Summary: Financial Analysis Of Macy & Rsquo

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Running head: Financial analysis of Macy’s Financial analysis of Macy’s Casie Liu BAA 510, Fundamentals of Accounting and Finance April 30, 2009 Background information Macy’s, Inc. (“Macy’s”) and its predecessors have been operating department stores since 1820. The Company is a retail organization operating retail stores and Internet websites under two brands (Macy’s and Bloomingdale’s) that sell a wide range of merchandise, including men’s, women’s and children’s apparel and accessories, cosmetics, home furnishings and other consumer goods. In May 2007, the stockholders of Federated Department Stores, Inc. approved changing the name of the company from Federated…show more content…
(“Macy’s”) completed the acquisition of The May Department Stores Company (“May”) by means of a merger of May with and into a wholly-owned subsidiary of Macy’s (the “Merger”). Upon the completion of the Merger, the Company acquired May’s approximately 500 department stores and approximately 800 bridal and formalwear stores. Most of the acquired May department stores were converted to the Macy’s nameplate in September 2006, resulting in a national retailer with stores in almost all major markets.  As a result of the acquisition and the integration of the acquired May operations, as of January 31, 2009, the continuing operations of the Company included 847 stores in 45 states, the District of Columbia, Guam and Puerto Rico under the names “Macy’s” and “Bloomingdale’s.”, comprising a total of approximately 154,300,000 square feet. Of such stores, 466 were owned, 263 were leased and 118 stores were operated under arrangements where the Company owned the building and leased the…show more content…
CFO is larger than net income each year due to the noncash charges of depreciation and amortization. In 2008, net income is negative, but CFO is still positive as $1,879 million due to the one time goodwill impairment charges. Inventory has decreased from 2006 to 2008, after its acquisition of May in 2005. Receivables also decreased each year, which maybe a sign that the company’s receivable quality has improved. Macy’s decreased its purchase of inventory and property and equipment and decrease disposition of property and equipment year by year. The cash flow changes of property and equipment are difficult to evaluate because the company opens and closes several stores each year. The cash used to capitalized software increased each year, which maybe a good investment because it could help the company generate more website sells. In 2006, Macy’s got $1,887 million from proceeds from the disposition of After Hours Formalwear and Lord & Taylor, which caused a cash inflow from

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