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HW3 - their sales higher I believe that Neiman Marcus would...

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Sarah Neff A35710843 RET261 – Section 1 Homework #3 Chapter 6: #5,8,9 5. Neiman Marcus (a chain of high-service department stores) and Wal-Mart target difference customer segments. Which retailer would you expect to have a higher asset turnover? Net profit margin percentage? Why? Due to the differences in the appearance of the stores, I would expect Wal-Mart to have a higher asset turnover due to the fact that they don’t spend as much money on making an attractive environment for their customers to shop in. Wal-Mart customers are more interested in buying things that are the cheapest, not the best, so they don’t care to have a huge variety in items to choose from. Both of these factors lead to a higher turnover. Because Neiman Marcus has higher end clothing, therefore making the amount of
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Unformatted text preview: their sales higher, I believe that Neiman Marcus would make a larger net profit margin. 8. Using the following information taken from Lowe’s 2005 annual report, determine its asset turnover, net profit margin percentage, and ROA (figures are in $ millions). Net sales $36,464 Total assets $21,209 Net profit $2,176 Asset turnover: Net profit margin percentage: Return on Assets: 9. Using the following taken from the 2005 balance sheet and 2005 income statement for Urban Outfitters, develop a strategic profit model (figures are in $000). Net Sales $827,750 Cost of goods sold $489,000 Operating Expenses $198,384 Interest Expenses $0 Inventory $98,996 Accounts Receivable $8,364 ` Other current assets $171,508 Fixed Assets $271,776 See next page....
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