The Great Atlantic & Pacific tea Company, Inc. (A&P) suffered from continued loss on the net income from 2000 to 2003, which caused a general concern on its high risk of bankruptcy. However, conflicting with analysts estimation, the familys tercet-quarter financial results surprisingly exceeded their expectation, and stock price move 23% to $9.28 per share on six times middling daily trading volume. Our objective is to dig out more(prenominal) information from A&Ps financial reports and let suitable recommendations to investors/analyst/debt holder through further analyzing its profession strategy and financial ratios by the end of 2003.
2.Frame & Analysis
As of January 2004, A&P operated approximately 643 stores in 11 states, binding various areas in food market. The supermarket business was highly warlike in terms of low profit margins on sales, and A&P had to compete on increasing volume of sales and store locations to maximize its profits. In addition, A&P was too challenged by other supermarkets, such as Wal-Mart that expanded cursorily in large scale.
In the third quarter of 2003, A&Ps reported results that demonstrated improvement compared with the third quarter of fiscal 2002. Sales at the end of November 2003 change magnitude by 4.9% compared with sales ended November 2002.
In addition, the companys gross margin increased, opus store operating, general and administrative expense slightly increased. In 2003, the company divested multiple assets, merchandising nine supermarkets in northern New England and Wisconsin. It further divested eight Oclock coffee division, totally generating $255.5 million proceeds.
A&P is currently in the stage of maturity, intending to decline. From the financial statements, A&Ps revenue was stable around $10.43 billion, while net incomes were volatile (most in negative) from 1994 to 2003. During the period from 1994 to 2003, cash flows from trading operations were decreasing to negative in 2003. Cash flows from...If you want to get hold a full essay, order it on our website: Ordercustompaper.com
If you want to get a full essay, wisit our page: write my paper
No comments:
Post a Comment