FINANCIAL ANALYSIS

Sears Holdings Corporation



Sears Holdings Corporation

Brief History

Sears Holdings Corporation is one of leading firms engaged in retail business in America. It was founded in 1886, and since then, it has remained one of the major retail firms, enjoying a handsome market share in the retail sector. The headquarter of the firm is located in Hoffman Estates, Illinois. It is a multi-line retailer, offering a variety of merchandise and related services (SHLD Company Financials, 2013).

Sears Roebuck & Co started its business as a catalog retailer and during the 1920s, the enjoyed a formidable position in the American retail sector. Sears operates both specialty and full-line stores. Its customer operations include major sales from online and catalog marketing. Sears' 871 full-line stores offer a wide range of products for the home. These include appliances, clothing, jewelry, automotive supplies, power tools, and garden equipment. Sears.com is Sears' implementation of internet marketing and offers a limited assortment of home and accessories merchandise (Scheraga, 2002). In addition to its full-line stores, Sears operates 1,100 specialty stores, 792 primarily independently owned stores, 245 Sears Hardware Stores, 8 furniture stores, 18 The Great Indoors stores, 45 Sears Outlet Stores, and a commercial sales division (Sears Holdings Corporation, 2013).

Balance sheet & P & L Analysis

. The financial statements and reports are released on quarterly basis. The annual reports published are in total compliance with the standards and regulations prescribed by the Securities Exchange Commission.

Since 2007, the current ratios have shown a declining trend, which is a negative sign for Sears. The quick ratio has dropped during the four year period (2006-2010). Thus it can be said that market securities and accounts receivable stand at 85 percent of the current liabilities. The inventory turnover has shown a mixed trend. It decreased from 5.12 in 2006 to 5.01 in 2010 (Sears Holdings Corporation, 2013). This deline indicates that the company hd more investment directed towards inventory as compared to the sales during the period mentioned above. This decline in iventory turnover had a negative impact on Sears Roebuck & Co due to the fact that the days to inventory had incresed, meaning that the company was taking more days to sell its entire inventory; 71.79 days in 2010 as compared to 70.38 days in 2006. On the contrary, the days to receivables for the company decreased to 150 days in 2010 as compared to 263 days in 2007. When ...