Financial Statement Analysis-Macy's

2571 words 11 pages
Macy’s, Inc | Macy’s, Inc. Financial Statement Analysis 2011 | Alisa Hitchman |

11/6/2012 |

RMA INDUSTRY NUMBERS FOR RETAIL DEPARTMENT STORES
Liquidity Analysis BEST AVERAGE WORST Current Ratio 4.6 2.6 1.5 Average Collection Period 0 1 7 Day’s Inventory on Hand 36 107 136
Asset Analysis Fixed Asset Turnover 88.4 13.6 3.5 Total Asset Turnover 3.7 2.3 1.3
Debt Analysis Debt/Worth Ratio 0.4 1.4 3.9 TIE Ratio 8.3 3.1 1.3 Day’s Payable 8 31 42
Profitability Analysis PRE TAX Profit Margin NA 10.7 NA PRE TAX ROE 38.7 14.3 5.9 PRE TAX ROA 18.1 4.6 3.0

Introduction
Macy’s, Inc. is a chain of department stores in the U.S. that has 800
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Asset Analysis
Fixed Asset Turnover RMA
’11 ’10 % Change Best Average Worst
3.1 2.8 10.7 % 88.4 13.6 3.5
Between 2010 and 2011, the company’s fixed asset turnover of 2.8 increased 10.7% to 3.1. Such an increase was due to a 5.6% increase in sales despite a 4.5% decrease in fixed assets. With a turnover of 3.1, Macy’s is 77.2% worse than the RMA average of 13.6 and 11.4% lower than the industry worst of 3.5. This turnover is below the industry worst because their common size of net fixed assets is 38.1% and is 54.3% above the RMA common size which is 24.7%.

Total Asset Turnover RMA
’11 ’10 % Change Best Average Worst
1.2 1.2 0.0 % 3.7 2.3 1.3
Their total asset turnover had no change, remaining at 1.2. We can contribute this to a 7.1% increase in total assets and a 5.6% increase in sales. With a 1.2 total asset turnover, Macy’s is 47.8% below the industry average of 2.3 and 7.7% below the industry worst. The reasoning behind the fact that both the fixed asset turnover and the total asset turnover are so close to the industry’s worst is that Macy’s fixed assets are decreasing, but total assets and sales are increasing. More sales are generated from the fixed assets than the total assets and Macy’s isn’t able to produce nearly as much sales off these as other companies have been.
Debt Analysis
Debt/Worth Ratio RMA
’11 ’10 %

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