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Brooks Competition JC Penney - PowerPoint PPT Presentation


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Brooks Competition JC Penney. Team #4: Xin Zhang Keat Ian Yeoh Jenn Yang Lee. Recommendations. Purchase JC Penney stocks. Capital Budgeting. Assumptions. Ratios Depreciation Inflation rate Sales growth rate. Capital Budgeting. Operating cash flow. Net working capital

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Presentation Transcript
slide1

Brooks Competition

JC Penney

Team #4:

Xin Zhang

Keat Ian Yeoh

Jenn Yang Lee

recommendations
Recommendations
  • Purchase JC Penney stocks
capital budgeting
Capital Budgeting

Assumptions

  • Ratios
  • Depreciation
  • Inflation rate
  • Sales growth rate
capital budgeting1
Capital Budgeting
  • Operating cash flow
  • Net working capital
  • Net capital spending
capital budgeting2
Capital Budgeting

Sensitivity analysis

  • Net working capital
  • Variable cost ratio
capital budgeting3
Capital Budgeting
  • NPV=$23,224

Conclusion

swot analysis
SWOT Analysis

External factors

Opportunities

younger population in America is growing into young adults and teenagers.

Unemployment rate has been decreasing since 2009.

slide12

Threats

Competitors seem to outperform JCP in all the financial ratio conducted

Kohl’s is the only other competitor who owns slightly more stores than JCP

slide13

Internal Factors

Strength

The number of stores JCP owns

Prototype store in Texas that recorded a sales per gross square foot of six hundred dollars

slide14

Weakness

Currently unable to generate enough sales

conclusion
Conclusion

Although JCP has not been generating enough profit for the last three years, we think that is largely due to the change in management and remodeling project. Therefore, we suggest a “Buy” position on JCP.