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

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SUMMARY OUTPUT10 Year Regression72 MonthsRegression StatisticsMultiple R 0.44802338R Square 0.200724949Adjusted R Square 0.189306734Standard Error 0.085280367Observations 72ANOVAdf SS MS F Significance FRegression 1 0.127850155 0.127850155 17.57936319 7.9339E-05Residual 70 0.509091867 0.007272741Total 71 0.636942022Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%Intercept 0.025726439 0.010052102 2.55930935 0.012651148 0.005678154 0.045774724 0.005678154 0.045774724X Variable 1 1.153914941 0.27521508 4.192775117 7.9339E-05 0.605015778 1.702814104 0.605015778 1.702814104SUMMARY OUTPUT60 monthsRegression StatisticsMultiple R 0.449504103R Square 0.202053939Adjusted R Square 0.188296248Standard Error 0.077928426Observations 60ANOVAdf SS MS F Significance FRegression 1 0.089189472 0.089189472 14.68661734 0.000314637Residual 58 0.352224699 0.00607284Total 59 0.441414171Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%Intercept 0.024121653 0.010083032 2.392301596 0.020003754 0.003938272 0.044305033 0.003938272 0.044305033X Variable 1 1.120279782 0.292324765 3.832312271 0.000314637 0.535128195 1.705431369 0.535128195 1.705431369SUMMARY OUTPUT48 monthsRegression StatisticsMultiple R 0.205765882R Square 0.042339598Adjusted R Square 0.021520894Standard Error 0.066111551Observations 48ANOVAdf SS MS F Significance FRegression 1 0.008888894 0.008888894 2.033728779 0.160594408Residual 46 0.20105391 0.004370737Total 47 0.209942804Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%Intercept 0.031512992 0.00997864 3.158044888 0.002804139 0.011427032 0.051598951 0.011427032 0.051598951X Variable 1 0.63097627 0.442452353 1.42608863 0.160594408 -0.25963411 1.52158665 -0.25963411 1.52158665SUMMARY OUTPUT36 monthsRegression StatisticsMultiple R 0.194433563R Square 0.03780441Adjusted R Square 0.00950454Standard Error 0.064034519Observations 36ANOVAdf SS MS F Significance FRegression 1 0.00547755 0.00547755 1.335851016 0.25582454Residual 34 0.139414266 0.00410042Total 35 0.144891816Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%Intercept 0.023881239 0.010942822 2.182365759 0.036086711 0.00164275 0.046119729 0.00164275 0.046119729X Variable 1 0.610727981 0.528407296 1.155790213 0.25582454 -0.463124839 1.684580801 -0.463124839 1.684580801141
SUMMARY OUTPUT10 Year Regression24 MonthsRegression StatisticsMultiple R 0.277979006R Square 0.077272328Adjusted R Square 0.035330161Standard Error 0.058476131Observations 24ANOVAdf SS MS F Significance FRegression 1 0.006299853 0.006299853 1.84235421 0.188437649Residual 22 0.075228074 0.003419458Total 23 0.081527927Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%Intercept 0.018154767 0.012685701 1.43112056 0.166448405 -0.008153766 0.0444633 -0.008153766 0.0444633X Variable 1 0.87036741 0.641233282 1.357333493 0.188437649 -0.459469018 2.200203838 -0.459469018 2.200203838142
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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
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Return on AssetsReturn on Assets0.1
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Capital Structure AnalysisWhen look
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however, in 2006, J. C. Penney show
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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 134 and 135: SUMMARY OUTPUT3 Month Regression72
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 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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