Financial Analysis For Kohl's

5129 words - 21 pages

Financial Statements Analysis Project

By Mayra Mangual

Contents
Research Summary 3
Appendix B: Research Summary 3
About Kohl’s Corporation 5
Inventory cost-flow assumption 7
Depreciation method 7
Major Operating Segments 7
DuPont analysis of Competitors 8
Company News 9
Financial Statement Analysis 10
Balance Sheet Analysis 10
Income Statement 13
Statement of Cash flows 16
Asset Management 17
Ratio Analysis 20
Appendix 1: 24
Consolidated Statement of Financial Position 24
Consolidated Statement of Operations 256
Consolidated Statement of Cash Flows 267
Appendix 2 278
Excel Input and output data 28
Appendix 3 35
Dupont Analysis of Competitors ...view middle of the document...

12 in 2013 from 1.28 in 2012. Thus in this way the Company is having strong quality of income through its major operations. |
Does this company have a sustainable economic moat? (Yes / No) The Company has a sustainable economic moat due to the fact that it has a wide network of branches spread across all the states and thus it is a huge competitive advantage for the Company which indeed will help it to have a sustainable economic moat. |
Valuation … this company is a long-term (buy / review again at a lower price / bust). The intrinsic value of the Company is lower than the current market value therefore the investment is risky and thus at the moment the investment should not be made. Furthermore, if the market value comes down at the level of intrinsic value then looking at the good long term prospects of the Company investment should be done. |
Does this company pass your 10-Minute Test? (Pass / Fail). The Company pass the ten minute test due to the fact that the long term perspective are positive but the investment should be made only at the intrinsic value because the current market value is higher than the intrinsic value and thus could pose risk to the investor in short term. |

4. DuPont Analysis of ROE
Ratio | ROS | x Asset Turnover | = ROA | x Financial Leverage | = ROE |
Type | Profitability | Asset Mgmt | | Solvency | |
Formula | NI / Rev | Rev / A | NI / A | A / SE | NI / SE |
Your company | 4.67% | 1.32 | 6.18 % | 2.41 | 14.87 % |
Your industry | 3.45% | 1.41 | 4.86% | 3.44 | 16.48% |
S&P 500 Avg | 10% | 1.00 | 10% | 2.50 | 25% |
What is the primary driver of ROA? (ROS / Asset Turnover)
The primary driver for return on assets is the usage of assets effectively in order to derive maximum benefit.
What is the primary driver of ROE? (ROA / Financial Leverage)
The primary driver for return on equity is the sales revenue of the Company.
5. SIGNIFICANT current events and other information of importance:
The Company has currently decided to work with Disney in order to market its Jumping bean brands which will be a good boost to the warning of the Company. Furthermore, this association will help the Company to increase the revenue and profitability in the long term. 
6. INVESTMENT DECISION
Your Company: (Invest / Not invest) Would Invest in the Company if the market value is equal to intrinsic value |
Why?1 – Network of shops is significantly strong and cover the whole United States2 – Pricing strategy is low and thus will attract the consumers 3 – Distribution and procurement is well organized thus it will give significant strength to the operations4 – Brand equity of the Company is significant and thus it will lead it towards good profitable operations5 – Brands launched by the Company. |

About Kohl’s Corporation
Kohl’s Corporation (the Company) started its operations in 1988 and since then it has expanded its operations significantly. It is currently operating...

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