Use this Excel spreadsheet to compute ratios; show your computations for all ratios on this tab and also include your commentary. The financial statements used to calculate these ratios are available in Appendix A and Appendix B of your textbook. Kohl’s J. C. PenneyInterpretation and Comparison between the two companies’ ratios (Reading the Appendix of Chapter 13 will help you prepare the commentary) Earnings per shareAs given in the income statement$3. 67Basic Common$1. 60 Earning per share express net income earned on a per share basis which provides a useful information for shareholders to determin profitability .
JC Penne has a higher rate and Kohl’s has zero because they didn’t declared any dividends. Net income$1,114$389 Return on Common Stockholders’ EquityNet income – Preferred stock dividend1,114=14. 0%$389=7. 6% This ratio shows how many dollars of net income the company earned for each dollar invested by the owners. Kohl’s has a better advantage in this profitibility ratio. Average common stockholders’ equity7,977. 50$5,119 Free cash flowCash provided by operations minus capital expenditures minus cash dividends paid$915=$915 $(96. 00) = $(96. 0)In this measure of solvency, Kohl’s has 915 million in cash remaining from operating activities after adjusting for capital expenditures and dividends paid. But JC Penne has a negative blance of 96 million. Current cash debt coverage ratioCash provided by operations$1,676=0. 66$592 =0. 20This is the ratio of cash provided by operating activities to average current liabilities. Kohl’s has better ratio than JC Penne. Average current liabilities$2,550$2,948 Cash debt coverage ratioCash provided by operations$1,676=0. 31$592 =0. 08This is a cash-basis measure of solvency.
The Review on Determinants of Dividend Payout Ratio
Determinants of Dividend Payout-Ratio: A Study of Philippine Stock Exchange-Listed Banks, 2007-2011 Introduction Dividend policy is one of the most controversial subjects in finance literature and still `management always ponders about the dividend payment and also why investors need to pay attention on dividend. It is also a corporate profit that is paid out or considered as an income by the ...
This ratio indicates a company’s ability to repay its liabilities from cash generated from operating activities without having to liquidate the assets used in its operations. In this solvency ratio, Kohl’s has higher ratio than JC Penne. Average total liabilities$5,385$7,693 Price/Earnings ratioMarket price as of 01/31/2011$50. 78=14$32. 07 =20This measures the ratio of the market price of each share of common stock to the earnings per share. EPS as of 01/31/2011$3. 67$1. 60 It reflects investors’ assessments of a company’s future earnings. JC Penne has a better ratio than Kohl’s.
