task profitability ratios case 8-4

Project Description:

1) complete case 8-4 in the gibson text using excel. (label all work.)
2) apa format is not required, but solid academic writing is expected.

case 8-4 certified organic
whole foods market, inc. included these statements in its 2010 annual report.*
whole foods market, inc.
consolidated balance sheets
(in thousands)
september 26, 2010 and september 27, 2009
assets 2010 2009
current assets:
cash and cash equivalents $ 131,996 $ 430,130
short-term investments – available-for-sale securities 329,738 —
restricted cash 86,802 71,023
accounts receivable 133,346 104,731
*“whole foods market is the world’s leading natural and organic foods supermarket and america’s first national
“certified organic” grocer.” 10-k
source: whole foods market, inc. 2010 10-k
assets 2010 2009
merchandise inventories $ 323,487 $ 310,602
prepaid expenses and other current assets 54,686 51,137
deferred income taxes 101,464 87,757
total current assets 1,161,519 1,055,380
**property and equipment, net of accumulated
depreciation and amortization 1,886,130 1,897,853
long-term investments – available-for-sale securities 96,146 —
goodwill 665,224 658,254
intangible assets, net of accumulated amortization 69,064 73,035
deferred income taxes 99,156 91,000
other assets 9,301 7,866
total assets $3,986,540 $3,783,388

liabilities and shareholders equity
current liabilities:
current installments of long-term debt and capital
lease obligations $ 410 $ 389
accounts payable 213,212 189,597
accrued payroll, bonus and other benefits due team
members 244,427 207,983
dividends payable — 8,217
other current liabilities 289,823 277,838
total current liabilities 747,872 684,024
long-term debt and capital lease obligations, less
current installments 508,288 738,848
deferred lease liabilities 294,291 250,326
other long-term liabilities 62,831 69,262
total liabilities 1,613,282 1,742,460
series a redeemable preferred stock, $0.10 par value,
425 shares authorized; zero and 425 shares issued
and outstanding at 2010 and 2009, respectively — 413,052
shareholders’ equity:
common stock, no par value, 300,000 shares
authorized; 172,033 and 140,542 shares issued and
outstanding at 2010 and 2009, respectively 1,773,897 1,283,028
accumulated other comprehensive income (loss) 791 (13,367)
retained earnings 598,570 358,215
total shareholders’ equity 2,373,258 1,627,876
commitments and contingencies
total liabilities and shareholders’ equity $3,986,540 $3,783,388
**property and equipment include construction in progress and equipment not yet in service (2010 – $120,845;
2009 – $130,068)

whole foods market, inc.
consolidated statements of operations
(in thousands, except per share amounts)
fiscal years ended september 26, 2010, september 27, 2009 and september 28, 2008
2010 2009 2008
sales $9,005,794 $8,031,620 $7,953,912
cost of goods sold and occupancy costs 5,870,393 5,277,310 5,247,207
gross profit 3,135,401 2,754,310 2,706,705
direct store expenses 2,375,716 2,145,809 2,107,940
general and administrative expenses 272,449 243,749 270,428
pre-opening expenses 38,044 49,218 55,554
relocation, store closure and lease termination costs 11,217 31,185 36,545
operating income 437,975 284,349 236,238
interest expense (33,048) (36,856) (36,416)
2010 2009 2008
investment and other income $ 6,854 $ 3,449 $ 6,697
income before income taxes 411,781 250,942 206,519
provision for income taxes 165,948 104,138 91,995
net income 245,833 146,804 114,524
preferred stock dividends 5,478 28,050 —
income available to common shareholders $ 240,355 $ 118,754 $ 114,524
basic earnings per share $ 1.45 $ 0.85 $ 0.82
weighted average shares outstanding 166,244 140,414 139,886
diluted earnings per share $ 1.43 $ 0.85 $ 0.82
weighted average shares outstanding, diluted basis 171,710 140,414 140,011
dividends declared per common share $ — $ — $ 0.60
required

a. compute the following for 2010 and 2009:
1. net profit margin
2. total asset turnover (use year-end assets)
3. return on assets (use year-end assets)
4. operating income margin
5. return on operating assets (use year-end assets)
6. sales to fixed assets (use year-end fixed assets)
7. return on investment (use year-end balance sheet accounts)
8. return on total equity (use year-end equity)
9. gross profit margin
b. comment on the trends in (a).
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