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The Kroger Company

The Kroger Company. Module2. Kroger. 343,000 Employees Headquarter in Cincinnati Primary store is “combo store” Multi-department, Marketplace, Price Impact Stores as well Last Saturday in January. Source: Mergent Online.

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The Kroger Company

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  1. The Kroger Company Module2

  2. Kroger • 343,000 Employees • Headquarter in Cincinnati • Primary store is “combo store” • Multi-department, Marketplace, Price Impact Stores as well • Last Saturday in January

  3. Source: Mergent Online Will 2% make sense to use for Kroger going forward? For this portion I used the 2%, but got a very negative number in NFL as you will see in a few slides

  4. Problem with 2% sales method with Kroger • As you can see, they would be using much more cash for operations than they carry on their balance sheet • Trying different percentages, I found something as low as .1% would work better • Is this feasable? • I continued with 2% method for rest of exercise 2% numbers Using .1%

  5. Enterprise Assets and Liabilities • Notice lack of intangibles • Finished goods, and WIP also • PPE largest because cost of building and maintaining grocery/department stores

  6. Net Financial Liabilities • Total about 8.9 billion in debt! • Will have to change these numbers around March when new 10-k comes out • Notice anything missing here? 2013 2012 2011

  7. Common Stock • Tripped up on treasury stock at cost

  8. Putting it all together • Complications when checking with cash and deferred tax assets • Off by about 800,000 for a while

  9. Enterprise Value after Tax • -Interestingly Kroger didn’t discontinue any operations in the past few years • -Shows the strength of the company • -No interest income found as well • -Income taxes are adjusted for tax shield (462,000*.37%) is added

  10. Financing Expense after Tax -The income tax benefit is the tax shield talked about in the previous slide -No foreign translation or anything dealing with that since Kroger only operates in the states -These were all the financing expenses I could find in the 10-K

  11. Statement of Comprehensive income • -Source Kroger 10-K • -Very small compared to other operations and amounts

  12. Putting it All Together • -My numbers didn’t match • -Tried for hours but couldn’t find my error • -My guess is something with the tax shield (wrong rate?) • -Could have potentially missed Interest income or discontinued operations but I don’t think I did • -Going forward will have to look to correct this

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