SlideShare a Scribd company logo
Equity Analysis of
A quantitative look through Trend Analysis,
Comparative Analysis, and Financial Ratio Data
Presented by: James, Susha Zhang, Renjun Ying
Company Background
• Founded as a single store in San Francisco in 1969,
and is currently one of the top American companies
within the family clothing store industry. SIC 5651
• Prides itself on quality and customer focus with
product offerings in apparel, accessories, and
personal care products for men, women, and
children
• Not unique. Many competitors. Barriers to entry
relatively low; competitive scope crowded.
Company Background (cont’d)
• Gap differentiates through offering many brands at
different price points and quality
• Also targets various demographics
• Various brand name subsidiaries also include:
A Trend Analysis view
2009 2010 2011 2012 2013
Operating Assets
Operating Cash 585.33 147.56 95 107.69 86
Net Receivables 0 0 205 297 331
Inventories 1506 98 107.57 107.24 116.73
Prepaid Expenses 356 73 40.7 41 42.4
Other Current Assets 387 86.8 74.4 93 98.7
Net Plant, Property & Equipment 2933 89.6 87.4 86 89.3
intangibles 197 94 89.3 89.3 160.4
deferred charges 0 0 0 0 0
Other Assets 429 118.1 93 96.5 94
Total Operating Assets 6393.33 98 93 96 101
Operating Liabilities
Accounts Payable 975 105.3 107.6 109.3 117.3
Taxes Payable 57 72 87.7 8.8 189
Accrued Expenses 548 106 71.9 73.4 75.4
Other Current Liabilities 528 91.3 114 112.9 128.6
Total Operating Liabilities 2108 101 99 98 111
Net Operating Assets (NOA) 4285.33 96 90 95 96
REFORMULATED BALANCE STATEMENT TREND ANALYSIS
A Trend Analysis view (cont’d):
Reformulated Income Statement TREND ANALYSIS
2009 2010 2011 2012 2013
Sales 14526 97.7 101 99.8 107.7
Cost of Goods sold 8426 92.7 96.4 97 105.9
Gross profit 6100 104.6 107.1 96.2 110.3
Operating expenses
Selling, General & Administrative expenses 3899 100.3 100.6 98.4 108.5
Depreciation, depletion&Amortization 653 100.3 99.2 90.7 85.6
Operating income from sales(before tax) 1548 117.2 127.1 92.9 125.5
Taxes
Taxes as reported 617 115.7 126.1 86.9 117.7
Tax on financial items and other operating income 3.15 66.7 77.8 866.7 1033.3
Operating income from sales(after tax) 927.85 118.4 128 94.2 125.5
Extraordinary Items 0 0 0 0 0
Discontinued operations 0 0 0 0 0
Income before extraordinary items & discontinued operations927.85 118.4 128 94.2 125.5
Financing income/expense
Interset expense 9 66.7 77.8 866.7 1033.3
Tax effect(35%) 3.15 66.7 77.8 866.7 1033.3
Net interest income/expense 5.85 66.7 77.8 866.7 1033.3
Noncontrolling interest-inc Acc 0 0 0 0 0
Preferred dividends 0 0 0 0 0
Savings due to common stock equivalents 0 0 0 0 0
Net financing income 5.85 66.7 77.8 866.7 1033.3
Non-operating income/expense 45 15.5 13.3 20 26.7
Special Items 0 0 15 0 0
Operating income(after tax) 967 114 123 86.1 117.4
Comprehensive income 967 114 123 86.1 117.4
Trend Analysis
0
200
400
600
800
1000
1200
1400
January, 2009 January, 2010 January, 2011 January, 2012 January, 2013
Comprehensive Income
Comparative Analysis
12 % 13 % 12 % 13 %
Operating Assets
Operating Cash 630.33 10 503.33 8 692.33 10 428.33 6
Accounts Recievables 297 5 331 5 2033 29 2129 29
Inventories 1615 26 1758 27 1148 16 1360 19
Prepaid Expenses 146 2 151 2 0 0
Other Current Assets 360 6 382 6 302 4 307 4
Property Plant and Equipment 2523 41 2619 41 2469 35 2579 36
Intangibles 176 3 316 5 175 2 175 2
Deferred Taxes 0 0
Other Assets 414 7 403 6 287 4 254 4
6161.33 100 6463.33 100 7106.33 100 7232.33 100
Operating Liabilities
Accounts Payable 1066 52 1144 49 917 44 1011 46
Accrued Expenses 402 19 413 18 388 19 404 18
Taxes Payabable 5 0 108 5 0 0 0 0
Other Current Liabilities 596 29 679 29 764 37 804 36
2069 100 2344 101 2069 100 2219 100
THE GAP NORDSTROM
OP CASH
A/R
INVENTO
RY
OTH
CURRENT
ASSETS
PPE
INTANG OTH ASST
OP CASH
A/R
INVENTO
RY
OTH
CURRENT
ASSETS
PPE
Comparative Analysis (cont’d)
12 13 12 13
