The current ratio is current assets divided by current liabilities
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COLLAPSE SUBDISCUSSION
Natasha Williamson
Natasha Williamson
Yesterday
Jun 2 at 8:08am
The business I chose is T.J.Maxx.
The current ratio is current assets divided by current liabilities (Porter &Norton, 2018). The current ratio for the May 1, 2021 statement is 1.51 In 2020, it was 2.20. This information shows T.J.Maxx to be more liquid in 2020 than in 2021.
The profit margin for the May 1, 2021 statement is 7.15%. The profit margin for the year 2020 is -30.45%. This means that for the current statement, every dollar has seven cents as profit. The previous year’s profit margin shows that T.J.Maxx was affected by the pandemic. According to their financial statements and website, T.J.Maxx closed stores due to the pandemic. The information provided for current profits only includes stores that are open. There are plans to reopen more stores as the economy recovers from Covid-19.
Overall, T.J.Maxx appears to be doing well. There is an increase in sales from last year and, according to T.J.Maxx, they are operating above what was planned. The current earnings per share is 44 cents. T.J.Maxx also posted a dividend of 26 cents. Their inventory has also increased from 4.9 billion to 5.1 billion which means there is no shortage of merchandise to sale. It appears that T.J.Maxx has rebounded and is in the process of rebounding from the pandemic.T.J.Maxx uses internal auditors as well as external. The only information that could be found about external auditors included the company KPMG audit services. Specific information concerning auditing could not be found.
References
Porter, G., & Norton, C. (2018). Using financial accounting information: The alternative to debits and credits (10th ed.).
Retrieved from https://www.cengage.com (Links to an external site.)T.J.Maxx (n.d.).https://tjx.com/docs/default-source/corporate-responsibility/tjx-global–corporate-responsibility-summary-report.pdf
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