Financial Statement

Feb.21, 2015

Just For Feet Case Summary

The operating strategy for Just For Feet is to build large store format in order to offer a larger selection of brand name athletic, to provide a high level of customer service, to create exciting shopping experience, to do more television and print advertising to attract customers, and to operate in-store warehousing and open more new stores. The advertising fee and the motivation to create high-energy shopping experience may be potential cost. But in-store warehousing and high quality customer service can be the benefits of the strategy. Since in-store warehousing can help the company save time in shipping goods, maintain deep inventory position in core styles so that more and more customers would come to buy athletic, the super store will not need to worry about shortage of goods. On the other hand, it can create more sales since the company has a dominant selection for customers. I want to monitor the inventory turnover closely. A low inventory turnover can be a bad sign because products tend to be deteriorate since they stayed in warehouse. In 1997, the inventory turnover is equal to cost of sales divided by merchandise inventories, we can get the inventory turnover is 1.36. And in 1998, the inventory turnover is 1.13, it decreased.

Based on the ROE and ROA of the company from 1997 to 1999, the performance of the company is improving. ROE in 1999 is 8.98%, greater than that of 1998 and 1997, which are 8.80%, 7.57%. And ROA of the company is growing too, from 4.67% in 1997 to 5.56% in 1999. But when look into profit margin, we can find that it decreased from 1997 to 1999. It may have some problems in financing.

The current ratio of the company is equal to current asset divide by current liabilities. So the current ratio in 1998 = $449,490 / $132,692 = 3.39, which is greater than 1. And the quick ratio is equal to cash plus short term investment plus account receivable then divide by current liabilities. So the quick...