Sales 10,877.00 111.7 14497 107.9
Cost of Goods sold 6,221.00 112.6 8173.2 109.2
Gross profit 4,656.00 110.5 6323.8 106.4
Operating expenses
Selling, General & Administrative expenses 3,023.00 111.5 3836.6 110.3
Depreciation, depletion&Amortization 371 115.6 592.3 94.4
Operating income from sales(before tax) 1,262.00 106.6 1438.1 135.1
Taxes
Taxes as reported 436.00 103.2 536.2 135.4
Tax on financial items and other operating income 48.65 120.14 2.73 119.2
Operating income from sales(after tax) 777.35 107.62 874 133.2
Extraordinary Items 0 0 0 0
Discontinued operations 0 0 0 0
Income before extraordinary items & discontinued operations 777.35 107.62 874 133.2
Financing income/expense
Interest expense 139 120 78 119.2
Tax effect(35%) 48.7 120 27.3 119.2
Net interest income/expense 90.3 120.3 50.7 119.2
Noncontrolling interest-inc Acc 0 0 0
Preferred dividends 0 0 0
Savings due to common stock equivalents 0 0 0
Net financing income 81.35 124.83 50.7 119.2
Non-operating income/expense 90.3 120.3 9 133.3
Special Items -13 0 0 0
Operating income(after tax) 773.3 103.09 833 136.3
Comprehensive income 773.3 103.09 833 136.3
NORDSTROM GAP
Financial Ratios
Financial Ratios
Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
ROCE 0.22042398 0.225311797 0.291421569 0.302359347 0.392190739
RNOA 0.216517748 0.266292192 0.30781493 0.213741316 0.287291865
NBC -0.385069342 -0.00405584 -0.006531532 0.031181533 0.039540369
FLEV -0.023175291 -0.156272746 -0.054411765 0.485419238 0.423403594
Spread 0.168551594 0.262236352 0.301283398 0.182559783 0.247751497
ROCE (definition two) 0.22042398 0.225311797 0.291421569 0.302359347 0.392190739
Asset Turnover 3.389703943 3.440304168 3.800933126 3.555187387 3.799404272
RNOA 0.216517748 0.266292192 0.30781493 0.213741316 0.287291865
PM 0.06387512 0.077403677 0.080984043 0.060120971 0.075614977
Operating Liability Leverage 0.491910775 0.516396998 0.543027475 0.505579951 0.569024574
Return on Operating Assets 0.151722185 0.182419335 0.206526121 0.148682184 0.190355436
Implict Interest 42.16 42.62 41.9 41.38 46.88
RNOA(difinition two) 0.216517748 0.266292192 0.30781493 0.213741316 0.287291865
ROCE(definition three) 0.22042398 0.225311797 0.291421569 0.302359347 0.392190739
Graph for Ratios
0
0.1
0.2
0.3
0.4
0.5
Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
ROCE
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
RNOA
0.44
0.46
0.48
0.5
0.52
0.54
0.56
0.58
Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
OLLEV
-0.2
0
0.2
0.4
0.6
Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
FLEV
Turnover Ratios
Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Receivables Turnover - - 143.0634146 57.96414343 49.84394904
Inventory Turnover 5.46965271 5.241702984 5.248304811 5.368160742 5.289653128
Payables Turnover 8.50681474 7.81018981 7.829479769 8.210874704 8.073303167
Days Sales Outstanding - - 2.551316148 6.296996357 7.32285477
Days in Inventory 66.73184192 69.63385776 69.54626553 67.99349303 69.00263423
Days in Payables 42.90677664 46.73381939 46.61867848 44.45324197 45.21073871
Graph for Ratios
0
1
2
3
4
5
6
7
8
Jan-11 Jan-12 Jan-13
Days Sales Outstanding
55
60
65
70
75
Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Days in Inventory
35
40
45
50
Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Days in Payable
Graph for ATO
• With respect to 1/ATO, which can show the amount of
NOA used to generate dollars of sales. it can help us
understand the ability of the net operating assets(NOA)
to generate sales.
• The overall trend is falling down. Which means the firm is
adjusting its asset turnover .In general, the company’s
profit ability is increasing.
1/ATO ANALYSIS
Expense ratio
• Expense ratios calculate the percentage of
sales revenue that is absored by expense,it
shows the company’s revenues and expenses
structure.
• Gap used the expense very stable and
effictively
Expense ratios analysis
The End
Q&A

