Академический Документы
Профессиональный Документы
Культура Документы
Program:
BACHELORS OF BUSINESS ADMINISTRATION PROGRAM
Acknowledgement
First of all, I would like to Thanks to Allah for providing me the potency, courage and skills to learn, and acquire the knowledge and the ability to accept and meet the challenges. And also I would like to express my sincere gratitude to my supervisor Sir Imtiaz Ahmed. Then thanks to those who have helped in performing this project especially my friends and family. I hope this project will be beneficial for the students of MIS. Once again I would like to thank all those who have been involved directly or indirectly in this project.
LETTER OF TRANSMITTAL
To: From: Date: Sir Imtiaz Ahmed Abdul Qayoom March 26, 2012
Subject: Measure the Performance of Kroger Company All praises and thanks are for Almighty ALLAH Who is the source of all knowledge and wisdom endowed to mankind and to the humanity as a whole. Behind, every project is a vision and in order to complete a successful project we must have a determination to complete that vision. We would like to say the words of appreciation to our course instructor Sir Imtiaz Ahmed for motivating us for going towards that vision and his abilities to turn that vision into reality. The encouragement and assistance of our parents and friends are gratefully acknowledged. We are extremely indebted to the individuals who supplied us with ample help, guidance and information without which this report would never have been completed. We regret if we have forgotten to mention anyone concerned.
Karachi, Campus
Contents
Executive Summary....................................................................................................................................... 6 Company History........................................................................................................................................... 7 Financial Ratios ............................................................................................................................................. 9 For Kroger Co and CVS Caremark.............................................................................................................. 9 Human Resource Ratios .............................................................................................................................. 16 Interpretations for Human Resource Ratios ........................................................................................... 17 Marketing Ratios ......................................................................................................................................... 18 Interpretations for Marketing Ratios ...................................................................................................... 19 Supply Chain Ratios ..................................................................................................................................... 20 Interpretations for Supply Chain Ratios.................................................................................................. 21 Balance Sheet.............................................................................................................................................. 22 Income Statement ...................................................................................................................................... 23 Bibliography ................................................................................................................................................ 25
Executive Summary
The report includes the balanced scorecard for Kroger Co. which includes Marketing metrics, HR Metrics, Financial Metrics and Supply Chain Metrics. These metrics are used to calculate different ratios for different departments for an organization. The Kroger Co. is an American retail supermarket chain founded by Bernard Kroger in 1883 in Cincinnati, Ohio. It reported US$ 8.2 billion in sales during fiscal year 2011. It is the country's largest grocery store chain and its second-largest grocery retailer by volume and second-place general retailer in the country, with Wal-Mart being the largest. Kroger Company operates through supermarkets, convenience stores and jewelry stores with the main revenue generator are supermarkets.
Company History
The Kroger Co. operates grocery retail stores under the following banners: Supermarkets - Kroger, Ralphs, Dillons, Smith's, King Soopers, Fry's, QFC, City Market, Owen's, Jay C, Pay Less, Baker's, Gerbes, Scott's Food & Pharmacy Multi-department stores - Fred Meyer Dillons Marketplace, Fry's Marketplace, Kroger Marketplace, Smith's Marketplace Price-impact warehouse stores - Food 4 Less, Foods Co
Kroger operates its grocery retail stores in the following four formats: Supermarkets Multi-department stores Price-impact warehouse stores Marketplace stores
Supermarkets
The combination food and drug store is Kroger's primary supermarket format. These stores are able to earn a return above the cost of capital by drawing customers from a 2 - 2.5 mile radius. Although considered "neighborhood stores" - in terms of size, shopping experience, and travel time - they are large enough to offer the high-margin specialty departments that customers desire. Specialty departments include: whole health sections, pharmacies, pet centers and worldclass perishables, such as fresh seafood and organic produce.
Multi-department stores Fred Meyer - Operated successfully by Fred Meyer since 1922, the multi-department store is a
unique one-stop shopping experience. Fred Meyer is the nation's third-largest supercenter operator. Stores average over 165,000 square feet and carry more than 225,000 food, apparel, and general merchandise products under one roof. The multi-department stores include a broad selection, including: Full-line supermarket Apparel Home fashion Shoes Accessories Garden Home electronics
7
An important part of Fred Meyer's competitive advantage is its emphasis on national brand products, such as Levi's, Columbia Sportswear, Nike, Kitchen Aid, adidas, Skechers, Dockers, Carhartt, Apple, Panasonic, Nikon, Canon, Jockey, Krups, Ashley, and Sony. Also included are many private-label products that offer high-quality alternatives at lower prices.
