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Financial Reporting - Assignment Example
Finance & Accounting
Pages 4 (1004 words)
Introduction The company in discussion is The Kroger Co.(KR). It is a renowned name in the retail industry of United States. It has more than 2400 retail grocery stores and multi-department stores in 31 states. Kroger Co. sells grocery and other household pertinent items to people in United States…
Kroger Co. has a substantial customer base and it and it takes great pride in its loyal customer base as approximately one half of US households have a Kroger loyalty card. This has been a result of Customer 1st strategy that Kroger Co. believes in. It has also been popular among shareholders for its consistent dividend payments. In 2010, it gave out $250 million along with maintaining high investment-grade credit rating and reducing its leverage which eventually resulted in capital gain. Ratios Profitability Ratios Profitability ratios are an indicator of a company’s performance over the year. (BESLEY, Scott and Brigham, Eugene F., 2008) Profitability ratios include operating profit margin, net profit margin, return on asset, and return on equity (FABOZZI, Frank J. et al., 2003). Sales increased by 7.1% to $82.2 billion in 2010, which is more than its competitors. Operating profit margin is calculated by dividing the operating profit by the net sales. The operating profit for the year was $2182 M, as compared to net sales of $82189 M. The operating profit margin was 2.65% for the year. Net profit margin is calculated by dividing the net profit after tax by the net sales amount (PUXTY, Anthony G. et al., 1988). Net profit for the year was $1116 M and it constituted 1.36% of the sales. ...
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