Kohls 2013 Annual Report
Table of Contents
1. Introduction
2. Return on Investment ROI
a. Revenue
b. Net Income
c. Cost of Goods Sold
d. Expenses
e. Average Total Assets
i. Inventory Turnover
3. Cash Flow Analysis
a. Leverage
b. Stock Repurchase
4. Statement of Shareholder’s Equity
a. Debt to Equity
b. Current Ratio
c. Competitor Analysis
5. Income Projection
6. Summary
The decision to buy, sell or hold Kohl’s stock is a difficult one. Their 2012 financial statements reflect a descending trend in cash, which may be a positive indication of the company reinvesting funds back into the company and distributing dividends to shareholders. However, their financial statements also reflect an increase in total liabilities, which may be a negative indication of more leverage being used to finance the company. The more leverage the company has the greater the financial risk. In the final analysis, investors should buy Kohl’s stock. Kohl’s stock is affordably priced and the company has extraordinary growth potential. Outlined below are the factors that were taken into consideration before deciding if this was a financially healthy company to invest in.
DuPont return on investment (ROI) can simply be defined as: “A primary measure of a firm’s profitability.” (Berman, 2006) DuPont ROI is an “expansion of the basic ROI calculation that factors in profitability from sales and the utilization of assets to generate revenue.” (Marshall,2011) Calculations of Kohl’s ROI revealed that the firm gained an 8% profit for every one dollar invested and slightly reduced to 7% in 2012. This illustration of ROI is demonstrated in exhibit 1.1. The gradual decrease in the DuPont ROI is primarily driven by the shifts in net income and average total assets.Net income for Kohl’s slightly dwindled from 2011-2012. This calculation of net income is illustrated in exhibit 4.1. As the cost of goods sold and expenses increased net income reduced. The contributing factors directly related to these
1. Introduction
2. Return on Investment ROI
a. Revenue
b. Net Income
c. Cost of Goods Sold
d. Expenses
e. Average Total Assets
i. Inventory Turnover
3. Cash Flow Analysis
a. Leverage
b. Stock Repurchase
4. Statement of Shareholder’s Equity
a. Debt to Equity
b. Current Ratio
c. Competitor Analysis
5. Income Projection
6. Summary
The decision to buy, sell or hold Kohl’s stock is a difficult one. Their 2012 financial statements reflect a descending trend in cash, which may be a positive indication of the company reinvesting funds back into the company and distributing dividends to shareholders. However, their financial statements also reflect an increase in total liabilities, which may be a negative indication of more leverage being used to finance the company. The more leverage the company has the greater the financial risk. In the final analysis, investors should buy Kohl’s stock. Kohl’s stock is affordably priced and the company has extraordinary growth potential. Outlined below are the factors that were taken into consideration before deciding if this was a financially healthy company to invest in.
DuPont return on investment (ROI) can simply be defined as: “A primary measure of a firm’s profitability.” (Berman, 2006) DuPont ROI is an “expansion of the basic ROI calculation that factors in profitability from sales and the utilization of assets to generate revenue.” (Marshall,2011) Calculations of Kohl’s ROI revealed that the firm gained an 8% profit for every one dollar invested and slightly reduced to 7% in 2012. This illustration of ROI is demonstrated in exhibit 1.1. The gradual decrease in the DuPont ROI is primarily driven by the shifts in net income and average total assets.Net income for Kohl’s slightly dwindled from 2011-2012. This calculation of net income is illustrated in exhibit 4.1. As the cost of goods sold and expenses increased net income reduced. The contributing factors directly related to these
References: Barr, A. (2012, November 25th). Huffington Post. Black Friday Online Sales Exceed $1 Billion For The First Time, p. 2. Berman, K. (2006). Financial Intelligence. Boston: Harvard Business School Publishing. Laya, P. (2012, September 21st). Bloomberg. Retrieved October 1, 2013, from http://www.bloomberg.com/news/2012-09-21/cotton-prices-may-fall-11-by-november-on-surplus-plexus-says.html Marshall, M. (2011). Acoounting:What The Numbers Mean 9th ed. New York: Mcgraw Hill . Rupp, L. (2013, October 2). Bloomberg. U.S Holiday Retail Sales May Climb by 3.9% NRF Says, p. 2. U.S. Energy Informantion Administration. (2012). Retrieved 1October 1, 2013, from http://www.eia.gov/