Marketplace Stores
These multi-department stores offer full-service grocery, pharmacy and expanded general merchandise including outdoor living products, electronics, home goods and toys. Marketplace stores opened during the last two years range in size from 100,000 to 130,000 square feet.
These stores average more than 57,000 square feet in size and offer budget-conscious shoppers everyday low prices, superior quality, and a wide selection of national brand groceries, health and beauty care items, meat, dairy products, baked goods and fresh produce.
Fuel pumps (three to seven) Kiosk to buy cigarettes, snacks, candy and miscellaneous oil-related products Well-lit canopy that covers the entire center
All of the fuel centers accept credit and debit cards at the pump. In most divisions, the gasoline offering is tied to the loyalty program.
Financial Ratios
For Kroger Co and CVS Caremark
1.2908
Kroger Co
Here the number of assets is 23505000 and number of liabilities is 18209000 which is greater than assets. Therefore the current ratio is not very good since the company cannot pay off its short-term liabilities with its short-term assets.
CVS Caremark
Here the number of assets is 18594000 and is greater than number of liabilities which is 11956000. Therefore the current ratio is very good since the company can pay off its short-term liabilities with its short-term assets.
.2727
Kroger Co
Quick ratio is a liquidity indicator that further refines the current ratio by measuring the amount of the most liquid current assets. Higher ratio means more liquid assets. Here the ratio is 0.272 which is relatively lower so company assets are not in liquid position.
CVS Caremark
Quick ratio is a liquidity indicator that further refines the current ratio by measuring the amount of the most liquid current assets. Higher ratio means more liquid assets. Here the ratio is 0.6929 which is slightly higher so company assets are in slightly liquid position
.7746
Kroger Co
Debt ratio is the one which is used to gain a general idea as to the amount of leverage being used by a company. A low percentage means that the company is less dependent on leverage, i.e., money borrowed from and/or owed to others. Here the debt ratio is very high which means company is heavily dependent on leverage.
CVS Caremark
Debt ratio is the one which is used to gain a general idea as to the amount of leverage being used by a company. A low percentage means that the company is less dependent on leverage, i.e., money borrowed from and/or owed to others. Here the debt ratio is very low which means company is not dependent on leverage.
10
20.97
10.66
Kroger Co
Inventory turnover is the ratio which indicates the inventory cycle over a given period of time. Lower the turnover ratio, better the cycle. Here the turnover ratio is 20.97 which are good.
CVS Caremark
Inventory turnover is the ratio which indicates the inventory cycle over a given period of time. Lower the turnover ratio, better the cycle. Here the turnover ratio is 10.66 which is good.
1.952
Kroger Co
Earnings per share serve as an indicator of a company's profitability. The greater earning per share represents the good profitable position of the company. Here the EPS is 1.952 which is very low and reflects the bad condition of the company.
11
CVS Caremark
Earnings per share serve as an indicator of a company's profitability. The greater earning per share represents the good profitable position of the company. Here the EPS is 0.3588 which is very good and reflects the good condition of the company. 6. Return on Assets= Net income/ Total Assets
1.507
Kroger Co
This ratio indicates how profitable a company is relative to its total assets. The return on assets (ROA) ratio illustrates how well management is employing the company's total assets to make a profit. The higher the return, the more efficient management is in utilizing its asset base. Here the ROA is 1.507 which is very stable and reflects that company is in good position.
CVS Caremark
This ratio indicates how profitable a company is relative to its total assets. The return on assets (ROA) ratio illustrates how well management is employing the company's total assets to make a profit. The higher the return, the more efficient management is in utilizing its asset base. Here the ROA is 0.536 which is very unstable condition as far as return on assets is concerned.
5.0845
12
Kroger Co
This ratio is a rough measure of the productivity of a company's fixed assets (property, plant and equipment) with respect to generating sales. The higher the yearly turnover rate, the better is for the company. Here the FAT is relatively better for the company.
CVS Caremark This ratio is a rough measure of the productivity of a company's fixed assets (property, plant and
equipment) with respect to generating sales. The higher the yearly turnover rate, the better is for the company. Here the FAT is very good for the company.
0.0136
0.03231
Kroger Co
Often referred to simply as a company's profit margin, It is the most often mentioned when discussing a company's profitability. Higher profit margin reflects good profitable position of the company. In this case the profit margin is very low which shows the lower profitable position of the company.
CVS Caremark
Often referred to simply as a company's profit margin, it is the most often mentioned when discussing a company's profitability, Higher profit margin reflects good profitable position of the company. In this case the profit margin is very low which shows the lower profitable position of the company.
