Financial Project-Part 1

Topics: Generally Accepted Accounting Principles, Balance sheet, Financial statements Pages: 14 (4618 words) Published: February 1, 2011
JCPenney & Macy’s
Financial Statements and Accounting Policies Project
ACTG 4610 - 103
YI-CHI LIN
10/19/2010

Table of Contents
INDEX
Page
Part I
Item 1. Introduction 3
Item 2 Balance Sheet 4 Item 3 Income Statement 5 Item 4. Statement of Cash Flows 6

Item 5 Audit Report 8 Item 6. Revenue Recognition and Matching Principles 8 Item 7 Ratio Analysis 9 Item 8. Conclusion 10

Part I
Item 1. Introduction
Business Overview – J. C. Penney
J. C. Penney Company, Inc. is a holding company whose principal operating subsidiary is J. C. Penney corporation, Inc. (JCP). JCP was incorporated in Delaware in 1924, and J. C. Penney Company, Inc. was incorporated in Delaware in 2002, when the holding company structure was implemented. The new holding company assumed the name J. C. Penney Company, Inc. (Company). The holding company has no independent assets or operations, and no direct subsidiaries other than JCP. Common stock of the Company is publicly traded under the symbol “JCP” on the New York Stock Exchange. The Company is a co-obligor regarding the payment of principal and interest on JCP’s outstanding debt securities. The guarantee by the Company of certain of JCP’s outstanding debt securities is full and unconditional. The Company is a retailer, operating 1,108 J. C. Penney department stores in 49 states and Puerto Rico as of January 30, 2010. Its business consists of selling merchandise and services to consumers through its department stores and Direct (Internet/catalog) channels. Department stores and Direct generally serve the same type of customers and provide virtually the same mix of merchandise, and department stores accept returns from sales made in stores, via the Internet and through catalogs. J. C. Penney sells family apparel and footwear, accessories, fine and fashion jewelry, beauty products through Sephora inside J. C. Penney and home furnishings. In addition, its department stores provide with services, such as styling salon, optical, portrait photography and custom decorating. The business of marketing merchandise and services is highly competitive. J. C. Penney is one of the largest department store, catalog and e-commerce retailers in the United States, and it has numerous competitors, such as Kohl’s, Macy’s, and Sears. Today, I will do some financial analysis between J. C. Penney and Macy’s. In this analysis I am using the balance sheet, income statement and the statement of cash flows given in the annual report for the year ended 2007, 2008 and 2009. Business Overview – Macy’s

Macy’s, Inc. is a department store holding company and owner of Macy’s and Bloomingdale’s department stores. Macy’s Inc.’s stores specialize mostly in retail clothing, jewelry, watches, dinnerware, and furniture. Macy’s Inc. is headquartered in Cincinnati, Ohio and operates just over 850 stores in the United States. The company’s Macy’s locations and related operations account for 90 percent of the company’s revenue, while luxury-oriented Bloomingdale’s stores and associated ventures represent the balance of the company’s business. Macy’s Inc. was founded as Federated Department Stores in 1929 in Columbus, Ohio. To support its huge retail operations, Federated centralized its back-office functions into several large divisions, covering financial services, marketing, merchandising, logistics, and data processing systems. In 1990, Federated went bankrupt after its hostile takeover of Allied Stores. Federated then took over Macy’s in 1994 while that company was still emerging from its own...
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