Question

Explain what the financial ratios tell us about whole foods' past and prospective operating performance

Answer 1

We can know from the data comparison that the performance of Whole Foods Market has somewhat declined in 2007. However this decline is not major and threatening to the company's performance. Sales return has decreased by 1% and the current ratio is also less than 2006. The

reduction in working capital can be a problem to the company hence it should look into that. The debt-to-equity ratio and the debt-to-capital ratio have increased which is not so beneficial for the company. As the gross profit margin is almost equal in both years the company is visibly performing well from financial perspective. The inventory turnover per day has also decreased in 2007