DuPont+Exercise+Revised

As of february 2 2008 the company operated either

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processes some of the food for sale in its supermarkets. As of February 2, 2008, the Company operated, either directly or through its subsidiaries, 2,486 supermarkets and multi-department stores, 696 of which had fuel centers. Approximately 43% of these supermarkets were operated in Company-owned facilities, including some Company-owned buildings on leased land. It operates retail food and drug stores, multi-department stores, jewelry stores, and convenience stores throughout the United States. The Company operated 42 manufacturing plants, primarily bakeries and dairies, which supply approximately 43% of the corporate brand units sold in the retail outlets.” The data in Table 1 (attached) concerns the three firms described above. Please review the data and be prepared to discuss your observations and conclusions about the three firms. In particular, what are the key differences in their financial performance? Can you explain those differences using the data provided? How do you expect the financial performance to behave in the future? What other data would be useful in drawing conclusions and thinking about the future?
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Best Buy (BBY) Whole Foods (WFMI) Year 2008 2007 2006 2005 2008 2007 2006 2005 Price Earnings Ratio 13 22.4 Price to Book Ratio 3.81 2.44 Current Ratio 1.08 0.87 Quick Ratio 0.39 0.43 Gross Margin 24.00% 35.00% Operating Margin 5.40% 4.50% 5 Year Revenue Growth (average) 13.80% 19.60% 5 Year Income Growth (average) 17.70% 17.50% Revenue ($ millions) 40,023 35,934 30,848 6,592 5,607 4,701 Net Income ($ millions) 1,407 1,377 1,140 183 203 136 Assets ($ millions) 12,758 13,570 11,864 10,294 3,213 2,043 1,889 1,521 Equity ($ millions) 4,484 6,201 5,257 4,449 1,459 1,404 1,366 950 Return on Sales 3.52% 3.83% 3.70% 2.78% 3.62% 2.89% Asset Turnover 3.04 2.83 2.78 2.51 2.85 2.76 Equity Multiplier 2.46 2.22 2.28 1.84 1.42 1.47 Return on Assets 11.00% 10.10% 9.60% 5.70% 9.90% 7.20% Return on Equity 26.30% 24.00% 23.49% 12.80% 14.70% 11.74% Average Assets 13,164 12,717 11,079 2,628 1,966 1,705 Average Equity 5,343 5,729 4,853 1,432 1,385 1,158
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