More Related Content

What's hot

Financials1 P
Financials1 PFinancials1 P
Financials1 P
emronly
 
Trend Analysis Of Balance Sheet Of Apple Company
Trend Analysis Of Balance Sheet Of Apple CompanyTrend Analysis Of Balance Sheet Of Apple Company
Trend Analysis Of Balance Sheet Of Apple Company
sunnychhutani28
 
Valuation Of Maruti Suzuki
Valuation Of Maruti SuzukiValuation Of Maruti Suzuki
Valuation Of Maruti Suzuki
Aakash Singh
 
Financial management VN
Financial management VNFinancial management VN
Financial management VN
Tài Đinh
 
Valuation Of ASHOK LEYLAND
Valuation Of ASHOK LEYLANDValuation Of ASHOK LEYLAND
Valuation Of ASHOK LEYLAND
Aakash Singh
 
Security analysis
Security analysisSecurity analysis
Security analysis
Muhammad Faisal Shaikh
 
Final work improved 6_revised (1)
Final work improved 6_revised (1)Final work improved 6_revised (1)
Final work improved 6_revised (1)
Qasim Ali Pracha
 
Rahul Mehrotra Presentation on Reliance Financial Ratio
Rahul Mehrotra Presentation on Reliance Financial RatioRahul Mehrotra Presentation on Reliance Financial Ratio
Rahul Mehrotra Presentation on Reliance Financial Ratio
INSTITUTE of TECHNOLOGY and SCIENCE(ITS) Mohan Nagar, Ghaziabad
 
Internal cashflow and investment decisions: Case of Pakistani sugar sector.
Internal cashflow and investment decisions: Case of Pakistani sugar sector.Internal cashflow and investment decisions: Case of Pakistani sugar sector.
Internal cashflow and investment decisions: Case of Pakistani sugar sector.
Mitsui & Co., Ltd.
 
FIN 667 Hershey Valuation PPT- Final
FIN 667 Hershey Valuation PPT- FinalFIN 667 Hershey Valuation PPT- Final
FIN 667 Hershey Valuation PPT- Final
Lisa Lee
 
Big Island Real Estate Statistics/Sales June 2014
Big Island Real Estate Statistics/Sales June 2014Big Island Real Estate Statistics/Sales June 2014
Big Island Real Estate Statistics/Sales June 2014
Eric West
 
CEO Dashboard Template in Excel
CEO Dashboard Template in ExcelCEO Dashboard Template in Excel
CEO Dashboard Template in Excel
Akram Hossain Siblee CPA, CA(UK)
 
Apple Financial Ratios 2014
Apple Financial Ratios 2014Apple Financial Ratios 2014
Apple Financial Ratios 2014
Zeeshan Hassan
 
Term paper presentation of managerial finance
Term paper presentation of managerial financeTerm paper presentation of managerial finance
Term paper presentation of managerial finance
Prisila Perveen
 
03. merger of microsoft and adobe (deb sahoo)
03. merger of microsoft and adobe (deb sahoo)03. merger of microsoft and adobe (deb sahoo)
03. merger of microsoft and adobe (deb sahoo)
Deb Sahoo, MBA(Finance), MS(EE), BTech(EE),
 
