Macy's Inventory Management

Macy’s enjoys economies of scale giving them purchasing power with their suppliers and the ability to reduce operating costs by spreading fixed costs over a larger base; due to this process Macy’s buys in bulk which locks in larger discounts they can pass on to the consumer creating a win/win situation. This purchasing power allows them to control a larger section of the market and protects them from smaller retailers purchasing the same product. Macy’s sales equal $27.82B with a gross profit of $11.21B. Most analysts recommended buying Macy’s stock last month with 6 analysts predicting a strong performance. Dillard’s revenue is $6.69B and J.C. Penny Corporation revenue is reported at $12.98B for the same time period. (Macy’s (M), 2014). Macy’s, Inc. is currently trading at $57.11 (Macy’s (M), 2014) with a 52-week high of

Due to the economy downturn period, Macy’s and many other retailers were suffering. Fortunately, Macy’s has chosen the beneficial marketing strategy to fit the objective of business. This paper will analyze the company’s situation from its financial aspect, industry aspect, the competitive part and Macy’s marketing strategies to conclude that Macy’s could have stable profit in the next three to five years.

* Return on Sales (ROS) – ROS is the percentage of each dollar of sales that is left as a profit. For example if a company has $100 in revenue and $20 in profit, at the end of the period they have a ROS of 20%. ROS is best used when compared to other companies within the same industry. This is because different industries can have different levels of ROS depending on the competitiveness level. Competiveness can drive prices down overall in the industry, which will drive down ROS for all companies. A high ROS can indicate premium pricing in the industry or great efficiency where as a low ROS can be an indicator of financial trouble such as a company slashing prices just to garner

The Return on Assets ratio is a basic measure of the efficiency with which TCI allocates and manages its resources (assets) to generate earnings. With a 20% projected increase in sales, for 1996, we calculated TCI’s ROA to be 12.95%, and 12.11% for 1997. Although this isn’t an extremely high ROA, TCI will be allocating its resources very wisely with the expansion of its central warehouse. If MidBank lends them the cash they need to complete this project, their central warehouse will be able to hold more tires for their increasing sales, which will then convert into profit. A true test of TCI’s ROA will be after 1998, when the warehouse is complete, so you can see just how well they can convert an investment into profit.

Within the retail environment, scheduling and a rapid response to changing consumer sentiments are critical. As such, the organizations systems must reflect this change in consumer dynamics to maximize sales and profitability. A systems approach works well in accomplishing this task. In many instances, consumer demand, consumer sentiments and macroeconomic factors all influence one another. In the context of Macys, macroeconomic factors determine consumer demand and confidence. Attempting to forecast this demand, the organization must then adjust scheduling and inventory levels accordingly. The input elements in this system would therefore be aligned with macroeconomic considerations. Aspects such as income growth, discretionary income, consumer confidence, tax policy, and commodity prices all affect the system. For instance high gas prices, can potentially cause less discretionary income for individuals. This lack of discretionary income ultimately hinders the amount of spending on discretionary items. This lack of spending impacts Macys on the output side as the company must now lower inventory levels or markdown merchandise to compensate consumers. Therefore inventory management is critical system in which Macys can use to add value to the consumer, the company, and its

The financial data will support the strategy as the ratios and numbers show that Macy’s has resources and capital available for the implementation. Evaluation of external and internal factors positively presenting an opportunity for Macy’s to use designed strategy to and keep competitiveness in the industry. Summarizing Macy’s is a well-established organization with over 150 successful years in business that still has an ability to compete with leaders in the industry if the right

Our objective is to estimate the Free Cash Flow (FCF) value of Macy’s Inc. as of July 24, 2011 (date of valuation). Macy’s Inc. is a C-Corporation organized under the laws of Delaware. It is primarily engaged in the business of premier retail fashion. The standard of value was Free Cash Flow Value, which measures the company’s ability to generate

Macy's Inc. is one of the nation's largest and well known department store chains. Started over 150 years ago, Macy's has continually generated excellent returns for its shareholders and employees. Currently, in the midst of a global recession, Macy's has generated huge profits with same store sales increasing 5.3% year to date. In 2012 same store sales increased 4.6% in the month of February alone (Macy's Inc., 2012). In fact, throughout the duration of 2012, Macy's is projecting even larger profits for its underlying business operations. Even though Macy's has experienced success with both its assortments and brand, its competitors haven't faired so well. Sears, due in part to part to a lackluster holiday season, has been forced to close nearly 120 locations to generate excess liquidity in an effort to shore up its balance sheet (Isidore, 2011).Other competitors who cater specifically to the middle class consumer have also lost significant amounts of market share as consumers trade down due to the economy. This performance is primarily due to the core functions and operations of the business. Planning, organizing, leading, and controlling. Macy's excels at these forms of management, which has allowed the company to perform at a higher level relative to its peers in the industry.

Macy’s is one of the largest department stores operating in the United States. Macy’s has successfully created a brand image. As a result of having exclusive assortments and lines for many brands such as Ralph Lauren, as well as developed private labels. However, Macy’s business functions are only in the United State. So, the geographic presence limited to the Untied State is one the biggest weaknesses for Macy’s.

The Earnings Per share in 2012 and 2013 were $2.90. This is an indicator that the company is still profitable since the ratio is a constant. The price per earnings in 2012 was 12.5 and 17.7 in 2013. A decrease in the price per share may indicate a vote of no confidence to investors. However, this can be attributed to the industry sector as well the stock.

In this paper I will discuss Macy’s Incorporated by analyzing their business level strategies to determine which I think is the most important to their long term success and if I think it is a good choice. I will analyze their corporate level strategies to determine which I think is the most important and whether or not I believe it is a good choice. I will analyze the competitive environment to determine the corporations’ most significant competitor and compare the two companies’ strategies at each level and evaluate which company I think is most likely to succeed in the long term. Once the

ROA (short for return on assets) is a measure of a company’s profitability relative to total assets invested in the business by the owners.

The valuation ratios are used to determine how well a company is doing. In 2013, Ford investors were willing to pay 8.5 times of Ford’s earnings to purchase a share. There was a large jump in in the price earnings ratio for 2014 to 20.12. Ford’s stock price in 2014 had gone up slightly over 2013, but there was a decrease in EPS due to lower net income and an increase in the number

If we take a look at the company’s compounded annual growth rate in EPS we can see that Georgia Atlantic’s growth rate is really low compared to the industry average. Furthermore we can see from the first table that Georgia Atlantic’s P/E ratio is also lower in all the years as compared to the industry and the M/B ratio is also relatively low compared to the industry. Due to the fact that Georgia Atlantic is operating in a relatively mature market, there is a very low possibility for growth, that’s why we consider Georgia Atlantic as a low growth company. For low growth companies it is normal to have a low P/E ratio and a low B/M ratio because most of the company’s value comes from their current operations and assets. Because

Firms and Companies include ‘Ratios’ in their external report to which it can be referred as ‘highlights’. Only with the help of ratios the financial statements are meaningful. It is therefore, not surprising that ratio analysis feature are prominently in the literature on financial management. According to Mcleary (1992) ratio means “an expression of a relationship between any two figures or groups of figures in the financial statements of an undertaking”.