FINANCIAL AND STRATEGIC PERSPECTIVE

Financial Analysis Ratio and Strategic perspective of Whole Foods

Financial Ratio Analysis and Strategic perspective of Whole Foods

Question no: 4)

Financial Analysis of the Whole Foods

The sales of the Whole Foods have increased consecutively throughout the past five years which is a positive sign and its show that the company is enjoying a constant growth in terms of market share. Gross profit- the gross profit of Whole Foods has also increased in the past five years with a positive increment.

Ratio analysis

Profitability Ratios

The overall analysis of the profitability ratios of the whole foods has shown a slight decline with return on investment has decreased from 22.87 % to 16.11 %.

Liquidity Ratio Analysis

The liquidity ratio of the company has also declined with Net Current Assets % TA (3.63) in year 2007, where as it was 5.59 in the year 2006 (Vandyck, 2006).

Debt Management

The debt to equity ratio (geared ratio) has also increased from 0.01 to 0.5, which is a negative aspect as it will increase the interest expense for the company.

Asset Management

The overall asset management of the company has shown positive sign with receivables turnover decreasing from 75.57 to 36.81.

Per Share

The per share ratios of the company has also shown a decline in terms of cash flow per share, whereas the book value per share of the company has increased from 10.06 to 10.48 (Vandyck, 2006).

Balance Sheet Analysis (Year Ending 2006-2007)

The analysis of the consolidated balance sheet of the company it is observed that the total assets of the company have increased from $2,042,996 to $3,213,128. While on the other hand the share holder's equity of the company has also increased from $1,404,143 to $ 1,458,804. The overall financial performance of the company is positive however, few ratios are not positive such as profitability and liquidity ratios.

Ratio analysis

Company Financials

 

 

 

 

 

 

Profitability Ratios

09/30/2007

09/24/2006

09/25/2005

09/26/2004

09/28/2003

ROA % (Net)

6.84

10.4

8.02

10.12

9.72

ROE % (Net)

12.56

14.76

11.62

15.58

15.23

ROI % (Operating)

16.11

22.87

18.11

21.86

20.66

EBITDA Margin %

7.44

8.78

7.85

9

8.86

Calculated Tax Rate %

40

40

42.5

40

40

Revenue per Employee

123,527

135,816

124,058

120,734

118,693

Liquidity Ratios

09/30/2007

09/24/2006

09/25/2005

09/26/2004

09/28/2003

Quick Ratio

0.34

0.55

0.88

0.77

0.85

Current Ratio

0.85

1.22

1.61

1.46

1.52

Net Current Assets % TA

(3.63)

5.59

13.45

10.12

10.37

Debt Management

09/30/2007

09/24/2006

09/25/2005

09/26/2004

09/28/2003

LT Debt to Equity

0.5

0.01

0.01

0.17

0.21

Total Debt to Equity

0.52

0.01

0.01

0.17

0.22

Interest Coverage

70.69

9,969.03

103.34

31.63

21.61

Asset Management

09/30/2007

09/24/2006

09/25/2005

09/26/2004

09/28/2003

Total Asset Turnover

2.47

2.86

2.77

2.85

2.95

Receivables Turnover

36.81

75.57

71.62

69.88

82.18

Inventory Turnover

17.47

19.27

18.62

18.22

17.82

Accounts Payable Turnover

37.32

49.93

48.58

47.42

47.68

Accrued Expenses Turnover

36.09

37.84

24.9

19.59

23.23

Property Plant & Equip Turnover

4.47

4.91

4.88

4.86

4.63

Per Share

09/30/2007

09/24/2006

09/25/2005

09/26/2004

09/28/2003

Cash Flow per Share

2.8

3.26

3.17

2.69

2.37

Book Value per Share

10.48

10.06

10.05

7.92

6.46

 

 

 

 

 

 

Question no: 2

The whole food market company is following the strategy of expansion, the company is experiencing an increase in the capital expenditure due to the opening of new stores. However they have planned to cut down the number of new stores to be opened in the year 2009. On February 21 the ...