Ratio Analysis for the Kroger Company

RATIO ANALYSIS FOR THE KROGER COMPANY

In this portion of the report, a ratio comparison analysis will be conducted of the Kroger

Company and compared with the ratios of the industry norm. In this evaluation, an

acknowledgement of the key drivers to the business will also be identified and based upon

those ratios, a conclusion will be suggested in determining whether the Kroger Company is

a week or strong

industry performer.

The suggested ratio comparisons will include the following segments under the financial

strength heading: the current ratio, the quick or acid test ratio, the long term debt to

equity ratio, and the total debt to equity ratio. The gross profit margin and operating

profit margin ratios will be examined under the profitability section. Management

effectiveness will look at the return of assets, the return on investments, and the return of

equity ratios. The fourth area to be examined will include efficiency and be comprised of

accounts receivable turnover ratios, inventory turnover ratios, and asset turnover ratios.

The current ratio is a commonly used measure of short run solvency, which is the ability of

a firm to meet its