Whole Foods Financial Analysis Paper

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Financial Statement Analysis of Whole Foods Market, Inc. Darya Bechtel, Elizabeth Bishop, Kelly Fisher, Hafeza Islam, Maura Langan, and Jessica Zetnick This paper is submitted in partial fulfillment of the requirements for BUS 5473.50 Texas Woman’s University School of Management Dr. Baker November 26, 2013 Table of Contents Executive Summary 5 Company Description 6 Industry Description 7 The Economy 8 Profitability Analysis 10 Return on Assets Ratio 10 Cost of Goods Sold to Sales Ratio 11 Gross Profit Margin 11 Operating Profit Margin 12 Net Profit Margin 12 Horizontal Analysis of Income Statement 13 Vertical Analysis of Income Statement 14 Liquidity Analysis 15 Current Ratio 15 Quick Ratio 15 Accounts Receivables…show more content…
are the chosen direct competitors of Whole Foods for the purposes of this analysis based on financial results, type of inventory, and appearance in most recent headlines. Horizontal and vertical analyses of the company’s balance sheet, income statement, and statement of cash flows, as well as ratio analyses over a five year period are the methodologies used to analyze Whole Foods and compare the company to its competitors. The company’s complete financial statement analysis consists of an analysis of liquidity, profitability, operating effectiveness, solvency, and marketability. Whole Foods’ financial statement analysis revealed a level of liquidity, profitability and solvency that was stronger than its competitors overall. The company is also operating more effectively than its competitors based on management procedures, including a continuously improving quality and internal controls system. Whole Foods is also educating consumers about healthy eating and the benefits of natural and organic products. This strategy is accompanied by the company’s goals of reducing prices and costs while growing its own brand. The company’s effective strategies resulted in 2012 being the best year in the company’s 32 year history and a very positive market view on the company. Based on the complete financial statement analysis of the company, it is a reasonable prediction that Whole Foods Market, Inc. is going to remain in the position of a market leader…show more content…
This ratio shows the percentage of a company’s total liabilities to its shareholder’s equity. A low debt to equity ratio is favorable as it indicates lower risk. A high ratio is not favorable for a company as it indicates that the business is relying more on external lending, and this can be risky for a business. According to Table D1, in 2008 the debt to equity ratio for Whole Foods was 61.7 and in 2012 it was 0.46. The decreasing trend of this ratio is positive as it indicates a strengthening equity position. In 2008, Kroger’s debt-to equity ratio was 168.59 and in 2012 it was 211.05. In 2008, Safeway’s ratio was 81.04 and in 2012 it was 190.37. The debt to equity ratio of both Kroger and Safeway has an increasing trend, indicating weakening equity

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