Equity, Cash Flow, and Notes Analysis Paper
ACC/529
Accounting for Managerial Decision Making
Cynthia Law
Scott Law
Sunny Lee
Samuel Ogunwobi
Clara Reid
Professor James Neuner
January 19, 2004
Table of Contents
Table of Contents 2
Introduction 3
Consolidated Statements of Shareholders ' Equity 3
Consolidated Statements of Cash Flows 4
Goals of the Organization 5
Important notes to the financial statements 6
Management 's Discussion and Analysis of Operations 9
Conclusion 10
Table 1 11
Table 2 12 Table 3
13
References 14 Introduction
Kmart remains one of the largest retail stores in America that must be recognized with strong financial statement and balance sheet.
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In Fiscal Year 2002, this was listed as negative cash flows of $168 million. The periods ending on April 30, 2003 and January 28, 2004 saw positive inventory amounts of $480 million and $1193 million, respectively. Although this is merchandise that remains on the shelf, this accounted for a significant amount of the cash flows from operative activities. Two other positive cash flow items were proceeds from property and equipment sales and proceeds from the issuance of stock. These two items accounted for $322 million in positive cash flow and greatly assisted the entity in establishing itself as a solvent organization.
Goals of the Organization
In the letter to the shareholders, Kmart Chairman Edward Lampert and President and CEO of Kmart Julian Day established other goals of the organization: "to focus our initiatives, merchandise assortment and associate goals on the four key areas of stores, markets, customers and profitability" (www.kmart.com). After Mr. Lambert took control after Chapter 11 proceedings, Kmart slashed inventory, squelched capital spending, reorganized the overall organization, and sold Kmart 's best locations for the cash to maximize profitability (http://epnet.com). Stigmas associated with Chapter 11 can be very difficult for a company to overcome. Investors have doubts about the ability of the organization to turn around bad fortunes, customers wonder if the service issues that drove them away
This chain is one of the 20 largest retail stores in the United States. Kohl’s is also listed in Fortune 500 in 2012. This retail store has more than 1100 locations around the globe. It also has a strong reputation and distribution. Also, their revenue performance and financial stability is high. Kohl’s also offers most of the essential products like clothing, furniture and etc.
Kroger’s business principles of service, selection and value were established from the very beginning of for the company (Kroger, 2015). Kroger CEO, Rodney McMullen started as a part-time store clerk and rose through the ranks to become CEO in January 2014 (SEC, 2014). Rodney McMullen tailored Kroger’s mission to “I, you, we make a difference” in Kroger’s sustainability report (Kroger, 2014). Kroger is classified as a retail-grocery store Global
The cash flow statement shows the amount of cash within a company. Items that affect the cash balance are listed on the statement. The first section of the cash flow statement is operating activities, which shows the cash flowing in and out of the company in relation to its business operation. The operating activities section also includes net income and the change in dollars of certain accounts listed on the balance sheet. The next section, investing activities, shows cash the company received and spent on a company's capital investments. The financing activities section shows the inflows and outflows of cash related to the company’s issued financial securities, which is also listed on the balance sheet and statement of shareholders' equity.
By 2011, Kohl’s corporation reported 1097 stores and a net income of 1.1 million dollars. (12)
Kmart is a huge vintage company that had peeked at one time and now is
The following pages focus on providing a strategic analysis of Sears Holding Corporation. The introduction reveals the issues that the paper addresses. The Company Presentation section reveals important facts in Sears' evolution. The Strategy Debates Section discusses theoretical issues applied to the situation of Sears. This is followed by the Strategic Decisions section that provides a series of recommendations that can help Sears improve its situation. The Implementation Challenges section provides important issues that can be considered challenges of strategic implementation.
There were also proprietary brands that were held by both Kmart and Sears, and with the merger it would be easier to get those brands out to the target demographics. Making each
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Currently Kmart has been constantly losing to competitors such as Wal-Mart and Target. Target is seen as a higher class store compared to the other two, and Wal-Mart is seen as a good store with good prices. Kmart has had trouble finding it’s own identity. They try to market themselves as being a better bargain than Wal-Mart, but the store is viewed as being “cheap” from the customer’s point of view. Kmart tried to fix that, by bringing in the Martha Stewart line. They
This report is intended analyze and compare the operating profitability of Sears, Roebuck and Co. (SRC), and Wal-Mart Stores Inc. (WM) for the accounting periods of 1996 and 1997.
Net income totaled $97.8 million in 1984, an increase of 5% from 1983.when looking at the Consolidated Balance Sheet (Exhibit2), we found that the total assets grew 15% to $2.7 billion at the end of fiscal 1984 due to addition of real estate inventories as part of the acquisition of another company. The ratio of debt to total capitalization jumped to 43% at 1984 from 20% at previous year.
The Home Depot bought more than 18 stores and Sears bought 45 for about $524 million. In that same year, Kmart Holding Corporation completed transactions to become a part of Sears, Roebuck and Company now known as Sears Holdings Corporation. Sears Holdings is listed on the NASDAQ under the ticker symbol SHLD. As of 2004 Kmart had 1,422 discount stores, 58 Kmart Supercenters totaling 1,480 stores. 1,323 of those stores were leased and 157 are company owned. Following the takeover, about 400 of Kmart's nearly 1,500 stores will be converted to Sears's outlets over the next three years.
The inventory throughout the second quater each an every item is variable and it totals at about £4,009,800 and turns over every 3 months/90 days. Cash sales should amount to about £7,500,000 if the inventory of £4,009,800 valued at cost turns over once in 90 days and if the average mark-up is about £2004, 9000. This figure can be roughly checked by referring to the expenses on the income statement. A rough measure of the cash expenses can usually be obtained by using the operating expenses less any non-cash expenses such as depreciation. Overall this shows that it is very important for Doomy corporations to have cash budget planned for its business, because it can help them assess if they are over spending their money and if the money is going and where it is coming in.
The failure or bankruptcy of financially distressed firms results in significant direct and indirect costs to many stakeholders; including shareholders, managers, employees, lenders and clients. For instance Shareholders lost nearly $11 billion