Whole Food Market - Admission/Application Essay Example

WHOLE FOOD MARKET Summary of financial performances Summary of the financial performances of Whole food market will be done on the basis of different financial indicators given in the annual report of the company. It is clear that the organizations gross profit is 3,136,275 $ in 2010. It indicates in which way management of the company has utilized their labors and how effectively they have supplied their materials. Gross profit margin is 35%. It shows company’s financial heaths. It has helped the organization to pay different operating expenses and assisted the organization to build for the coming years. Gross profit margin of the company is stable. Cost of goods sold has great impact on Whole Food Market’s gross profit margin. It is a good sign for the organization. Net income of the company was $245,833 in 2010. It is the total earnings of the organization after managing all operating expenses. It is very significant and important for organization’s profitability. Total current asset of the organization was $1,161,519. In this year company did not paid any dividend to its share holders. Current ratio of the organization was 155%. It shows how much Whole Food Market is prepared to pay back its short term liabilities. It gives an idea about the organization’s ability to convert its assets in to cash. The organization had 5% operating margin in 2010. Quick ratio is 112%. Cash ratio of the company is 29% (NASDAQ, 2014). Although very impressive financial indicators are there for the company but still Whole Food Market could not able to satisfy its stake holder’s expectations. The company has stopped giving dividends to its share holders from 2008. In this year also, company did not announced any dividend for its share holders. Share holders always expect increasing dividend growth. The company has totally failed in this aspect. Since last two years stake holders are deprived of dividend which is a very obvious reason for share holder’s dissatisfactions. Business risks Modern business world is full of risks. Being a business organization Whole Food Market has many risks. Here three risks will be discussed. The organization has fierce devotion towards profitability. Every organization operates in the market for making profits. Making money in business is very important for every profit making organization. But social responsibilities are also very important. This aspect is very often missing with the company. The organization is very dominant in terms of acquiring different smaller businesses in the retailing industry. The company has a tendency of monopolization. The organization has stop giving dividends but still it is very aggressive in terms of buying small competitors. It has affected company’s financial goals negatively in 2010. Poor working conditions for labors are also very serious threat for Whole Food Market. Workers are the back bone of any company’s success. This aspect is same in case of Whole Food Market also. But working conditions are very poor with the organization. Whole Food Market offers lowers wages to its labors than industry standards. Individual labor’s respect is also missing in the company. The organization very often reduces their number of staffs. Labor grievances are not taken care of properly in the company. In their Madison unit workers get very less facilities in terms working environment. It is a serious business threat for the organization. It had a negative effect in their financial performances in 2010. Selling dangerous food products is also a very serious business threat for Whole Food Market. The company had sold fish to customers. Level of toxic mercury was very high in those fishes. One customer was seriously affected after consuming that product. Products qualities should not compromised at any cost. But here the company has opposite case. Whole Food Market kept those products for longer period of time in their California shops. Government forced them to discard those stocks of dangerous food products. This serious issue blocked the company from achieving their desired financial results, as sales were down due to distrust among customers (Quaddus and Muhammed, 2011). Activities Whole Food Market has to come up with certain activities to overcome these three risks. Those activities are discussed below. The organization has to be more restrain in terms of their profitability. It has to be more and more selective and calculative in terms their acquisitions. The organization should go for profitability but it should not sacrifice different social factors. The organization can engage itself with some corporate social activities. The company should not act as a profit making selfish business giant. It should be more stake holder centric. The company should compete in the industry in a very free and fair way. Corporate social responsibilities will help the organization in terms of their image in the market. The company must improve their working conditions. Workers in every operating center should get maximum benefits and facilities. Wages of labors must be at par with industry standards. Grievances of workers have to be deal in a serious way. Each and every individual worker should be respected and must be treated as important associate of the company. It will increase moral of workforces. Labors must be given regular trainings for their jobs. Regular training will results in higher outputs from labors. Whole Food Market must maintain a fixed and suitable number of employees in the organization. Quality of the products must not be compromised at any cost. The organization has to come up with a very stringent and modern quality control system. The company should check its product’s qualities especially for perishable products on a regular basis. It may hire quality control experts for marinating good qualities of their products. It should highlight their new quality control procedures in the market. It will help the organization to retain its image in the mind of customers. The organization has to be ethically and morally very transparent in terms of their business practices. It must discard its all dangerous food products by itself without waiting for any Government intervention. Overall impression Over all financial impression is very impressive. The company has good financial indicators. The company has maintained its profitability at any cost. It is a financial accounting document. The annual report of the company is providing different financial records. It is showing organization’s financial performances for the year 2010. The annual report of Whole Food Market is clearly furnishing different key financial indicators. It is offering a clear cut picture to both internal and external stakeholders of the company. On the basis of this report share holders of the company will invest in near future. It is definitely a financial accounting statement. No secret management strategies are discussed in the annual report so it is not a managerial accounting document. All stake holders and general people are the targeted audience for this annual report. It will be distributed to all the shareholders related with the company. The annual report has produced positive image of the organization. The organization has recorded good gross profit margin, good net income and revenue. The annual report is showing that the organization has good liquid situation to pay back its all current liabilities. According to the annual report in case of dividend the organization has some issues. Earnings per share of the company have grown. It has experienced 16% CAGR in 2010 in terms of Earnings per share. CAGR is 31% in terms of operating cash flow. Net income also increased in comparison to 2009. In 2009 it was 146,804$ and in 2010 it became 245,833$. Gross profits also increased in compare to past two years (Whole Food Market. 2010). References NASDAQ. (2014). WFM Company Financials. Retrieved from: http://www.nasdaq.com/symbol/wfm/financials?query=income-statement. Quaddus, M. A. and Muhammed A. B. S. (2011). Handbook of Corporate Sustainability: Frameworks, Strategies and Tools. London: Edward Elgar Publishing. Whole Food Market. (2010). Annual Report. Retrieved from: http://www.wholefoodsmarket.com/sites/default/files/media/Global/Company%20Info/PDFs/ar10.pdf. Read More