Question

In: Accounting

Risk Assesment Project 2.Fill in industry comparisons for Macy in the Excel Spreadsheet. Compute missing financial...

Risk Assesment Project 2.Fill in industry comparisons for Macy in the Excel Spreadsheet. Compute missing financial

statement ratios for Macy and describe Macy’s profitability, efficiency, liquidity.

Solutions

Expert Solution

Profitability.
In case of profitability Macy's Inc had outperformed the industrial standards. When the industrial average ROE is just 10.10%, the ROE of Macy's is 18.30%, which indicates that investors are getting high return compared to industry.
Efficiency.
The company is less efficient with regards to asset turnover and receivable turnover. It is highly disappointing that Macy's efficiency is almost half the industrial standard.
Liquidity.
Though Current ratio seems to be lower when compared with industry, the quick ratio and cash ratio are higher, which depicts that the company is maintain sufficient liquidity with them.

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