Nordstrom Financial Statement Analysis - 3814 Words

NORDSTROM (JWN) I. Nordstrom’s overview Nordstrom is classified as an Upscale Independent Department Store Chain and is noted as one of the largest department stores of its type. Nordstrom is founded in 1901 by two partners, John W. Nordstrom and Carl F. Wallin. It’s headquarter is in Seattle, Washington area. Nordstrom carries a wide variety of merchandise and specialty goods, which includes apparel, shoes, jewelry, cosmetics, fragrances, handbags, accessories, and in some locations, home furnishings. Nordstrom is dealing with competition on many different levels. It is competing with higher end stores such as Neiman Marcus and Saks Fifth Avenue. In addition, it is also competing with second tier stores such as Macy’s, Dillard’s,†¦show more content†¦4. Having effective inventory management; efficient and proper allocation of capital resources; successful execution of information technology strategy; and effective cost control in advertising, marketing, and promotion campaigns. 5. Managin g debt levels to maintain an investment grade credit rating as well as operate with an efficient capital structure for its growth plans and industry II. Company financial ratio analysis: 1. Liquidity: Liquidity: | 2011 | 2010 | 2009 | 2008 | 2007 | Current Ratio | 2.16 | 2.57 | 2.01 | 2.01 | 2.06 | Cash Ratio | 0.73 | 0.80 | 0.39 | 0.04 | 0.22 | Cash Flow from Operations Ratio | 0.46 | 0.63 | 0.62 | 0.53 | 0.19 | Overall regards to liquidity ratios, the higher the number the better; however, a too high also indicates that the firms were not using their resources to their full potential. Current ratio of 1.0 or greater shows that a company can pay its current liabilities with its current assets. JWN’s ratio increased from 2.06 in 2007 to 2.57 in 2010, and slightly decreased to 2.16 in 2011. JWN’s cash ratio increased significantly from 22% in 2007 to 80% in 2010. JWN has a cash ratio of 73% in 2011, which is useful to creditors when deciding how much debt they would be willing to extend to JWN. In addition, JWN also has moderate CFO ratio of 46%, indicating the companies’ ability to pay off their short term liabilities with their operating cashShow MoreRelatedFinancing Activities of Nordstrom and the Gap1385 Words   |  6 PagesFinancing Activities Analysis of The Gap, Inc. and Nordstrom, Inc. Financial Statement Analysis April 24, 2013 Introduction The Gap, Inc. and Nordstrom, Inc. are retail companies with similar aspirations, yet different business strategies. Both strive to be top competitors in the retail industry and have generated and maintained a steady customer demand for their products and services. Their journeys to competitiveness in this industry have been based on very different strategies, however. 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