美国Village和Fresh超市会计财务报表对比分析英文版.docx

美国Village和Fresh超市会计财务报表对比分析英文版.docx

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美国Village和Fresh超市会计财务报表对比分析英文版

BFIN/ACTG441

FinancialStatementAnalysis

Project#2

Ratioandcommon-sizeanalysis

VillageSuperMarket,Inc.

V.S.

FreshMarket,Inc.

By:

XiaoruLiu

02/21/2016

SummaryofCompanies:

BothVillageSuperMarketandTheFreshMarketaregroceryretailersthatareheavilyinvolvedintheircommunitiesandstrivetobringfreshfoodforallatareasonableprice.

Mycompany,VillageSuperMarket（VSM）,alsoknownasShopRite,isaretailgrocerystorethatstrivesforexcellence.VillageSuperMarketcurrentlyemployeesover6,700employees.Therearecurrently29ShopRitestoresoperatinginnorthern,centralandsouthernNewJersey,Pennsylvania,andMaryland.Theyareallownedandoperatedbyonefamily（AboutVillageSuperMarket,Inc.,2015）.Theirvisionistohelpfamilieslivebetterlives（AboutVillageSuperMarket,Inc.,2015）.Someoftheirproductsandservicesinclude,butarenotlimitedto;abakery,seafood,meatandpoultry,delianddairy,dailyhouseholditems,frozenfoods,freshproduce,bakingandcookingingredients,snacks,candy,organicproducts,pharmaceuticals,floralservices,theShopRiteBrand,alcoholicbeveragessuchaswineandbeer,cateringservices,beautyandhealthproducts,etc（VillageSuperMarket,Inc.WeeklyCircularCategories,2015）.

Competingcompany,theFreshMarket（FM）isalsoagoodgroceryretailer.WhatstartedinNorthCarolina,isnowspreadacross27statesandhasabout169stores（TheFreshMarket,Inc.AboutUs,2013）.FreshMarketemploysabout7,800employees.Someoftheirproductsanddepartmentsinclude;candy,deliandcheese,produce,groceryanddairy,bakingandsnackingingredients,preparedfoods,floralshop,gifts,seafood,healthandbeautyproducts,dailyhouseholditems,wineselectionsandtheirveryownFreshMarketBrandofproducts（TheFreshMarket,Inc.Departments,2013）.

AnswerstoQuestions

1.Whichofthetwocompaniesisthemoreliquid?

Isyourcompany’strendpositiveornegative?

TheVSMhasahighercurrentratioof1.413thanthe1.118ofFM.Withregardstoliquidity,Ifoundthatwhileneithercompanyhadmorethanonedollarofcashtocovereachdollarofdebt,VSMisverynearthatmarkat0.937,whileFMiscurrentlyat0.608.Thistellsusthatwhileneithercompanyhavelargeenoughdebtratiostoaccountforbeingindebtduetoleveragingexpansionandgrowth,theyarebothstillstrugglingtoreachthemarkofbeingabletopayforwhattheyowe.Essentially,somethingisdefinitelyholdingbothcompaniesback,especiallyFM,frombeingabletogrowandbecomelucrative.Furtheringthisideaiseachcompany’scashratio.WhileVSMisat0.614,FMiscurrentlyat0.403,displayingthateachcompanyhastherespectiveproportionofcashorcashequivalentsinvestedincurrentassetstocovercurrentliabilities.VillageSuperMarketisperformingconsiderablymoreliquidthantheFreshMarket.Differentwithnormalcompanies,thosetwomarketshasagratecashflow.Althoughthisratioofmycompanychanges,Ithinkmycompanygetsbetternow.

2.Whichofthetwocompaniesismoreleveraged?

Isyourcompany’strendpositiveornegative?

TheleverageratiosIfoundtobeparticularlyhelpfulinthisscenarioincludednotonlythedebtandtimesinterestearnedratios,butalsothedebttoequityandcashcoverageratios.ThedebtratiointhiscaseVSMonlyhas0.222oftheirassetsfinancedbydebt,whileFMhas0.388oftheirassetsfinancedbydebt.Thissituationcanbeviewedfromacoupledifferentstances:

first,thenegativestanceonFMthattheyareatagreaterfinancialriskbeingatcloseto40%oftheirassetsbeingfinancedbydebt;yet,ontheotherhand,youcouldalsosaythatVSMisnottakingenoughriskandinvestingintheirowngrowth.Now,IcannotsaywithanycertaintythatVSMisnotusingtheirownmoney,whetheritbecashorretainedearningsthathavebeenreinvested,tofinancetheirownlongtermassets.AllIcansay,isthatFMisusingclosetodoubletheamountofdebttoinvestintheirgrowth.Whiledebtratiostendtovarywidelyacrossdifferentindustries,thegrocerysectortendstobearound64.05%（TheStreet.GettingDowntoTheFundamentals,2001）.Themoreimportantratioinreferencetothegrocerysectoristhedebttoequityratio.VSMhasadebttoequityratioof0.380,whileFMhasaratioof0.635.Comparedtotheretailindustryaverageof0.80,I’msurethatVSMandFMbothfallquiteshort.Also,mycompanyisgood,ButIdothinksthisonecanbehigher.