13
9. Return on Stock holders Equity= Net Income/ Total Stock holders Equity
0.0465
Kroger Co
This ratio indicates how profitable a company is by comparing its net income to its average shareholders' equity. The return on equity ratio (ROE) measures how much the shareholders earned for their investment in the company. The higher the ratio percentage, the more efficient management is in utilizing its equity base and the better return is to investors. Here the ROE is normal and represents a stable position.
CVS Caremark
This ratio indicates how profitable a company is by comparing its net income to its average shareholders' equity. The return on equity ratio (ROE) measures how much the shareholders earned for their investment in the company. The higher the ratio percentage, the more efficient management is in utilizing its equity base and the better return is to investors. Here the ROE is low.
10. Operating profit margin= Earnings before Interest and Taxes ( EBIT )/Sales
Indicator Operating Profit Margin Formula Earnings before Interest and taxes/Sales Kroger Co Millions us($) 2,181.9/82,049.5 CVS Caremaker Millions us($) 6,330,000/107,100,000
0.0265
0.05910
Kroger Co
Operating margin or operating profit margin measures what proportion of a company's revenue is left over, after deducting direct costs and overhead and before taxes and other indirect costs such
14
as interest. A high or increasing operating margin is preferred because if the operating margin is increasing, the company is earning more per dollar of sales. In this case the Operating profit margin is very low and it is not good for company.
CVS Caremark
Operating margin or operating profit margin measures what proportion of a company's revenue is left over, after deducting direct costs and overhead and before taxes and other indirect costs such as interest. A high or increasing operating margin is preferred because if the operating margin is increasing, the company is earning more per dollar of sales. In this case the Operating profit margin is very low and it is not good for company.
Financial Metrics
Strategic Objectives & strategic questions The extent to which a firm can meet its short term obligations. To meet short term obligations without relying upon sales of its inventories. Measures company's financial risk that how much of the assets have been financed by debt. How the firm is selling its inventories as compared to industry average. Earnings available to the owners of common stock. After tax Profits. Sales productivity and plant and equipment utilization. After Tax profit per Euro of sales. After tax investment of Stock holders in the firm. Profitability without concern for taxes and interest.
Outcome Measure/Indicators
1.2908
CVS Caremark
Current ratio
1.555
Quick Ratio
.2727
.6926
Total Debt
.7746
.4099
Inventory turnover
20.97
10.66
Earnings per share Return on Assets Fixed Assets Turnover Net Profit Margin Return on Stock holder Equity Operating Profit Margin
15
Strategic Objectives & strategic questions It measures the rate of employees living in the organization and being replaced by new employees It measures the revenue that is generated by an employee on monthly basis. It measures total training cost incurred for one employee training. It measures the total no of employ with all assets It measures the total cost of benefits provided to each employee working in the organization. Measures income per employ Determine whether the company has absenteeism problem It helps in knowing costs and it gives opportunity for continuous improvement. It measures the employ per equity. It determines the cost that occurs on every hiring.
Kroger * 20 %
8218900000/338000
$ 2026/ month
$ 166/ month
$ 5000
$ 8000
5296000000/338000
$15668.6
75 days
Cost of benefits
$ 975
$1550
1133000000/338000 *
Total HR cost
$ 10980
$ 1614
5296000000/338000 *
$15668639 $ 195
6.5 % $ 315
16
17
Marketing Ratios
Strategic Objectives & strategic questions Tells you the percentage return you have made over a specified period as a result of investing in training programs. Tells about Customer acquisition *
Kroger
14.2 %
4 per month
Shadowing calculates a shadow price for the variable rather than relying solely on market price, which is how the value of economic variables tends to be measured The cost of an alternative that must be Opportunity forgone in order to pursue a certain Cost action. Put another way, the benefits you could have received by taking an alternative action. The rate at which one good must be Marginal sacrificed in order to produce a single Rate Of extra unit (or marginal unit) of another Transformati good, assuming that both goods require on the same scarce inputs The average amount spent by a Average order customer per order. Many companies size have goals of increasing average order size through marketing. How frequently do customers Attrition or terminate the relationship by opting churn out, stop purchasing or choose a competitor. It is showing no item purchase by Item purchase single employ in one month by employ % of neglected opportunities % of dormant customers Percentage of opportunities that were neglected i.e. where no follow-up and/or contact has been made for a certain period. Percentage of customers not using the product or service.
$45
$125
$140
25x
30x
16.1
23
26
24
120/month
134/mo nth 11
21
23
35
18
19
90%
75%
1252 units
1000 units
Inventory Turns
38 days
26 days
* *
1% 2hrs
2% 1hrs
98%
90%
20
Scrap value %
On time delivery and pickup [Load, stop and shipment] Inventory Accuracy
together. Scrap value as a percentage of production value. % of shipments which were delivered on time upon the total number of goods..shipments Accuracy of the book inventory versus the counted inventory.
