Dupont Analysis On Jc Penney And Nordstrom
Dupont Analysis
J.C. Penney's, Inc. versus Nordstrom, Inc. | Fiscal years 2005 and 2004
Refer to Figure 1.
During fiscal year 2005, both J.C. Penney's Inc. ("Penney's) and Nordstrom, Inc.
("Nordstrom") provided similar and high returns on their shareholder investments, at
27% and 26%, respectively. Both companies' 2005 returns on equity ("ROE's") are up
from prior year. While Nordstrom posted a significant increase in ROE by 20% over
prior year, Penney's ROE is up 152% over its 2004 ROE.
While it is notable that both companies have strong 2005 ROE's and have increased their
ROE's since 2004, there is a very large variance in ROE growth between the two
companies. This suggests that although the 2005 ROE's are similar, the companies must
have taken different paths to achieve these returns. Overall differences in net income
reflect that Nordstrom saw its earnings driven by performance on continued operations,
while Penney's achieved its result by showing earnings from......
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