Kohls Corporation and Dillards Inc Essay

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Kohl’s Corp. was founded in 1962. , and has grown into a company that had revenues of over $19 billion in 2015. Their headquarters are in Menomonee Falls, Wisconsin and is a family-oriented department store that sells national brands and private label merchandise of apparel, shoes, accessories, and housewares. Kohl’s competes with other department stores and discount stores for the middle-income shopping target market. The names brand products that Kohl’s offers are not typically available at the discount stores and Kohl’s focuses on controlling costs so they can offer lower prices than their department store competitors can. Kohl’s low cost and higher margins are the result of lean staffing, state of the art management information systems, and creating operating efficiencies by centralizing advertising, buying and distribution.

Kohl's inventory turnover is slightly better by .3 than JC Penney. This might indicate that Kohl's volume of sales in terms of inventory is better than JC Penney.

The first ratio that will be used is the profit margin ratio. This ratio is computed by dividing net income by sales. The second ratio to be used is known as the return on assets ratio (ROA). Return on Assets is computed by dividing net income by total assets. The final ratio that will used within this report is called the return on equity ratio (ROE). This ratio can be calculated by dividing a company’s net income by its total equity.

Kohl’s main website features several “exclusive and national brand apparel, footwear, accessories, soft home products and housewares targeted to middle-income customers” (10k, pg. F-7). To be more specific, Kohl’s offers many brands of clothing to women, men, and children. Some of the name brands they offer include Nike, Adidas, Levi’s, Chaps, Van Heusen and Wrangler. Kohl’s also offers many products from their “private label, Apt. 9, which was designed to compete with the likes of Banana Republic, Liz Claiborne, and Perry Ellis” (Hoover Report, pg. 9). The Apt. 9 catalogue features high quality suit jackets and pants, polos, and button-up shirts for men. For women, Apt. 9 offers a wide range of tops, dresses, sleepware,

Ratio analysis is a very useful tool when it comes to understanding the performance of the company. It highlights the strengths and the weaknesses of the company and pinpoints to the mangers and their subordinates as to which area of the company requires their attention be it prompt or gradual. The return on shareholder’s fund gives an estimate of the amount of profit available to be shared amongst the ordinary shareholders; where as the return on capital employed measures an organization 's profitability and the productivity with which its capital is utilized. Return on total assets is a profitability ratio that measures the net income created by total assets amid a period.

PS: There’s no amount in accounts receivable in Kohl’s Balance sheet, so we cannot analyze the receivables turnover between two companies.

The EPS ratio gives back the portion of company’s profit that is allocated to each outstanding share of common stock.

operating or free cash flow per-share ratios formulas are operating cash flow divided by average number of common stock outstanding; or free cash flow divided by average number of common stock outstanding.

This ratio defines the operating efficiency of the company. In this case it is similar to the ones showed in the industry.

Ratios describe the various relationships among accounts in the balance sheet and income statement. Financial ratios are important and helpful gauges of how an organization is functioning. An organization’s financial health, potential revenue, and even possible bankruptcy can be garnered from financial ratios. Information derived from financial statements is used to calculate most ratios and make projections. “Ratios help investors and lenders determine the risk associated with lending or investing funds in an organization” (GE Financial Healthcare Services, 2003, para 1). According to Finkler and Ward (2006), “the key to interpretation of ratios is benchmarks. Without a basis for comparison, it is

The calculation of ratios is the calculation technique for analyzing a company’s financial performance that divides or standardize one accounting measure by another economically relevant measure. Financial ratios can be used as a tool to demonstrate financial statement users for making valid comparisons of firm operating performance, over time for the same firm and between comparable companies. External investors are mostly interested in gaining insights about a firm’s profitability, asset management, liquidity, and solvency.

This ratio is expressed in percentage. If the ratio is high it shows that the company is utilizing its assets in better way to generate its income. If the ratio is less it shows that the company is in difficult position to meet its debt. Formula to find the return on assets ratio is: - return on assets = net profit / total assets. Whereas net profit means the amount arriving after deducting all the expenses which includes taxes also. In addition to this he also explains about the profit margin ratio (PMR). PMR is the ratio which expresses the relationship between profit and sales. Formula used to find the PMR is: - Profit margin ratio = net profit/net