12%
15.8%
98%
91%
80%
92%
21
Balance Sheet
Currency in Millions of US Dollars
Revenues Total Revenues Cost Of Goods Sold Gross Profit Selling General & Admin Expenses, Total Depreciation & Amortization, Total Other Operating Expenses, Total Operating Income Interest Expense Net Interest Expense Ebt, Excluding Unusual Items Impairment Of Goodwill Other Unusual Items, Total Other Unusual Items Ebt, Including Unusual Items Income Tax Expense Minority Interest In Earnings Earnings From Continuing Operations Net Income Net Income To Common Including Extra Items Net Income To Common Excluding Extra Items As of: Jan 31 2009 Restated 76,148.0 76,148.0 58,012.0 18,136.0 14,215.0 1,443.0 15,658.0 2,478.0 -485.0 -485.0 1,993.0 --26.0 -1,967.0 717.0 -1.0 1,250.0 1,249.0 1,242.0 1,242.0 Jan 30 2010 Restated 76,609.0 76,609.0 58,319.0 18,290.0 14,513.0 1,525.0 16,038.0 2,252.0 -502.0 -502.0 1,750.0 -1,113.0 -48.0 -589.0 532.0 13.0 57.0 70.0 69.0 69.0 Jan 29 2011 Reclassified 82,049.0 82,049.0 63,270.0 18,779.0 14,954.0 1,600.0 16,554.0 2,225.0 -448.0 -448.0 1,777.0 -18.0 -25.0 -1,734.0 601.0 -17.0 1,133.0 1,116.0 1,109.0 1,109.0 Jan 28 2012 90,374.0 90,374.0 70,962.0 19,412.0 15,506.0 1,638.0 17,144.0 2,268.0 -435.0 -435.0 1,833.0 --990.0 -953.0 843.0 247.0 6.0 596.0 602.0 598.0 598.0
22
Income Statement
As of:
Jan 28 2012
263.0 263.0 944.0 944.0 4,905.0 209.0 931.0 7,252.0 23,900.0 -10,739.0 13,161.0 2,271.0 -573.0 23,257.0
424.0 424.0 909.0 909.0 4,935.0 261.0 954.0 7,483.0 25,673.0 -11,744.0 13,929.0 1,158.0 26.0 530.0 23,126.0
825.0 825.0 845.0 845.0 4,966.0 319.0 666.0 7,621.0 26,716.0 -12,569.0 14,147.0 1,140.0 45.0 552.0 23,505.0
188.0 188.0 949.0 949.0 5,114.0 288.0 786.0 7,325.0 28,071.0 -13,607.0 14,464.0 1,138.0 25.0 524.0 23,476.0
liabilities & equity Accounts Payable Accrued Expenses Current Portion Of Long-Term Debt/Capital Lease 3,822.0 845.0 558.0 3,890.0 995.0 579.0 4,227.0 1,096.0 588.0 4,329.0 1,280.0 1,315.0
23
Current Portion Of Capital Lease Obligations Other Current Liabilities, Total Total Current Liabilities Long-Term Debt Capital Leases Minority Interest Pension & Other Post-Retirement Benefits Deferred Tax Liability Non-Current Other Non-Current Liabilities Total Liabilities Common Stock Additional Paid In Capital Retained Earnings Treasury Stock Comprehensive Income And Other Total Common Equity Total Equity Total Liabilities And Equity
30.0 2,060.0 7,646.0 7,114.0 391.0 95.0 1,174.0 384.0 1,248.0 17,957.0 955.0 3,266.0 7,518.0 -6,039.0 -495.0 5,205.0 5,300.0 23,257.0
30.0 1,909.0 7,727.0 7,084.0 393.0 74.0 1,082.0 568.0 1,346.0 18,200.0 958.0 3,361.0 7,364.0 -6,238.0 -593.0 4,852.0 4,926.0 23,126.0
39.0 1,939.0 8,070.0 6,942.0 362.0 2.0 946.0 750.0 1,137.0 18,207.0 959.0 3,394.0 8,225.0 -6,732.0 -550.0 5,296.0 5,298.0 23,505.0
40.0 1,991.0 9,105.0 6,533.0 358.0 -15.0 1,393.0 647.0 1,474.0 19,510.0 959.0 3,427.0 8,571.0 -8,132.0 -844.0 3,981.0 3,966.0 23,476.0
24
Bibliography
www.google.com www.kpilibrary.com
http://investing.money.msn.com/investments/stock-balance-sheet/?stmtView=Qtr&symbol=KR http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=KR:US&dat aset=incomeStatement&period=A¤cy=native
25