Friday, July 19, 2019
Toys R Us and Subsidiaries Running Head: Toys "R" Us Financial Analysis Note: Consistent with the financial report, all amounts are expressed in millions except per share data. Ernst & Young, LLP, independent auditors for Toys "R" Us Inc. and Subsidiaries issued an unqualified opinion on the companyÃ¢â¬â¢s financial statements as of February 1, 1997 and on the consolidated results of operations and cash flows for the three years ending February 1, 1997, February 3, 1996 and January 28, 1995. The report by the independent auditors and their issuance of an unqualified opinion serves to provide reasonable assurance to stockholders, management, regulatory agencies and the public, that the financial statements are materially correct. Materiality is interpreted to mean that there are no unrecorded adjustments which would impact the decisions or opinions of the readers of these financial statements. The inclusion of the auditorsÃ¢â¬â¢ report in the year-end financial report lends credibility to the presentation and allows the users including investors and potential investors to rely on the information as presented. Common Stock & Treasury Stock The company does not have preferred stock and has not declared or paid dividends on its common stock. As of February 1, 1997, Toys "R" Us, Inc. and subsidiaries had authorized 650 shares of par value $.10 common stock, of which 300.4 shares were issued. 12.6 shares were held in treasury stock leaving 287.8 shares issued and outstanding. The book value of the common stock issued and outstanding was $14.56 which is down from February 3, 1996 at which time the book value was $18.8. The total paid-in capital for common stock was $ 518.8 as of February 1, 1997 and $572.8 as of February 3, 1996. The average price per share received by the company for all common stock issued since inception of the corporation as of February 1, 1997 was $ 1.73. Ratio Analysis "ThereÃ¢â¬â¢s a saying that the nice thing about standards is that there are so many of them to choose from." (Maciag, 1998) It is important to choose carefully the ratios to be analyzed to be sure that there is relevance between the data and the conclusions drawn from it. When choosing industry standards, it is important to select like industries with commonalties that support comparison of results. It would not be appropriate to compare the financial statement of t... ... beating the industry averages for inventory turns. In addition their receivables consistently exceed industry standard by a significant amount. References Enhanced Analytics. (May 16, 1999). S&P Personal Wealth. Available: http://www.personalwealth.com. Industry Info. (May 16, 1999). S&P Personal Wealth. Available: http://www.personalwealth.com. Maciag, Gregory, A. (April 13, 1998). A wake-up cal for industry standards. National Underwriter. P29. Meigs, Robert F.; Williams, Jan R.; Haka, Susan F.; Bettner, Mark S., (1999) Accounting. p 619. Mills, John R.; Yamamura, Jeanne H. (October 1998). The power of cash flow ratios. Journal of Accountancy. V186 n4 p53(7). Stocksheet: Media General Quick Source Data-One Wev PageÃ¢â¬âToys R Us INC. (5/16/99) Available: http://www.stocksheet.com. Thomson Investors Network Company Report: Toys "R" Us Inc. (5/15/99). Available: http://www.thomson.com. Vital Stats. (May 16, 1999). S&P Personal Wealth. Available: http://www.personalwealth.com. Wallstreet Research Net Report: Toys R Us Inc. (May 7, 1999). Available: http://www.wsrn.com. Berry, Donna Gorski. (Mid-Oct 1998). Mouths of the millennium. Dairy Foods. 73.74.