3.Whichofthetwocompaniesismoreprofitable?

Isyourcompany’strendpositiveornegative?

Astotheprofitabilityabilities,here,FMreallystandoutoverVSM;inboththegrossprofitmarginaswellastheoperatingprofitmargintheyleadwithratiosof0.339and0.059,respectively,whileVSMisonlyat0.273and0.027.ThereturnsonequityofFMisalsohigher.Althoughthereisasubstantialdifferenceinratiosforthesetwocompanies,takingintoaccountthefactthattheyarebothgrocerystores,consideringhowsmallthemarginisonaportionoftheirproducts.Andmycompanyalsochangesatthispart,whichmakesmedon’tknowifit’spositiveornot.

4.Whichofthetwocompaniesismoreefficient?

Isyourcompany’strendpositiveornegative?

Uponinitialobservation,wecanseethatVSMandFMhaveverysimilarassetturnoverratiosof3.650and3.262,whichistobeexpected.Thereasonthisisnotahugesurpriseisthatthesecompaniesdonotnecessarilycompeteinthisarea,astheyarebothsupermarkets,theonlylongtermassetstheymayhavewouldbeforkliftstomaneuverstockandinventory,possiblyscannersandothertechnologiesusedatPOSorforinventorymanagement,andetc.,noneofwhichwouldbedecidingfactorsinhowwellthecompanyitselfisdoing.However,whenwelookatinventoryturnover,thingsbegintoclearup.InventoryturnoverdatameansthatVSMsellsitsproductsatafaster,moreefficientrate.TheinventoryturnoverrateforVSMandFMare25.139and16.795,respectively.Thistellsusthateachcompanyturnstheirinventoryoverthatmanytimesperyear.VSMdobetterinthispart.Also,aloweraccountsreceivableandaccountspayableindicatethatthiscompanyisefficientandlowrisk.FMdobetteratthispartexpectof2011,makesithaveamorereliablecashflow.Butbothofthemarereallylow,andmycompanyispositiveatthispart

5.Whichofthetwocompanieshasthegreaterabilitytorepayitsdebtontime?

UsethedatashowninQuestion2,wecanfindthatbothofthesecompanieshaveagoodratiooninterestcoverageratio,andVSMhasabetterone,whichmeansVSMhasagreaterabilitytorepayitsdebtontime.

Ifailedtofindtheleasepaymentofthesetwomarketssoneglectthefixedchargecoverage.

6.WhatisthetrendinGrossProfitMarginandNetProfitMargin?

Thoseindexestrendtobesmaller,inmyopinion.Althoughthereisasubstantialdifferenceinratiosforthesetwocompanies,takingintoaccountthefactthattheyarebothgrocerystores,consideringhowsmallthemarginisonaportionoftheirproducts.SoIdothinkagoodwillandagoodservicemeansalotforacompanylikeVSMandFM.

Summary

Bothoftwocompaniesmadeagreatwork.Lookingatthesetwocompanies’financialperformance,acouplesubstantialdifferencesstillstandout.Theactivity,leverage,marketvalue,liquidity,andprofitabilityratiosshowthatVillageSuperMarketisrelativelyperformingconsiderablybetterthantheFreshMarket.

Bibliography

VillageSuperMarket,Inc.（2015）.RetrievedFeb./03/2016,from

VillageSuperMarket,Inc.Community（2015）.RetrievedFeb./03/2016,from

TheFreshMarket,Inc.（2013）.AboutUs.RetrievedFeb./03/2016,from

VillageSuperMarket,Inc.（2015）.WeeklyCircularCategories.RetrievedFeb./03/2016,from

TheFreshMarket,Inc.（2013）.Departments.RetrievedFeb./03/2016,from

HoustonChronicle.（2015）.FourBasicTypesofFinancialRatiosUsedtoMeasureaCompany'sPerformance.RetrievedFeb./03/2016,from

VillageSuperMarketAnnualReport.（2013）.RetrievedFeb./03/2016,from

TheStreet.（2001）.GettingDowntoTheFundamentals.RetrievedFeb./03/2016,from