Essay about Financial Analysis of Macy’s Inc. and Nordstrom

4023 Words Mar 10th, 2013 17 Pages
Financial Analysis of Macy’s Inc. and Nordstrom

Macy’s Inc. has established itself as a strong player in the retail industry, with over 850 Macy’s and Bloomingdale’s stores in 45 states. Macy’s competes against retail giants like Nordstrom, Kohl’s, JC penny and Saks Fifth Avenue for market share in the increasingly competitive department store industry. This financial report will choose Nordstrom as the major competitor, and serves as the comparison company.
The annual report and 10-K filings were obtained from Yahoo! Finance. The financial statements for both companies used in this report are Consolidated Statement of Income, Consolidated Balance Sheets, and Consolidated Statement of Cash Flow from 2010 to 2012. All tables are
…show more content…
Macy’s profit margin ratio kept growing over three years: from 1.4% in 2009 to 3.4% in 2010, and this ratio increased to 4.8% in 2011. The increasing profit margin indicated that Macy’s management has strong ability to control its expenses.
2.3 Cash flow analysis
Table 5 is the most recent cash flow statement for Macy’s. Net cash provided by operating activities in 2011 was $2,093 million, compared to $1,506 million provided in 2010, reflecting higher net income and a lower pension contribution in 2011. In 2011, Macy’s pension funding contributions was $375 million, which was much lower than $825 million in 2010. The capital expenditure for property and equipment and capitalized software during 2011 was $764 million, the dividends paid was $148 million. Macy’s generated sufficient amounts of cash from operations in 2011 to cover its capital expenditures and dividends.
Net cash used by investing activities and financing activities was $617 and $113million respectively for 2011. Investing activities for 2011 include purchases of property and equipment totaling $555 million and capitalized software of $209 million. Cash flows from investing activities included $114 million from the disposition of property and equipment for 2011. For financing activities, Macy’s issued $800 million of debt in 2011, but it is partially offset by the acquisition of

Related Documents