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Brooks Competition JC Penney

Brooks Competition JC Penney. Team #4: Xin Zhang Keat Ian Yeoh Jenn Yang Lee. Recommendations. Purchase JC Penney stocks. Capital Budgeting. Assumptions. Ratios Depreciation Inflation rate Sales growth rate. Capital Budgeting. Operating cash flow. Net working capital

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Brooks Competition JC Penney

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  1. Brooks Competition JC Penney Team #4: Xin Zhang Keat Ian Yeoh Jenn Yang Lee

  2. Recommendations • Purchase JC Penney stocks

  3. Capital Budgeting Assumptions • Ratios • Depreciation • Inflation rate • Sales growth rate

  4. Capital Budgeting • Operating cash flow • Net working capital • Net capital spending

  5. Capital Budgeting Sensitivity analysis • Net working capital • Variable cost ratio

  6. Capital Budgeting • NPV=$23,224 Conclusion

  7. Financial ratios

  8. SWOT Analysis External factors Opportunities younger population in America is growing into young adults and teenagers. Unemployment rate has been decreasing since 2009.

  9. Threats Competitors seem to outperform JCP in all the financial ratio conducted Kohl’s is the only other competitor who owns slightly more stores than JCP

  10. Internal Factors Strength The number of stores JCP owns Prototype store in Texas that recorded a sales per gross square foot of six hundred dollars

  11. Weakness Currently unable to generate enough sales

  12. Conclusion Although JCP has not been generating enough profit for the last three years, we think that is largely due to the change in management and remodeling project. Therefore, we suggest a “Buy” position on JCP.

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