J. C. Penney Company, Inc. Equity Valuation and Analysis As of ...

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SUMMARY OUTPUT3 Month Regression72 MonthsRegression StatisticsMultiple R 0.449493363R Square 0.202044283Adjusted R Square 0.190644916Standard Error 0.085209953Observations 72ANOVAdf SS MS F Significance FRegression 1 0.128690494 0.128690494 17.72416631 7.46639E-05Residual 70 0.508251528 0.007260736Total 71 0.636942022Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%Intercept 0.02395843 0.01004484 2.385148001 0.019783542 0.003924629 0.043992231 0.003924629 0.043992231X Variable 1 1.159873034 0.275503768 4.210007875 7.46639E-05 0.610398101 1.709347967 0.610398101 1.709347967SUMMARY OUTPUT60 monthsRegression StatisticsMultiple R 0.452814378R Square 0.205040861Adjusted R Square 0.191334669Standard Error 0.077782436Observations 60ANOVAdf SS MS F Significance FRegression 1 0.090507942 0.090507942 14.95972481 0.000280412Residual 58 0.350906229 0.006050107Total 59 0.441414171Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%Intercept 0.022531053 0.010099422 2.230925039 0.029567509 0.002314864 0.042747242 0.002314864 0.042747242X Variable 1 1.13064286 0.292323441 3.867780346 0.000280412 0.545493922 1.715791798 0.545493922 1.715791798SUMMARY OUTPUT48 monthsRegression StatisticsMultiple R 0.216255217R Square 0.046766319Adjusted R Square 0.026043848Standard Error 0.065958576Observations 48ANOVAdf SS MS F Significance FRegression 1 0.009818252 0.009818252 2.256792556 0.139863647Residual 46 0.200124552 0.004350534Total 47 0.209942804Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%Intercept 0.030542564 0.01011469 3.019624271 0.004120452 0.010182749 0.050902379 0.010182749 0.050902379X Variable 1 0.660952169 0.439971162 1.502262479 0.139863647 -0.224663833 1.546568172 -0.224663833 1.546568172SUMMARY OUTPUT36 monthsRegression StatisticsMultiple R 0.197449946R Square 0.038986481Adjusted R Square 0.010721378Standard Error 0.063995173Observations 36ANOVAdf SS MS F Significance FRegression 1 0.005648822 0.005648822 1.379315 0.248378338Residual 34 0.139242994 0.004095382Total 35 0.144891816Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%Intercept 0.023414247 0.011021408 2.124433335 0.040986238 0.001016051 0.045812443 0.001016051 0.045812443X Variable 1 0.622418625 0.529969468 1.174442421 0.248378338 -0.454608911 1.699446162 -0.454608911 1.699446162133
SUMMARY OUTPUT3 Month Regression24 MonthsRegression StatisticsMultiple R 0.277145786R Square 0.076809786Adjusted R Square 0.034846595Standard Error 0.058490786Observations 24ANOVAdf SS MS F Significance FRegression 1 0.006262143 0.006262143 1.830408596 0.189820587Residual 22 0.075265784 0.003421172Total 23 0.081527927Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%Intercept 0.018089978 0.012709597 1.423332134 0.168667626 -0.008268113 0.044448068 -0.008268113 0.044448068X Variable 1 0.86829239 0.64178856 1.352925939 0.189820587 -0.462695614 2.199280393 -0.462695614 2.199280393134
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J. C. Penney Company, Inc. Equity V
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Industry AnalysisIn 1902, James Cas
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Financial Analysis, Forecast Financ
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Business & Industry AnalysisCompany
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Industry OverviewThe retail industr
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Five Forces ModelThe Five Forces Mo
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ConcentrationThe level of concentra
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capable of offering lower prices th
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If a firm wishes to shut down, it m
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Legal BarriersMany industries have
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These costs include issues such as
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Bargaining Power of SuppliersThe de
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The relative bargaining power of th
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Competitive StrategiesIn order to a
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Department stores have to focus on
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The Big PicturePlayers in this indu
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Lower Input CostsJ. C. Penney is at
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in the last five years. This trend
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convenient for different consumers
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transactions have been improperly s
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Penney does state in its annual rep
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Operating and Capital LeasesOperati
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Potential Accounting FlexibilityA f
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truly are. J. C. Penney, however, h
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Qualitative Analysis of DisclosureT
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we can see why targeting the strong
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manipulation diagnostics for J. C.
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Net Sales/Net Accounts ReceivableNe
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Net Sales/Unearned Revenue1200Net S
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Below is a chart of sales manipulat
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As for the industry, all the compan
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Pension Expense/SG&APension Expense
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Below is a chart of all expense man
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discount rates in respect to pensio
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Financial Analysis, Forecast Financ
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paying off their short-term obligat
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ecause many firms in this segment o
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Penney’s inventory turnover is in
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ConclusionAnalysis through liquidit
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operating efficiency because the fi
Page 84 and 85: Return on AssetsReturn on Assets0.1
Page 86 and 87: Capital Structure AnalysisWhen look
Page 88 and 89: however, in 2006, J. C. Penney show
Page 90 and 91: Sustainable Growth RateSustainable
Page 92 and 93: average of only years 2005 and 2006
Page 94 and 95: (reported in millions)Annual Income
Page 96 and 97: We then began to look at the equity
Page 98 and 99: Common Size Balance Sheet 2002 2003
Page 100 and 101: (numbers in millions)Statement of C
Page 102 and 103: ConclusionOverall, it appears that
Page 104 and 105: Inc. We set these averages equal to
Page 106 and 107: Price to BookPPS BPS P/B IndustryAv
Page 108 and 109: Price Earnings GrowthPPS EPS PEG In
Page 110 and 111: y J. C. Penney’s EBITDA. Then we
Page 112 and 113: Regression Analysis3 Month Rate 72
Page 114 and 115: Intrinsic ValuationsIntrinsic valua
Page 116 and 117: amount in the eye’s of shareholde
Page 118 and 119: This particular stock price in our
Page 120 and 121: esidual income or converge. Future
Page 122 and 123: To find our long run return on equi
Page 124 and 125: Sensitivity AnalysisGrowth Rates0 -
Page 126 and 127: for this large difference between s
Page 128 and 129: Analyst RecommendationAfter careful
Page 130 and 131: AppendixLiquidity RatiosCurrent rat
Page 132 and 133: Capital Structure RatioDebt to equi
Page 136 and 137: SUMMARY OUTPUT6 Month Regression72
Page 138 and 139: SUMMARY OUTPUT2 Year Regression72 M
Page 140 and 141: SUMMARY OUTPUT5 Year Regression72 M
Page 142 and 143: SUMMARY OUTPUT10 Year Regression72
Page 144 and 145: Cost of Equity 0.1361Estimated Pric
Page 146 and 147: Discount Dividends Model0 1 2 3 4 5
Page 148 and 149: Residual Income Model WACC(AT) 0.07
Page 150 and 151: Z-Score AnalysisZ-Score=1.21.43.320
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