Cash Flow Dashboard in Excel
Cash Flow Dashboard in ExcelCash Flow Dashboard in Excel
Cash Flow Dashboard in Excel
Akram Hossain Siblee CPA, CA(UK)
 
Apple Company's Financial Analysis
Apple Company's Financial AnalysisApple Company's Financial Analysis
Apple Company's Financial Analysis
Zel Petten
 
Finance ppt
Finance pptFinance ppt
Finance ppt
Dinesh Jindal
 
Balance sheet of Bajaj auto limited
Balance sheet of Bajaj auto limitedBalance sheet of Bajaj auto limited
Balance sheet of Bajaj auto limited
Nirmal Shanmugam
 
Credit Analysis of HCC Excel
Credit Analysis of HCC ExcelCredit Analysis of HCC Excel
Credit Analysis of HCC Excel
Srivathsa Chakravarthy
 

What's hot (20)

Financials1 P
Financials1 PFinancials1 P
Financials1 P
 
Trend Analysis Of Balance Sheet Of Apple Company
Trend Analysis Of Balance Sheet Of Apple CompanyTrend Analysis Of Balance Sheet Of Apple Company
Trend Analysis Of Balance Sheet Of Apple Company
 
Valuation Of Maruti Suzuki
Valuation Of Maruti SuzukiValuation Of Maruti Suzuki
Valuation Of Maruti Suzuki
 
Financial management VN
Financial management VNFinancial management VN
Financial management VN
 
Valuation Of ASHOK LEYLAND
Valuation Of ASHOK LEYLANDValuation Of ASHOK LEYLAND
Valuation Of ASHOK LEYLAND
 
Security analysis
Security analysisSecurity analysis
Security analysis
 
Final work improved 6_revised (1)
Final work improved 6_revised (1)Final work improved 6_revised (1)
Final work improved 6_revised (1)
 
Rahul Mehrotra Presentation on Reliance Financial Ratio
Rahul Mehrotra Presentation on Reliance Financial RatioRahul Mehrotra Presentation on Reliance Financial Ratio
Rahul Mehrotra Presentation on Reliance Financial Ratio
 
Internal cashflow and investment decisions: Case of Pakistani sugar sector.
Internal cashflow and investment decisions: Case of Pakistani sugar sector.Internal cashflow and investment decisions: Case of Pakistani sugar sector.
Internal cashflow and investment decisions: Case of Pakistani sugar sector.
 
FIN 667 Hershey Valuation PPT- Final
FIN 667 Hershey Valuation PPT- FinalFIN 667 Hershey Valuation PPT- Final
FIN 667 Hershey Valuation PPT- Final
 
Big Island Real Estate Statistics/Sales June 2014
Big Island Real Estate Statistics/Sales June 2014Big Island Real Estate Statistics/Sales June 2014
Big Island Real Estate Statistics/Sales June 2014
 
CEO Dashboard Template in Excel
CEO Dashboard Template in ExcelCEO Dashboard Template in Excel
CEO Dashboard Template in Excel
 
Apple Financial Ratios 2014
Apple Financial Ratios 2014Apple Financial Ratios 2014
Apple Financial Ratios 2014
 
Term paper presentation of managerial finance
Term paper presentation of managerial financeTerm paper presentation of managerial finance
Term paper presentation of managerial finance
 
03. merger of microsoft and adobe (deb sahoo)
03. merger of microsoft and adobe (deb sahoo)03. merger of microsoft and adobe (deb sahoo)
03. merger of microsoft and adobe (deb sahoo)
 
Cash Flow Dashboard in Excel
Cash Flow Dashboard in ExcelCash Flow Dashboard in Excel
Cash Flow Dashboard in Excel
 
Apple Company's Financial Analysis
Apple Company's Financial AnalysisApple Company's Financial Analysis
Apple Company's Financial Analysis
 
Finance ppt
Finance pptFinance ppt
Finance ppt
 
Balance sheet of Bajaj auto limited
Balance sheet of Bajaj auto limitedBalance sheet of Bajaj auto limited
Balance sheet of Bajaj auto limited
 
Credit Analysis of HCC Excel
Credit Analysis of HCC ExcelCredit Analysis of HCC Excel
Credit Analysis of HCC Excel
 

