Nordstrom, Inc. and T.J. Maxx, Inc.
Financial Analysis

Class: FIN2000
Instructor: Julia Rodriguez
Student: Alexander Sucasaca

Nordstrom and T.J. Maxx are department stores chain in the United States.
Nordstrom was founded in 1901 as a retail shoe business in Seattle, but later incorporated in the state of Washington in 1946. It is one of the nation’s leading fashion specialty retailers, with 225 U.S. stores located in 30 states. Nordstrom has two reportable segments: Retail and Credit. The Retail segment includes 116 ‘Nordstrom’ branded full-line stores, an online store at www.nordstrom.com, ‘Nordstrom Rack’ stores, and also other retail channels. Nordstrom offer their customers a wide selection of high-quality brand name and private label merchandise. The Credit segment includes a wholly owned federal savings bank, Nordstrom fsb, through which they provide Nordstrom VISA credit cards and a debit cards.
Nordstrom operates on a 52/53-week fiscal year ending on the Saturday closest to January 31st. Nordstrom is very careful with its inventory; it plans its merchandise purchases and receipts to coincide with expected sales trends.
Nordstrom strategic growth plan focuses on stores and on e-commerce. It is also pursuing a heightened focus on technology to enhance its website and mobile capabilities. The training and development of their future leaders is important to their long-term success. Nordstrom utilizes capital to finance its operations, make capital expenditures and acquisitions, manage its debt levels and return value to its shareholders through dividends and share repurchases. Finally, its ability to obtain capital and the cost of the capital depend on company performance, financial market conditions and independent rating agencies’ short- and long-term debt ratings.

Profitability Ratios: (in millions) 1. Profit Margin: Net Income / Sales :$ 683 / 10,497= 0.065 % 2. Return on Assets: Net Income / Total Assets : $ 683 / 8,491= 0.080% 3. Return on Equity : Net Income / Stockholder’s equity: $683 / 1,956= 0.35%
Liquidity Ratios: (in millions) 1. Current Ratio : Current Assets / Current Liabilities = $5,560 / 2,575 = 2.16x 2. Quick Ratio : Current Assets – Inventory / Current Liabilities =
$5,560 – 1,148 / 2,575 = 1.71x

T.J. Maxx was founded in 1976 and acquired Marshalls in 1995. The TJX Companies, Inc. is the leading off-price apparel and home fashions retailer in the United States and worldwide. Over 2,700 stores offer a rapidly changing variety of quality, brand-name and designer merchandise at prices usually 20% to 60% below department and specialty store regular prices, every day. T.J. Maxx off-price business model is flexible; this allows them to react to market trends. It has opportunistic buying and inventory management strategies which give them flexibility to adjust its merchandise assortments more frequently than traditional retailers. By maintaining a liquid inventory position, their merchants can buy close to need, enabling them to buy into current market trends and take advantage of opportunities in the marketplace. It has a specialized inventory planning, purchasing, monitoring and markdown systems; its goal is to achieve rapid in-store inventory turnover on a vast array of products and sell substantially all merchandise within targeted selling periods.

Profitability Ratios: (in millions):
1. Profit Margin: Net Income / Sales = $ 1,343,141 /