Financial Statement Analysis

Financial Statement Analysis of

Ross Stores, Inc. and TJX Companies, Inc.

By Angela Thacker and Darrin Warr

Fall Semester of 2012

Executive Summary

The purpose of this financial analysis is to review the overall financial performance and strategies of the two leading companies in the off-price apparel and home fashion industry in the United States, Ross Stores, Inc and TJX Companies, Inc. This report makes a recommendation on which company to invest in base on the review of the two companies. The report includes a brief summary of the off-price apparel and home fashion industry, as well as a summery of both companies. The report examines both company’s common-size and comparative income statements for the years 2010, 2011, and 2012. Also we examined both company’s common-size and comparative balance sheets for the same years. The report will also include a review of the different financial ratios of liquidity, activity, profitability, and coverage. These reports were used because they reflect each company’s stability and financial performance over this three year period. The detailed reports will be available for review in the appendix section of this report and were valuable tools when making the finial decision on which company to recommend for investment.

The retail industry has seen a steady growth of the last few years. Due the economic troubles there has been an increase demand for off-price apparel and home fashions. This type of retailer offers designer fashions at 20% to 60% off department store prices. Two of the largest companies in this industry are Ross Stores, Inc. and TJX Companies, Inc. Ross Stores, Inc. operates 1,097 retail stores in 33 different states in the United States. The company has two types of stores Ross Dress for Less and DD’s Discounts. In 2011, Ross ended the fiscal year with revenues of $8.6 billion. TJX Companies, Inc. is an international company...