Instruction-Petco’s 2021 Financial Analysis

Please read the instruction carefully!!

In this assignment, students will research and take a deep dive into the financial analysis of Petco. This will include their sales history, profit growth, overall balance sheet, and debt load. Financial resources should include Yahoo Finance (make sure you check out the articles on your retailer in the site), Marketplace, the retailer’s 2021 Annual Report or current quarterly report, SEC information etc. Here are some questions to consider when analyzing the financials of your retailer.

Answers to some of these questions may be found in the retailers Annual Statement or articles on Quarterly results. You do not need to answer every question below but these may help you understand their overall financial situation.

Sales
Did the company raise the prices this year compared to the prior year?
Did the company add more stores/locations? Where?
Did the company buy another company?
Did the company launch a new product or product line?
What product sales were growing in the company? Were some slowing or declining?
Did the company change their business model?

Gross Profit
Did the company incur larger costs for its raw materials?
Did suppliers raise their prices?
Did the company increase inventory significantly?
Did the mix of products sold, have lower-margin products growing faster?

Net Profit
What did management do to spend significantly more or less on any expense category compared to the prior year?
Did salaries go up significantly or other expenses such as fixed costs?
Did advertising expenditures go up significantly? This could be good or investment in growth in the future.
Did depreciation expense grow significantly? This could be good as an indicator of investing in new plants equipment or buildings.
Was there any one-time write-offs that will not recur again?

Debt to Equity ratio
What changed from year to year?
Did debt go up or down? Less debt is generally good
Did the company increase Equity or decrease equity? more Equity is generally good