Jcpenny Financial Analysis Paper

JCPenny is a retail store that sells clothing, shoes, jewelry, houseware, and much more. JCPenny is a publicly traded stock, meaning anyone can purchase their stock. When JCPenny was first founded in 1902, it was very popular among Americans and was succeeding. They had opened more than 2,000 stores by 1973, 19 of them being outlet stores. Their business continued to grow until 2010, they then began to fall into a depression. In 2011, JCPenny announced that they would be closing all of their outlet stores. Then in 2013, JCPenny announced that they would begin to downsize their employees. Since then JCPenny has continued to close underperforming stores and laying off employees. In March of 2017, they released a list of another 138 stores that they would be closing.
JCPenny does have a major lawsuit that they should be concerned with. They were sued in December of 2016 for misleading …show more content…
Since 2010, JCPenny has continued to downsize. Based on their income statement in 2013 they lost profits. Their net income was a negative $1,388. In 2014 the income increased $617 from the previous year, however, they were still in the hole. So, based on that factor alone I would not be willing to invest my money in JCPenny. Even though the vertical analysis shows that the cost of operations is falling, and the gross income is increasing, they are still doing poorly. The ratios I conducted from the income statement and balance sheet does not show promising results for JCPenny. Their inventory turnover was three. Usually, a higher inventory turnover is preferred because it indicates that more sales. So JCPenny’s turnover of three is not the best. The other ratios that I conducted including the quick ratio, current ratio, and working capital, all concluded that JCPenny is struggling for business. So again, after analyzing JCPenny’s 10k statement I would not invest my money in their