Kohl’s Corporation has a market cap of $ 12,150,841,350 billion, and it is one of the successful store chains in the United States. It offers a variety and exclusive merchandise to customers in an exciting and friendly environment (www.kohlscorporation.com). Also, Kohl’s keeps low retail prices through a low-cost, limited staffing, structure and continuing management information systems, as well as advertising. I use the DuPont analysis for Kohl’s Corporation in order to determine where the company is strong or weak such as the inventory, margins or debt structure. As the results of the DuPont analysis, Kohl’s has a higher ROE for 2010 and 2011 compare to JC Penney; for this reason, Kohl’s earns on shareholder equity for both years. This analysis
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Kohl’s has a net sales increase of 3.4% to 3.6% in depreciation and amortization due to new stores. For favorable lease rights, Kohl’s begins to amortize when they open new shops and the report show that the accumulated depreciation went from $119 million in 2010 to $130 million in 2011. Also, per year Kohl is estimated its favorable lease rights to be $10 million for 2014 and 2015. The net profit margin improved from 5.7% in 2010 to 6% in 2011 due to the increase in net income. For this reason, 5.7 % and 6% show that Kohl’s should control more its costs that buy its goods and services at higher prices than the price of providing or producing them. In addition, Kohl’s asset turnover increased from 2010 to 2011and it means that every $1 worth of goods produced $1.3 and $1.4 of Kohl’s revenue. In addition, Kohl’s has a better Return on Equity than others competitors of its industry. A lower equity multiplier means that a company is more favorable than one that has a higher ratio. For this reason, a lower rate does not has a high debt servicing costs and depends less on debt financing. Based on the results, Kohl’s has a smaller risk of debt than its competitors because it able to manage the principal repayment as well as interest payment. Kohl’s does not
Kohl’s has a net sales increase of 3.4% to 3.6% in depreciation and amortization due to new stores. For favorable lease rights, Kohl’s begins to amortize when they open new shops and the report show that the accumulated depreciation went from $119 million in 2010 to $130 million in 2011. Also, per year Kohl is estimated its favorable lease rights to be $10 million for 2014 and 2015. The net profit margin improved from 5.7% in 2010 to 6% in 2011 due to the increase in net income. For this reason, 5.7 % and 6% show that Kohl’s should control more its costs that buy its goods and services at higher prices than the price of providing or producing them. In addition, Kohl’s asset turnover increased from 2010 to 2011and it means that every $1 worth of goods produced $1.3 and $1.4 of Kohl’s revenue. In addition, Kohl’s has a better Return on Equity than others competitors of its industry. A lower equity multiplier means that a company is more favorable than one that has a higher ratio. For this reason, a lower rate does not has a high debt servicing costs and depends less on debt financing. Based on the results, Kohl’s has a smaller risk of debt than its competitors because it able to manage the principal repayment as well as interest payment. Kohl’s does not