Similar to THE GAP PRESENTATION

Work sample
Work sampleWork sample
Work sample
Sam Khoukha - CFC
 
Finance present
Finance presentFinance present
Finance present
Quyen Truong
 
02. lbo of micron technologies (deb sahoo)
02. lbo of micron technologies (deb sahoo)02. lbo of micron technologies (deb sahoo)
02. lbo of micron technologies (deb sahoo)
Deb Sahoo, MBA(Finance), MS(EE), BTech(EE),
 
Current Years Estimation PowerPoint Presentation Slides
Current Years Estimation PowerPoint Presentation SlidesCurrent Years Estimation PowerPoint Presentation Slides
Current Years Estimation PowerPoint Presentation Slides
SlideTeam
 
Pepsi & Coca Cola Financial Analysis
Pepsi & Coca Cola Financial AnalysisPepsi & Coca Cola Financial Analysis
Pepsi & Coca Cola Financial Analysis
Hassan Shahzad
 
ration analysis of wipro
ration analysis of wiproration analysis of wipro
ration analysis of wipro
Mayank Singhal
 
Startup4Chinese #14: Hate financial trouble? Guidelines for non-finance backg...
Startup4Chinese #14: Hate financial trouble? Guidelines for non-finance backg...Startup4Chinese #14: Hate financial trouble? Guidelines for non-finance backg...
Startup4Chinese #14: Hate financial trouble? Guidelines for non-finance backg...
Ke Zheng
 
Rightside group
Rightside groupRightside group
Rightside group
Cameron Fen
 
Columbia Sportsware Valuation
Columbia Sportsware Valuation Columbia Sportsware Valuation
Columbia Sportsware Valuation
Earl R. Hayton
 
120981064 new-doll
120981064 new-doll120981064 new-doll
120981064 new-doll
Faheem Mukhtar
 
Horniman Horticulture, FIL 349 ( Advanced Financial Theory and Problems)
Horniman Horticulture, FIL 349 ( Advanced Financial Theory and Problems)Horniman Horticulture, FIL 349 ( Advanced Financial Theory and Problems)
Horniman Horticulture, FIL 349 ( Advanced Financial Theory and Problems)
CameronMcintosh8
 
Rightside group
Rightside groupRightside group
Rightside group
Cameron Fen
 
nationwide 4Q06 Statistical Supplement
nationwide 4Q06 Statistical Supplementnationwide 4Q06 Statistical Supplement
nationwide 4Q06 Statistical Supplement
finance11
 
Brph apresentação call 2 t14 (eng)
Brph apresentação call 2 t14 (eng)Brph apresentação call 2 t14 (eng)
Brph apresentação call 2 t14 (eng)
brpharma
 
RatioOptum & CMS Median Ratio Hospital Industry1-99 beds100-19.pdf
RatioOptum & CMS Median Ratio Hospital Industry1-99 beds100-19.pdfRatioOptum & CMS Median Ratio Hospital Industry1-99 beds100-19.pdf
RatioOptum & CMS Median Ratio Hospital Industry1-99 beds100-19.pdf
sales113
 
financial accounting
financial accounting financial accounting
financial accounting
nishant bhatia
 
Neslte India Ltd_Financial Model Working.pdf
Neslte India Ltd_Financial Model Working.pdfNeslte India Ltd_Financial Model Working.pdf
Neslte India Ltd_Financial Model Working.pdf
DeepakKumar234566
 
financial accounting
financial accounting financial accounting
financial accounting
nishant bhatia
 
Analysis of Intelligent Reasoning Systems--copy
Analysis of Intelligent Reasoning Systems--copyAnalysis of Intelligent Reasoning Systems--copy
Analysis of Intelligent Reasoning Systems--copy
John J Frederick Jr
 
DABUR- DONE BY SNEHA
DABUR- DONE BY SNEHADABUR- DONE BY SNEHA
DABUR- DONE BY SNEHA
Sneha kamineni
 

Similar to THE GAP PRESENTATION (20)

Work sample
Work sampleWork sample
Work sample
 
Finance present
Finance presentFinance present
Finance present
 
02. lbo of micron technologies (deb sahoo)
02. lbo of micron technologies (deb sahoo)02. lbo of micron technologies (deb sahoo)
02. lbo of micron technologies (deb sahoo)
 
