JCPenney

Topics: Stock market, Stock, Financial ratios Pages: 2 (247 words) Published: November 30, 2014


FNBK 3000

JCPenney

Input Data Table

Income Statement

Year 5
Year 4
Year 3
Sales

$18,424
$17,786
$17,633
Net income (loss)

$524
$(928)
$405
Gross interest expense

$279
$271
$245
Preferred Dividend

$12
$25
$27
Tax rate

35%
35%
35%
Balance Sheet

Total Assets

$14,127
$18,300
$17,787
Total Debt

$9,271
$12,875
$11,417
Preffered Stock

$-
$304
$333
Total Common

$-
$-

Shareholders' Equity

$4,856
$5,121
$6,037

a) Disaggregation of ROA

Year 5
Year 4
Year 3

Profit margin for ROA

3.83%
-4.23%
3.20%

Total Asset Turnover

113.63%
98.57%
98.41%

ROA
4.35%
-4.17%
3.15%

b) Disaggregation of ROCE (%)

Profit Margin for ROCE

2.78%
-5.36%
2.14%

Total Asset Turnover

113.63%
98.57%
98.41%

Capital Structure Leverage

325.02%
323.42%
303.61%

ROCE
10.26%
-17.08%
6.41%

c) Reasons for change in ROCE over the three years:

The reasons for a change in ROCE are (1) an increase in interest expense, (2) an increase in debt,

(3) a decrease in total assets, (4) a change from a net loss to net income,

(5 )an increase in sales, and (6) the issuing of preferred stock.

d) Compute the ratio of ROCE to ROA for each year

Year 5
Year 4
Year 3

235.92%
409.95%
203.39%

e) Calculate net income to common stockholders from financial leverage

Creditors' Capital

ROA

4.35%
-4.17%
3.15%

After-Tax Cost of Debt

$0.0164
$0.0145...
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