Trader Joe's - Ratio Analysis

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School

Iowa Central Community College *

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1

Subject

Economics

Date

Feb 20, 2024

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docx

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1

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TRADER JOE’S – RATIO ANALYSIS REFRESHER INSTRUCTIONS : Conduct a financial analysis of the four firms in the supermarket industry with the data provided below. Questions : 1. In general, what does the data show with respect to the supermarket industry (overall margins and asset turnover)? Support your answers with data. Supermarket industry runs on low profit margin as the net profit margin is low ranging from -2.88 % to 3.39%. Assets are used optimally to obtain high revenue as supported by high asset turnover ratio 2. Does one firm have a competitive advantage? Support your answers with data (e.g., Profit Margin, ROA, ROE) Yes the firm whole foods looks to have advantage as they have best ratios like ROR, Asset turnover and ROA. 3. Calculate Profit Margin and Turnover. What do these ratios suggest with respect to the different strategies pursued by the four firms? Ratios suggest that industry is using assets optimally and profit ratios vary for company to company due to different strategies. Some firms depends on equity and other on assets more for turnover Whole Foods Kroger Safeway Supervalue Revenue $10,107,787 $90,374,000 $43,630,200 $36,100,000 COGS $6,571,238 $71,494,000 $31,836,500 $28,081,000 Gross Profit $3,536,549 $18,880,000 $11,793,700 $8,019,000 SG&A and other $2,988,929 $17,602,000 $10,659,100 $8,538,000 Operating Income $547,620 $1,278,000 $1,134,600 -$519,000 Net Income $342,612 $602,000 $516,700 -$1,040,000 Total Assets $4,292,075 $23,476,000 $15,073,600 $12,053,000 Total Liabilities $1,300,770 $19,510,000 $11,384,500 $12,032,000 Total Equity $2,991,305 $3,966,000 $3,689,100 $21,000
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