yes		Yes		Yes		Yes
Net income (loss)	551000000		465573000		342612000		245833000
Depreciation & amortization	339000000		311550000		287109000		275589000
Loss (gain) on disposition of fixed assets	-		2223000		2228000		-170000
Impairment of long-lived assets	-		-		1317000		2237000
Share-based payment expense	57000000		42288000		27259000		22894000
LIFO expense (benefit)	2000000		100000		10250000		-7670000
Deferred income tax expense (benefit)	-51000000		-8039000		19540000		-33534000
Excess tax benefit related to exercise of team member stock options	-37000000		-50349000		-22741000		-2982000
Accretion of premium/discount on marketable securities	31000000		15710000		-		-
Deferred lease liabilities	51000000		77044000		53381000		39636000
Other net income adjustments	9000000		-1695000		5713000		-2371000
Accounts receivable	9000000		-29879000		-35422000		-28447000
Merchandise inventories	-42000000		-37075000		-23267000		-3048000
Prepaid expenses & other current assets	-17000000		-1779000		-18987000		-1640000
Accounts payable	-		9606000		23768000		23454000
Accrued payroll, bonus & other benefits due team member	60000000		25285000		37204000		36133000
Other current liabilities	51000000		94918000		53831000		20030000
Other long-term liabilities	-4000000		4234000		-8950000		-659000
Net cash flows from operating activities	1009000000		919715000		754845000		585285000
Development costs of new locations	-339000000		-261710000		-203457000		-171379000
Other property & equipment expenditures	-198000000		-194539000		-161507000		-85414000
Purchase of intangible assets	-		-		-		-
Purchase of available-for-sale securities	-1252000000		-3009503000		-1228920000		-1072243000
Sale of available-for-sale securities	-		-		1155795000		646594000
Sales & maturities of available-for-sale securities	1534000000		2138221000		-		-
Decrease (increase) in restricted cash	-8000000		-10917000		-5154000		-15779000
Acquisition of intangible assets	-		-		-5157000		-
Payment for purchase of acquired entities, net of cash acquired	-22000000		-		-1972000		-14470000
Other investing activities	-4000000		-2901000		-352000		-2715000
Net cash flows from investing activities	-289000000		-1341349000		-450724000		-715406000
Common stock dividends paid	-508000000		-94505000		-52620000		-
Preferred stock dividends paid	-		-		-		-8500000
Issuance of common stock	81000000		370226000		296719000		46962000
Purchase of treasury stock	-125000000		-28599000		-		-
Excess tax benefit related to exercise of team member stock options	37000000		50349000		22741000		2982000
Payments on long-term debt & capital lease obligations	-2000000		-305000		-490394000		-210350000
Net cash flows from financing activities	-517000000		297166000		-223554000		-168906000
Effect of exchange rate changes on cash & cash equivalents	-2000000		1480000		-559000		893000
Net change in cash & cash equivalents	201000000		-122988000		80008000		-298134000
Cash & cash equivalents at beginning of year	89000000		212004000		131996000		430130000
Cash & cash equivalents at end of year	290000000		89016000		212004000		131996000
Interest paid	2000000		2839000		15837000		39156000
Federal & state income taxes paid	378000000		201771000		192485000		193044000