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Whole Foods, Inc. Corporate Annual Report

Whole Foods, Inc. Corporate Annual Report. Holly Marie Kunz Methodist University. Overview. Company Description/Purpose for Selection Company Strategy and Business Environment Results of Operation, Liquidity, Capital Resources Annual Independent Audit

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Whole Foods, Inc. Corporate Annual Report

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  1. Whole Foods, Inc. Corporate Annual Report Holly Marie KunzMethodist University

  2. Overview • Company Description/Purpose for Selection • Company Strategy and Business Environment • Results of Operation, Liquidity, Capital Resources • Annual Independent Audit • Financial condition, profitability, investment return and management efficiency • Altman Z Score • Observation s

  3. Company Description • World’s leading natural and organic foods supermarket. • Stores and locations • Dedication to health of individuals and the environment

  4. Reason for Selection • Personal interest • Rising demand for natural and organic products • Employee benefits • Would I invest?

  5. Company Strategy and Business Environment • Chairman’s Message • Growth Strategy • Business segment • Primary products/Other Products • Social and Economic Concerns

  6. Results of Operation, Liquidity, Capital Resources Liquidity is increasing, shows the ability to take on additional debt. Cash and cash equivalents decreased from $430 million in 2009 to 132 million in 2010. This was due primarily to an investment of $330 million in short-term investments for 2010 in the form of available-for-sale securities. Spent $257million on capital expenditures. $171.4 million of this for new store development $85.4 million was used for remodels and property and equipment expenditures. Whole Foods has an outstanding $350 million revolving line of credit (secured). The company has capital lease requirements for building, equipment and land rentals. Expiring from 2011-2054. Generated operating cash flows of $585.3 million -incurred capital expenditures of $256.8 million -free cash flows of $328.5 million. Debt: $700 milion dollar term loan -payed $210 million payment during 2010 *Following the fourth quarter results, Whole Foods paid down $100 million of its term loan scheduled to mature in August 2012, with $390 million still outstanding.

  7. Annual Independent Audit • Who/Where? • Responsibility of the Auditor • Management Responsibility • Auditor Opinion

  8. Financial condition, profitability, investment return and management efficiency Financial Condition- Financial conditions at Whole Foods shows the ability to take on additional debt, liquidity increasing. Debt to equity ratio ↓ (.62-.21) Current ratio ↑ (.9-1.6) Quick Ratio- remained the same (.8) Profitability-The business is performing well. As a company with a growth strategic focus, the performance is increasing. Sales, operating income and operating cash flows are all trending upward together, signaling a stable operating business environment.Sales↑ (7,953-9,055) Operating Income ↑ (236-437) Operating cash flows ↑ (33-585) Investment Return-The investment return at Whole Foods is performing well. As is typical with a company that has a growth strategic focus, Whole Foods has increasing returns. Return on Equity ↑ (9.01 to 12.3) Return on Assets ↑ (3.88 to 7.4) Management Efficiency- Management is efficiently running the company. No debt collection problems and the inventory is sold and replaced at a period higher than industry average. All categories higher than industry. Receivable Turnover ↑ (73.0-75.7) Inventory Turnover ↑ (15.7-17.6) Asset Turnover ↑ (2.2-2.3)

  9. Altman Z Score • 2008- 5.5271 • 2009-5.0312 • 2010-6.7444

  10. Conclusion Why are they a “top 100” Employer? Would I invest in this company?Thanks to Whole Foods Marketing Department at Cary, NC location for donations!

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