Essay on The Balance Sheet Of Sprouts And Whole Foods

1852 Words May 19th, 2016 null Page
Over the past three years Sprouts (SFM) has produced a positive net income that has struggled to grow. Sprouts net income in 2015, 2014, and 2013 was $92, $81, and $116 million respectively. The $35 million decrease in net income from 2013 to 2014 is due to the adjustment of operating leases to capitalized leases which will be discussed later. Whole Foods Market (WFM) experienced a decline in net income from 2013 through 2015. The net income for 2015, 2014, and 2013 was $192, $283, and $285 million respectively. The cost of sales portion constitutes the largest portion of the income statement for both companies and it has been decreasing as a percentage of revenues since 2012 for sprouts and slightly increased for Whole Foods.
The balance sheet of Sprouts and Whole Foods is comprised substantially of property, plant and equipment for assets with over 70% of total assets for SFM and over 90% for WFM. The liabilities and stockholders’ equity of both companies consist mostly of long term debt, almost 50% for SFM and 57% for WFM. In 2012 the retained earnings was at a deficit for Sprouts and then after the IPO, as the company began to increase revenues and margins, the retained earnings balance steadily increased to 9% of total liabilities and stockholders equity. Whole Foods retained earnings, on the other hand, has remained steady and actually increased from 10% of total liabilities and stockholders’ equity in 2012 to 13% in 2015. The levels of cash and cash equivalents has…

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