What challenges are affecting Sears’ financial performance? Revenue performance (What is Sales doing and why?) COGS performance (Up or down, by a little or a lot?) Operating Expense (Relative to revenue?) Cash flow analysis (Is debt consuming internal capital?) Liquidity (Can they cover their interest costs) Inventory (high, low relative to sales? expanding, contracting?) Equity (what is it doing? why?) Assets (expanding or contracting? why is this important?) Share price Evaluate Sears’ performance from FY 2011/12 to FY 2016/17 using the company’s financial statements and financial tools such as common size analysis and ratio analysis. Trend analysis Which would help more, more revenue, less expenses, less debt? Do some sensitivity analysis to see which impacts net income the most. How likely is Sears a candidate for bankruptcy? What is their competition’s Altman Z-Scores? How does Walmart compare? How does Macy’s compare? What is your recommended course of action? If Sear’s continues on its current trajectory, what will their Altman Z-Score be in FY 2017/18?
