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Presented By
Rahul Goyal
Piyush Sharma
Neha JoshiSurabhi Jain
ShashankAgrawal
Tarun Kuntal
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CVS
18.40% - Fiscal yr 2005 to 06
20.96% - Fiscal yr 2004 to 05
Longs Drug
9.14% - Fiscal yr 2005 to 06
1.35% - Fiscal yr 2004 to 05
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Though theoperatingmargin hasincreases but thenet margin hasdrasticallydecreased due tothe increase innon operatingexpenses eg.Interest ondebentures,Interest on
loan.etc
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We, can say that CVS is financially performing better thanLongs drug in recent years as it has a good net income marginas compared to longs drug & it is increasing at a stable rate. It isalso performing better on liquidity terms. While on efficiencyterms Longs Drug has a better utilization than CVS. CVS has tokeep a check on inventory management so as to improve itsefficiency & to stand as a leader in the market. On the otherLongs Drug need to keep a check on its expenses to improvefinancially which they are doing by cutting the overheadexpenses.
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COMPARISON OF
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GROSS MARGIN
OPERATINGMARGIN
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EBIDTA MARGINEBIDTA MARGIN
NET INCOME MARGINNET INCOME MARGIN
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SG& A MARGINSG& A MARGIN
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WORKIN
GCAPITAL RATIO
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INVENTORY/ TOTAL ASSETS
FIXED ASSETS/ TOTAL ASSETS
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INVENTORY TURNOVERINVENTORY TURNOVER
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On comparing both the companies on different parameters like:-
1. Financialperformance2. Liquidity
3. Operations4. Efficiency
We, can say that Big Lots initial position was poor as ranked as on
these parameters but in the recent years it has shown progress bycutting its overhead expenses & other items , as a result its
performance has improved by way of Net Income margin or operatingincome. While Dollar General stands at a strong position as compared
on operations, efficiency etc. but in the recent year its margin hasdecreased due to the increase in expenses may be financial expenses
or operating expenses, which is more than the increase in sales due towhich its margins has dropped by a minimal amount. So Dollar General
needs to keep a check on its expenses to improve its performance.
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Sales growth
AMAZON 2006
AMAZON 2005
DRUGSTORE 2006
DRUGSTORE 2005
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Inventory/Total Assets
Fixed Assets/Total Assets
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Lease Adjusted
Debt/Capitalization
Debt/Capitalization
Net Worth/Capitalization
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Inventory Turnover
Accounts Payable/Inventory
Working Capital Ratio
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FixedChargeCoverage
Debt/EBITDA
Lease Adjusted Debt/EBITDA
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Gross Margin
SG&A Margin
Operating Margin
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Return on Equity
AMAZON 2006
AMAZON 2005
AMAZON 2004
DRUGSTORE 2006
DRUGSTORE 2005DRUGSTORE 2004
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Return on Assets
AMAZON 2006
AMAZON 2005
AMAZON 2004
DRUGSTORE 2006
DRUGSTORE 2005DRUGSTORE 2004
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On comparingboththe companies ondifferentparameters like:-
1. Financial performance
2. Liquidity
3. Operations
4. Efficiency
We, can say that Drug store has a weak financial performance as
compared to Amazon as it has a negative income margin . It has
incurred a high amount of S, G & A expenses due to which its
operating income is negative. Drug store is performing better on
liquidity terms but its efficiency is decreasing which can be seen from
turnover ratios. Also due to the increase in expenses its profit hasdecreased. Drug Store needs to keep a check on its expenses & do
proper inventory management to improve its financial performance.
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