1. Refer to the Annual Report and the summaries created for Worksheet E. Create a chart summarizing the following factors for the past three years. Answer the following questions:
- Comparing revenues, profits, and expenses, list the factors driving year-over-year changes (e.g., increase in sales, decline in sales, disproportionate rise/reduction in facilities costs, disproportionate increase/reduction in cost of goods sold, one-time charges or events).
- Have operating expenses been managed in proportion to growth or declines in revenue over the past five years?
- Review the management statement(s) for each of the three major financial statements in the Annual Report. List three reasons provided by the firm–either one-time or continuing—that explain the performance of the business in the most recent three years.
- Review the Supporting Schedules in the Annual Report. Calculate the following financial ratios for 2012:
- Liquidity ratio
- Debt ratio
- Earnings per share
- Review pages 17–23 in JCPenney’s report. Review the Market for Registrant’s Common Equity, Five-Year Total Stockholder Return Comparison, Five Year Financial Summary, Five Year Operations Summary, and Adjusted Operating Income/(Loss). Considering your review of the key financial statements and the accompanying management statements in the Annual Report, summarize the two or three main issues facing the company and the areas of management focus you recommend for the company in the short term.