BUSI 562 CC Sabine McGarrigan Nordstrom Inc Financial Ratios Discussion

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Business Finance

BUSI 562

Columbia College

BUSI

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Pleaserespond to these two discussion by these two seperate individuals. One paragraph each is suitable.

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1st Discussion Discussion by: Nordsstrom Sabine McGarrigan Nordstrom 1. Current Ratio = current assets / current liabilities = $3,230B / $3,520B = 0.92 (p. 39) 2. Average Sale Period = 365 days / Inventory Turnover = 365 / 4.79 = 76.20 (p. 25) 3. Debt-to-Equity Ratio = Total Liabilities / Stockholder’s Equity = $3,520B / $979M = 3.60 (p. 39) 4. Net Profit Margin = Net Income / Sales = $496M / $15,132B = 3.3% (p. 22) 5. Dividend Yield Ratio = Dividend Per Share / Market Price Per Share = $1.48 / $36.27 = 4.1% (p. 40) 2019 Form 10-K: https://press.nordstrom.com/static-files/b1e371e3-413040c3-8c84-b537c167a575 Reply to Thread 2nd Discussion by: Netflix Ouita Bryant I decided to use Netflix – though I will admit I was disappointed that their website did not list the annual report for 2020 (because I wanted to see the increase due to Covid19). These numbers are for the year ending 2019 and are in “thousands”. Current Ratio = Current assets ÷ Current liabilities $33,975,712 ÷ $7,747,884 = 4.39% (page 20) Average Sale Period = (Accounts receivables ÷ Total net sale) × 365 days ($454,399 ÷ $20,156,447) × 365 = 8.21 days (page 56) Netflix doesn’t have an accounts receivable per se, their annual report lists this as “Trade receivables” and states: “Trade Receivables consist primarily of amounts related to members and payment partners that collect membership fees on the Company's behalf. T.” (Netflix, 2020) Based on this, I used the trade receivables number listed on page 56 for accounts receivable. Debt-to-Equity Ratio: Total liabilities ÷ Shareholders Equity $26,393,555 ÷ $7,582,157 = 3.48 (page 46 and page 20) Net Profit Margin Percentage = net income ÷ sales $586,970 ÷ 20,156,447 = 2.91% (page 65 and 43) Dividend Yield Ratio = Dividend per share ÷ market price per share Although Netflix has stock listed “Weighted-average fair value (per share)” 156.60 per share in this 2019 report, it states the following on page 63 “The Company does not anticipate paying any cash dividends in the foreseeable future and therefore uses an expected dividend yield of zero” (Netflix, 2019) I still think it will be interesting to see the 2020 report, but here are the revenues for 2017 – 2019. I would like to mention (as a Netflix subscriber) that I think the increased revenue is largely as a result of increased monthly premiums instead of a dramatic increase in customers. 2019 with $20,156,447 2018 with $15,794,341 2017 with $11,692,713 https://s22.q4cdn.com/959853165/files/doc_financials/2019/ar/2019-10-K.pdf
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Discussion Post 1: NORDSTROM, INC. by Sabine McGarrigan
I concur with McGarrigan’s computation of the financial ratios. However, much is
desired as to the ratios' implication to the financial position of NORDSTROM, INC. The stud...


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