What do the company’s profitability measures disclose about the company’s performance and how well its strategy was working between 2011 and 2012? Explain your answer.
Book: Gamble, John E., Peteraf, Margaret A, and Arthur A Thompson 2013. Essentials of Strategic Management: The Quest for Competitive Advantage, 4th Edition, New York, NY: McGraw-Hill. ISBN 978-0-07-811289-8
Using the formulas in the appendix of the text on pages 240–241 and the data in Macy’s financial statement (found on pages 88-89), calculate the following measures of financial performance:
a. Gross profit margin
b. Operating profit margin
c. Net profit margin
d. Times interest earned coverage
e. Return on shareholders’ equity
f. Return on assets
g. Debt-to-equity ratio
h. Days of inventory
i. Inventory turnover ratio
j. Average collection period