Current Years Estimation PowerPoint Presentation Slides
Current Years Estimation PowerPoint Presentation SlidesCurrent Years Estimation PowerPoint Presentation Slides
Current Years Estimation PowerPoint Presentation Slides
 
Pepsi & Coca Cola Financial Analysis
Pepsi & Coca Cola Financial AnalysisPepsi & Coca Cola Financial Analysis
Pepsi & Coca Cola Financial Analysis
 
ration analysis of wipro
ration analysis of wiproration analysis of wipro
ration analysis of wipro
 
Startup4Chinese #14: Hate financial trouble? Guidelines for non-finance backg...
Startup4Chinese #14: Hate financial trouble? Guidelines for non-finance backg...Startup4Chinese #14: Hate financial trouble? Guidelines for non-finance backg...
Startup4Chinese #14: Hate financial trouble? Guidelines for non-finance backg...
 
Rightside group
Rightside groupRightside group
Rightside group
 
Columbia Sportsware Valuation
Columbia Sportsware Valuation Columbia Sportsware Valuation
Columbia Sportsware Valuation
 
120981064 new-doll
120981064 new-doll120981064 new-doll
120981064 new-doll
 
Horniman Horticulture, FIL 349 ( Advanced Financial Theory and Problems)
Horniman Horticulture, FIL 349 ( Advanced Financial Theory and Problems)Horniman Horticulture, FIL 349 ( Advanced Financial Theory and Problems)
Horniman Horticulture, FIL 349 ( Advanced Financial Theory and Problems)
 
Rightside group
Rightside groupRightside group
Rightside group
 
nationwide 4Q06 Statistical Supplement
nationwide 4Q06 Statistical Supplementnationwide 4Q06 Statistical Supplement
nationwide 4Q06 Statistical Supplement
 
Brph apresentação call 2 t14 (eng)
Brph apresentação call 2 t14 (eng)Brph apresentação call 2 t14 (eng)
Brph apresentação call 2 t14 (eng)
 
RatioOptum & CMS Median Ratio Hospital Industry1-99 beds100-19.pdf
RatioOptum & CMS Median Ratio Hospital Industry1-99 beds100-19.pdfRatioOptum & CMS Median Ratio Hospital Industry1-99 beds100-19.pdf
RatioOptum & CMS Median Ratio Hospital Industry1-99 beds100-19.pdf
 
financial accounting
financial accounting financial accounting
financial accounting
 
Neslte India Ltd_Financial Model Working.pdf
Neslte India Ltd_Financial Model Working.pdfNeslte India Ltd_Financial Model Working.pdf
Neslte India Ltd_Financial Model Working.pdf
 
financial accounting
financial accounting financial accounting
financial accounting
 
Analysis of Intelligent Reasoning Systems--copy
Analysis of Intelligent Reasoning Systems--copyAnalysis of Intelligent Reasoning Systems--copy
Analysis of Intelligent Reasoning Systems--copy
 
