Annual Report Project
Professor Ekaterina Kouprianova
ACC206 Accounting II
Giant Food is mainly a grocery chain that was incorporated in Delaware in 1935. They also have pharmacies, bakeries, floral and general check cashing/bill paying/western union facilities inside the stores. There are 179 stores selling food, drugs, and general merchandise. The majority of the Company's stores are located in shopping centers. The organizational structure of the company is solid, the reporting relationships, procedures and so on are a critical component of effective strategies. All officers of the board have been employed by the company for a period in excess of 5 years before appointment.
The average food and food/pharmacy combination unit generating an annual sales volume of approximately $23,600,000. "Sales for the 1998 fiscal year were $4.23 billion compared to sales of $3.88 billion in the prior year. The current year contained 53 weeks compared to 52 weeks in the prior year. Same store sales, adjusted for same number of weeks, for the 1998 fiscal year were up $129 million or 3.34% as compared to fiscal 1997, reflecting a significant increase during the fourth quarter both in total sales and in same store sales as compared to the fourth quarter of fiscal 1997. Sales results for the first three quarters of fiscal 1998 totaled $2.81 billion, which represented an increase of $140.6 million, or 5.3%, over the same period." (EDGAR 1998)
Cash and cash equivalents include very liquid investments with an original maturity of three months or less. Short-term investments are primarily US government and securities purchased with an original maturity of more than three months. As of February 28, 1998, the Company's cash, cash equivalents and short-term investments totaled $149 million, compared with $178 million and $246 million for each of the two prior years. The less cash is partially the result of reduced earnings and higher financing activities, the top of this was the repayment of debt and buying treasury stock.
Net cash provided was $177 million for the current year, $122 million for last year and $199 million for the 1996 year. Cash spending for property, plant and equipment were $137 million for the current year, and $146 million and $128 million for the prior two years. These costs were related to adding new stores and maintaining the existing stores.
Working capital at the fiscal year end was $173 million compared with $199 million and $209 million at the close of the two prior years.
"Shareholders' equity at the yearend was $903 million, compared with $874 million a year earlier. Long-term debt consists of $27 million of notes and mortgages at an average interest cost of 10.2%, and $156 million of obligations under capital leases. At the close of the prior year, the comparable balances were $39 million and $145 million, respectively. " (EDGAR 1998)