Kroger's Current Ratio Summary

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Kroger
In 2015
• Current ratio = Current assets/ Current liabilities = 8,911 / 11,403 = .78
• Debt ratio = Total liabilities / Total assets = 25,114 / 30,556 = .82
• Inventory turnover = COGS / Inventory = 85,512 / ((5688 + 5651)/2) = 15.08
In 2016
• Current ratio= 9,892 / 12,971 = .7626
• Debt ratio = 27,099 / 33,897 = .799
• Inventory turnover = 85,496 / ((6168 + 5688)/2) = 14.42

The current ratio measures the ability of a business to pay back their liabilities. Kroger’s current ratio for both years was under one, which shows that Kroger has more current liabilities than current assets. This could predict that Kroger is not in good financial health at this time. However, some of their competitors have current ratios under one too. The grocery store industry trends to have lower liquidity ratios, because they keep lower levels of current assets. Their ongoing sales help pay upcoming liabilities. Still, business owners and investors would be looking for a current ratio over one at least. …show more content…

Kroger has an inventory turnover ratio of about 15, which means their inventory is sold and replaced 15 times a year. A high inventory turnover ratio indicates strong sales, especially if profits are increasing too. Kroger’s competitors have inventory turnover ratios ranging from 10 to 34, so Kroger is right in the middle. It’s hard to compare companies with this ratio, because a high ratio doesn’t always translate to profits. An inventory turnover ratio could be high because the company offered large discounts.
Wesfarmers’ Inventory turnover = 7.97, 7.74
Alimentation’ Inventory turnover = 34.27,

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