Reference no: EM131346567
Despite increasing revenues over the past three years Whole Foods Market (WFM) has experienced disappointing profits during the same interval. While WFM’s overall revenues increased by approximately 8% in 2015, and by 10% in 2014, its net income (profit) declined by about 7% in 2015 and increased by only 5% in 2014, indicating higher costs of operating their businesses. The size of the WFM balance sheet stayed relatively stable; however, the WFM common stock experienced very high volatility and posted a devastating loss to its value from a high of $65/share in October 2013 to about $30/share in December 2015. This performance was more distressing to investors as the S&P 500 index experienced gains during the same interval. The decision to open the lower-cost 365 supermarkets has been made against this financial background, in addition to other concerns relating to the long-term healthiness and growth of its core upscale supermarket business.
Please answer the questions below. Use either the Bloomberg terminals located at the School of Business or other reputable sources such as finance.yahoo.com, morningstar.com or Wall Street Journal etc. for the financial data you use in your answers. The screen prints of the financial data you use to support your answers should be submitted as an appendix attached to your term paper.
Questions:
Calculate the annualized stock price return of WFM over the last 3,5, and 10years.
How does it compare to the return of the competitors you selected in question 3 and the S&P 500 index over the same time periods?
What kind of steps can be taken regarding management strategy, operational efficiency and marketing policy to improve the disappointing performance of this company going forward?
Describe how the decisions made by management, marketing and operations functions of the company can impact, and hopefully improve, these financial ratios.
|
Determine what drives the airline operating costs
: Colorado Airlines is operating at full capacity on its Denver to New York route, offering three flights each day on this route, using Boeing 737’s, each with a capacity of 120 passengers. To ascertain the least expensive way to increase passenger cap..
|
|
Gains in terms of yield rates depending on the bond
: Suppose that the Johnson family has the option of purchasing two bonds. • Bond A is a $4000 10% 10 year bond paying annual coupons with redemption value $2000, which can be purchased at a premium for $3000. This bond can optionally be sold at the end..
|
|
Publisher put into advertising and still break even
: The world-famous discounter, Fernwood Booksellers, specializes in selling paperbacks for $7 each. The variable cost per book is $5. At current annual sales of 200,000 books, the publisher is just breaking even. It is estimated that if the authors' ro..
|
|
Projected capital budget-residual dividend policy
: Brammer Corp.'s projected capital budget is $1,000,000, its target capital structure is 60% debt and 40% equity, and its forecasted net income is $550,000. If the company follows a residual dividend policy, what total dividends, if any, will it pay o..
|
|
Calculate the annualized stock price return of WFM
: Despite increasing revenues over the past three years Whole Foods Market (WFM) has experienced disappointing profits during the same interval. While WFM’s overall revenues increased by approximately 8% in 2015, Calculate the annualized stock price re..
|
|
The company follows residual dividend policy
: Brooks Corp.'s projected capital budget is $2,000,000, its target capital structure is 60% debt and 40% equity, and its forecasted net income is $600,000. If the company follows a residual dividend policy, what total dividends, if any, will it pay ou..
|
|
How many new shares should be given per one old share
: Keys Financial has done extremely well in recent years, and its stock now sells for $175 per share. Management wants to get the price down to a more typical level, which it thinks is $25 per share. What stock split would be required to get to this pr..
|
|
Total market value was unchanged by the split
: Becker Financial recently completed a 7-for-2 stock split. Prior to the split, its stock sold for $90 per share. If the total market value was unchanged by the split, what was the price of the stock following the split?
|