CASE 84 CERTIFIED ORGANIC Whole Foods Market Inc included th

CASE 8-4 CERTIFIED ORGANIC Whole Foods Market, Inc. included these statements in its 2010 annual report.* WHOLE FOODS MARKET, INC. Consolidated Balance Sheets (in thousands) September 26, 2010 and September 27, 2009 Assets 2010 2009 Current Assets: Cash and cash equivalents $131,996 $430,130 Short-term investments

(1) Net profit margin = Net profit / Sales revenue

2009: 146,804 / 8,031,620 = 1.83%

2010: 245,833 / 9,005,794 = 2.73%

(2) Total asset turnover = Revenue / total asset

2009: 8,031,620 / 3,783,388 = 2.12

2010: 9,005,794 / 3,986,540 = 2.26

(3) Return on asset (ROA) = Net income / Total asset

2009: 146,804 / 3,783,388 = 3.88%

2010: 245,833 / 3,986,540 = 6.17%

(4) Operating income margin (OPM) = Operating income / Sales

2009: 284,349 / 8,031,620 = 3.54%

2010: 437,975 / 9,005,794 = 4.86%

(5) Return on operating assets (ROOA) = Net income / Operating assets where

Operating asset = Total asset - Deferred income tax

2009: 146,804 / (3,783,388 - 91,000) = 3.98%

2010: 245,833 / (3,986,540 - 99,156) = 6.32%

(6) Sales to fixed assets = Sales / Fixed assets where

Fixed assets = Total asset - Current assets

2009: 8,031,620 / (3,783,388 - 1,055,380) = 2.94

2010: 9,005,794 / (3,986,540 - 1,161,519) = 3.19

(7) ROI = Net income / (Equity + Long term debt)

2009: 146,804 / (1,627,876 + 738,848) = 6.2%

2010: 245,833 / (2,373,258 + 508,288) = 8.53%

(8) ROTE = Net income / Equity

2009: 146,804 / 1,627,876 = 9.02%

2010: 245,833 / 2,373,258 = 10.36%

(9) Gross profit margin (GPM) = Gross profit / Sales

2009: 2,754,310 / 8,031,620 = 34.29%

2010: 3,135,401 / 9,005,794 = 34.82%

(b)

Except for gross profit margin, all profitability ratios have improved in 2010.

CASE 84 CERTIFIED ORGANIC Whole Foods Market Inc included th

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