Extra Credit Template a b c d e f g h i

Extra Credit Template
    
    a    The industry in which Kohl's and Dillard's engage focuses on products for the family, including clothing, accessories, footwear, home goods, and cosmetics. According to their SIC codes, these are department stores. Because so many businesses operate in the same market area and provide similar items, the industry is very competitive.
An economic downturn, replacement products, shifting consumer preferences, climatic conditions, inflation, and technology are a few of the key economic elements that have an impact on how businesses operate. Many department shops have closed their physical locations in favour of concentrating more on online offers and promotions as a result of the rise of online shopping.
Target, Costco, Walmart, J.C. Penney, Macy's, and Nordstrom are the key rivals in the sector. These businesses have a strong track record and impressive financial results. To the extent that Kohl's and Dillard's don't execute well, effectively, efficiently, and strategically, they risk losing investors and customers. Another significant issue is a technological evolution; if these businesses don't catch up with the most recent developments, they risk losing clients and operating slowly.
The business is expected to grow quickly, and there is a big market for department shops. The companies have a huge chance to increase their customer base & take advantage of internet retail. These businesses may now access a wide range of high-quality products at discounted prices and offer first-rate customer service through new platforms thanks to globalisation.
The two businesses are comparable since they operate in the same sector, offer the same goods, cater to the same clientele, and face the same rivals. However, they differ in terms of the scale of the business. Having 929 locations throughout 47 states, Kohl's is larger than Dillard's, which has 326 locations spread over 29 states.
    b    With an average gross profit margin of 36.15 percent for the years 2007, 2006, and 2005, Kohl's has maintained its gross profit margin. Due to a 6% increase in sales, there is an increase of 0.34 percent in 2007. This suggests that the business has kept its gross profit margin constant. Compared to Kohl's, Dillard has a lower average gross profit margin of 35.15 percent. The gross profit margin increased from 2005 to 2006 by 2.09 percent and decreased by 1.42 percent from 2006 to 2007. This decline in 2007 is the result of a 6% decline in revenue and a 5% decline in cost of sales. As a result, both companies' earnings are of high quality, but Kohl's earnings are more enduring since they have been sustained over time.
From 2005 to 2007, Dillard's operating expense margin increased, with a 4.41 percent jump from 2006 to 2007. While at Kohl's, the operating margin improved by 2.26 percent in 2007 after declining by 1.03 percent in 2006. The income statement for Dillard includes a few nonrecurring items. These include asset impairment, asset disposal, and store closing costs.
    c    Refer the next sheets
    d    ROE (using Direct Method)                Kohl        Dillard
        ROE                2007    2006    2007    2006
        Net Income                $1,083,851.00    $1,108,681.00    $53,761.00    $245,646.00
        Average Stockholders
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Equity                $5,852,499.00    $5,780,366.50    $2,546,950.00    $2,456,583.00
        ROE                18.52%    19.18%    2.11%    10.00%
        Five Componets of ROE
                        Kohl        Dillard
                        2007    2006    2007    2006
        Net Income                $1,083,851.00    $1,108,681.00    $53,761.00    $245,646.00
        EBT                $1,742,061.00    $1,774,445.00    $60,518.00    $253,842.00
        Net Income/EBT                0.62    0.62    0.89    0.97
        EBT                $1,742,061.00    $1,774,445.00    $60,518.00    $253,842.00
        EBIT                $1,804,477.00    $1,814,801.00    $152,074.00    $341,484.00
        EBT/EBIT                0.97    0.98    0.40    0.74
        EBIT                $1,804,477.00    $1,814,801.00    $152,074.00    $341,484.00
        Sales                $16,473,734.00    $15,596,910.00    $7,370,806.00    $7,810,067.00
        EBIT/Sales                0.11    0.12    0.02    0.04
        Sales                $16,473,734.00    $15,596,910.00    $7,370,806.00    $7,810,067.00
        AverageTotal Assets                $9,797,053.00    $9,093,759.00    $5,367,432.00    $5,453,245.00
        Sales/AverageTotal Assets                1.68    1.72    1.37    1.43
        AverageTotal Assets                $9,797,053.00    $9,093,759.00    $5,367,432.00    $5,453,245.00
        Average Stockholders
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Equity                $5,852,499.00    $5,780,366.50    $2,546,950.00    $2,456,583.00
        AverageTotal Assets/Average Stockholders
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Equity                1.67    1.57    2.11    2.22
        Multiplying all 5                18.52%    19.18%    2.11%    10.00%
    e . i    The ratio's first element shows how much of shareholders' pretax profits they keep. For Kohl's, this has remained the same in 2007 and 2006, while Dillard's had a 0.08 reduction from 2006 to 2007.
The second ratio shows how much of the company's operating profit it keeps after financing expenses. For Kohl's, this ratio dropped from 2006 to 2007, while for Dillard's, it dropped from 2006 to 2007. This suggests that their debt's net cost has marginally increased.
The operating profit realised on each unit of sales is shown in the third ratio. In 2007, this ratio dropped by 0.01 for Kohl's and by 0.02 for Dillard's, respectively. However, Kohl has a greater EBIT to Sales ratio than Dillard's.
The fourth ratio calculates how well assets are used overall. Dillard's ratio has decreased by 0.06, while Kohl's ratio has decreased by 0.04. The decline shows that both businesses are using their resources less effectively.
The final ratio shows how the business has financed its acquisition of assets. For Kohl's, this ratio...