DABUR- DONE BY SNEHA
DABUR- DONE BY SNEHADABUR- DONE BY SNEHA
DABUR- DONE BY SNEHA
 

THE GAP PRESENTATION

  • 1. Equity Analysis of A quantitative look through Trend Analysis, Comparative Analysis, and Financial Ratio Data Presented by: James, Susha Zhang, Renjun Ying
  • 2. Company Background • Founded as a single store in San Francisco in 1969, and is currently one of the top American companies within the family clothing store industry. SIC 5651 • Prides itself on quality and customer focus with product offerings in apparel, accessories, and personal care products for men, women, and children • Not unique. Many competitors. Barriers to entry relatively low; competitive scope crowded.
  • 3. Company Background (cont’d) • Gap differentiates through offering many brands at different price points and quality • Also targets various demographics • Various brand name subsidiaries also include:
  • 4. A Trend Analysis view 2009 2010 2011 2012 2013 Operating Assets Operating Cash 585.33 147.56 95 107.69 86 Net Receivables 0 0 205 297 331 Inventories 1506 98 107.57 107.24 116.73 Prepaid Expenses 356 73 40.7 41 42.4 Other Current Assets 387 86.8 74.4 93 98.7 Net Plant, Property & Equipment 2933 89.6 87.4 86 89.3 intangibles 197 94 89.3 89.3 160.4 deferred charges 0 0 0 0 0 Other Assets 429 118.1 93 96.5 94 Total Operating Assets 6393.33 98 93 96 101 Operating Liabilities Accounts Payable 975 105.3 107.6 109.3 117.3 Taxes Payable 57 72 87.7 8.8 189 Accrued Expenses 548 106 71.9 73.4 75.4 Other Current Liabilities 528 91.3 114 112.9 128.6 Total Operating Liabilities 2108 101 99 98 111 Net Operating Assets (NOA) 4285.33 96 90 95 96 REFORMULATED BALANCE STATEMENT TREND ANALYSIS
  • 5. A Trend Analysis view (cont’d): Reformulated Income Statement TREND ANALYSIS 2009 2010 2011 2012 2013 Sales 14526 97.7 101 99.8 107.7 Cost of Goods sold 8426 92.7 96.4 97 105.9 Gross profit 6100 104.6 107.1 96.2 110.3 Operating expenses Selling, General & Administrative expenses 3899 100.3 100.6 98.4 108.5 Depreciation, depletion&Amortization 653 100.3 99.2 90.7 85.6 Operating income from sales(before tax) 1548 117.2 127.1 92.9 125.5 Taxes Taxes as reported 617 115.7 126.1 86.9 117.7 Tax on financial items and other operating income 3.15 66.7 77.8 866.7 1033.3 Operating income from sales(after tax) 927.85 118.4 128 94.2 125.5 Extraordinary Items 0 0 0 0 0 Discontinued operations 0 0 0 0 0 Income before extraordinary items & discontinued operations927.85 118.4 128 94.2 125.5 Financing income/expense Interset expense 9 66.7 77.8 866.7 1033.3 Tax effect(35%) 3.15 66.7 77.8 866.7 1033.3 Net interest income/expense 5.85 66.7 77.8 866.7 1033.3 Noncontrolling interest-inc Acc 0 0 0 0 0 Preferred dividends 0 0 0 0 0 Savings due to common stock equivalents 0 0 0 0 0 Net financing income 5.85 66.7 77.8 866.7 1033.3 Non-operating income/expense 45 15.5 13.3 20 26.7 Special Items 0 0 15 0 0 Operating income(after tax) 967 114 123 86.1 117.4 Comprehensive income 967 114 123 86.1 117.4
  • 6. Trend Analysis 0 200 400 600 800 1000 1200 1400 January, 2009 January, 2010 January, 2011 January, 2012 January, 2013 Comprehensive Income
  • 7. Comparative Analysis 12 % 13 % 12 % 13 % Operating Assets Operating Cash 630.33 10 503.33 8 692.33 10 428.33 6 Accounts Recievables 297 5 331 5 2033 29 2129 29 Inventories 1615 26 1758 27 1148 16 1360 19 Prepaid Expenses 146 2 151 2 0 0 Other Current Assets 360 6 382 6 302 4 307 4 Property Plant and Equipment 2523 41 2619 41 2469 35 2579 36 Intangibles 176 3 316 5 175 2 175 2 Deferred Taxes 0 0 Other Assets 414 7 403 6 287 4 254 4 6161.33 100 6463.33 100 7106.33 100 7232.33 100 Operating Liabilities Accounts Payable 1066 52 1144 49 917 44 1011 46 Accrued Expenses 402 19 413 18 388 19 404 18 Taxes Payabable 5 0 108 5 0 0 0 0 Other Current Liabilities 596 29 679 29 764 37 804 36 2069 100 2344 101 2069 100 2219 100 THE GAP NORDSTROM OP CASH A/R INVENTO RY OTH CURRENT ASSETS PPE INTANG OTH ASST OP CASH A/R INVENTO RY OTH CURRENT ASSETS PPE
