2011 Jcp Financial Analysis

[pic]

GENERAL OVERVIEW OF THE FORM 10-K

1. According to the index near the front of the Form 10-K (page 2 of the 113- page download), the report is divided into four main parts. According to the Index, which item in Part II of the report covers the most pages?

Management’s Discussion and Analysis of Financial Condition and Results of

Operations

2. JCP provides sales mix information on page 3 of the download. What were the three major sales categories for the three years presented? How might an investor use this information when forming expectations as to future sales and net income?

Women’s apparel

Men’s apparel and accessories

Home

3. The Management Discussion and Analysis (MD&A) portion of the Form 10-K is of special interest to investors, as it gives management’s perspective on the financial results that the company achieved over the last few years and also management’s expectations as to the near-term future. The MD&A also allows management to explain the factors that went into its decisions regarding accounting estimates.

The MD&A begins with a general overview of the business and certain highlights of the most recent year. It then provides a detailed look at some of the information contained in JCP’s income statements, statements of cash flows, and balance sheets.

The detailed discussion of the income statement begins on page 23 of the download (page 21 per the Form-10K itself) under the heading “Results of Operations”. On page 24-25 of the download, JCP discusses its total net sales for 2011 and 2010. Why does JCP provide an analysis of same-store sales in this section?

JCP management team has included “comparable same-store sales” to provide investors insight into the outcome from all of the operational changes and improvements they have been making at the store level.

[pic]

4. Information related to JCP’s cash flows and balance...