Bj Financail Analysis

Financial Analysis Report

Team 8 MF704 Financial Management 4/23/08

Table of Contents

I. Company Overview ……………………………… II. Industry ……………………………… III. Competitors ……………………………… IV. Risks ……………………………… V. Growth Strategies ……………………………… VI. Historical Analysis ……………………………… Financial Analysis: VII. Operating Capital ……………………………… VIII. Liquidity ……………………………… IX. Asset Management ……………………………… X. Debt Management ……………………………… XI. Profitability ……………………………… XII. Market Value ……………………………… XIII. Current Stock Price Analysis ……………………………… XIV. Growth Rate ……………………………… XV. Capital Asset Pricing Model ……………………………… XVI. Weighted Average Cost of Capital ……………………………… XVII. Expected Price of Stock ……………………………… XVIII. Scenario Analysis ……………………………… XIX. Cash Conversion Cycle …………………………….... XX. Management Recommendations ……………………………… XXI. Analyst Ratings …………………………….... 1 1 2 2 3 4 4 5 5 6 6 6 7 8 9 9 10 11 12 13 14

Exhibits: Historical Stock Price Comparison Working Capital & Value Added Ratio Analysis Stock Price Changes Sustainable Growth Rate Sales Growth Rate Capital Asset Pricing Model Weighted Average Cost of Capital Expected Stock Prices based on: Earnings Per Share Free Cash Flows Market Multiple Cash Conversion Cycle Financial Statements: BJ’s Wholesale Club Inc. Financial Statements: Costco Wholesale Corp.

I. Company Overview 1 BJ’s Wholesale Club Inc. (BJ’s) operates warehouse clubs located in the eastern United States. BJ’s aims to provide “its members with high-quality, brand name merchandise at prices that are significantly lower than the prices found at supermarkets, super-centers, department stores, drug stores, and specialty retail stores”. 2 As of February 3, 2007, BJ’s operated 172 clubs across 16 states spanning from Maine to Florida. Of the 172 clubs, 96 of them operated gas stations. BJ’s generates revenues through the sale of various foods, general merchandise, and gasoline. Club membership fees also contribute to its revenues (the company had...