  • 8. Comparative Analysis (cont’d) 12 13 12 13 Sales 10,877.00 111.7 14497 107.9 Cost of Goods sold 6,221.00 112.6 8173.2 109.2 Gross profit 4,656.00 110.5 6323.8 106.4 Operating expenses Selling, General & Administrative expenses 3,023.00 111.5 3836.6 110.3 Depreciation, depletion&Amortization 371 115.6 592.3 94.4 Operating income from sales(before tax) 1,262.00 106.6 1438.1 135.1 Taxes Taxes as reported 436.00 103.2 536.2 135.4 Tax on financial items and other operating income 48.65 120.14 2.73 119.2 Operating income from sales(after tax) 777.35 107.62 874 133.2 Extraordinary Items 0 0 0 0 Discontinued operations 0 0 0 0 Income before extraordinary items & discontinued operations 777.35 107.62 874 133.2 Financing income/expense Interest expense 139 120 78 119.2 Tax effect(35%) 48.7 120 27.3 119.2 Net interest income/expense 90.3 120.3 50.7 119.2 Noncontrolling interest-inc Acc 0 0 0 Preferred dividends 0 0 0 Savings due to common stock equivalents 0 0 0 Net financing income 81.35 124.83 50.7 119.2 Non-operating income/expense 90.3 120.3 9 133.3 Special Items -13 0 0 0 Operating income(after tax) 773.3 103.09 833 136.3 Comprehensive income 773.3 103.09 833 136.3 NORDSTROM GAP
  • 10. Financial Ratios Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 ROCE 0.22042398 0.225311797 0.291421569 0.302359347 0.392190739 RNOA 0.216517748 0.266292192 0.30781493 0.213741316 0.287291865 NBC -0.385069342 -0.00405584 -0.006531532 0.031181533 0.039540369 FLEV -0.023175291 -0.156272746 -0.054411765 0.485419238 0.423403594 Spread 0.168551594 0.262236352 0.301283398 0.182559783 0.247751497 ROCE (definition two) 0.22042398 0.225311797 0.291421569 0.302359347 0.392190739 Asset Turnover 3.389703943 3.440304168 3.800933126 3.555187387 3.799404272 RNOA 0.216517748 0.266292192 0.30781493 0.213741316 0.287291865 PM 0.06387512 0.077403677 0.080984043 0.060120971 0.075614977 Operating Liability Leverage 0.491910775 0.516396998 0.543027475 0.505579951 0.569024574 Return on Operating Assets 0.151722185 0.182419335 0.206526121 0.148682184 0.190355436 Implict Interest 42.16 42.62 41.9 41.38 46.88 RNOA(difinition two) 0.216517748 0.266292192 0.30781493 0.213741316 0.287291865 ROCE(definition three) 0.22042398 0.225311797 0.291421569 0.302359347 0.392190739
  • 11. Graph for Ratios 0 0.1 0.2 0.3 0.4 0.5 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 ROCE 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 RNOA 0.44 0.46 0.48 0.5 0.52 0.54 0.56 0.58 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 OLLEV -0.2 0 0.2 0.4 0.6 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 FLEV
  • 12. Turnover Ratios Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Receivables Turnover - - 143.0634146 57.96414343 49.84394904 Inventory Turnover 5.46965271 5.241702984 5.248304811 5.368160742 5.289653128 Payables Turnover 8.50681474 7.81018981 7.829479769 8.210874704 8.073303167 Days Sales Outstanding - - 2.551316148 6.296996357 7.32285477 Days in Inventory 66.73184192 69.63385776 69.54626553 67.99349303 69.00263423 Days in Payables 42.90677664 46.73381939 46.61867848 44.45324197 45.21073871
  • 13. Graph for Ratios 0 1 2 3 4 5 6 7 8 Jan-11 Jan-12 Jan-13 Days Sales Outstanding 55 60 65 70 75 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Days in Inventory 35 40 45 50 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Days in Payable
  • 15. • With respect to 1/ATO, which can show the amount of NOA used to generate dollars of sales. it can help us understand the ability of the net operating assets(NOA) to generate sales. • The overall trend is falling down. Which means the firm is adjusting its asset turnover .In general, the company’s profit ability is increasing. 1/ATO ANALYSIS
  • 17. • Expense ratios calculate the percentage of sales revenue that is absored by expense,it shows the company’s revenues and expenses structure. • Gap used the expense very stable and effictively Expense ratios analysis