Publix Supermarkets

Brandon Zaiter

ACG 2021 Sec 004

Executive Summary

• The Publix Supermarkets Company looks like it’s a chain that is on the rise for many years to come. This can be seen through it’s always rising stock prices and recent splits. Publix also keeps their stock private so that only employees of the company have the option to purchase. It is a family organization that is run with great financial knowledge but also good business sense.

• http://www.publix.com/about/stockholder/SSNewsList.do• http://www.secinfo.com/d2F5a.v1m.htm

Introduction

• Chief Executive Officer-Charles H Jenkins, Jr

• Publix Home Office- 3300 Publix Corporate Parkway Lakeland FL, 33811

• Ending Date of Last Fiscal Year-12/31/05

• Publix sells a variety of merchandise to generate revenues. This merchandise includes grocery, dairy, produce, deli, bakery, meat, seafood, house wares and health and beauty care items. Many of the company’s supermarkets also have pharmacy and floral

departments. • Publix has stores throughout Florida, Georgia, Alabama, South

Carolina, and Tennessee.

Audit Report

• Independent Auditors

• Linda S. Hall

• John T. Hrabusa

• Alfred J. Ottolino

• Laurie S. Zeitlin

• The auditors believe that the consolidated financial statements, which have been prepared in accordance with accounting principles are generally accepted in the United States of America. They also believe that the preparation of these financial statements requires management to make estimates upon upcoming assets and liabilities as best they know how.

Stock Market

• Current Stock Price $18.25 per share. Effective 8/1/06.• The Stock was at $72.75 on 8/1/05 and is now at the

current price of $18.25 due to a 5 for 1 split on 8/1/06.• The 2006 dividend is $1.00 per share, up from 70 cents

per share in 2005.• This information was posted on 3/16/06. • In my opinion I would buy as much Publix stock as I

could and hold for it for a long period of time. Over the past three years Publix stock has more than doubled and has recently seen it’s second 5 for 1 split in the company’s history.

Industry Situation and Company Plans

• Publix Supermarkets continue to grow on a daily basis. They have been dominating the industry and have even helped cause the bankruptcy of Winn Dixie causing them to shut down many of their stores. The main threat to Publix are the Wal-Mart Super centers that seem to be opening everywhere. But as long as Publix stays with the same values it is held true over the years, they will compete. Publix now has 875 stores compared with 850 at the beginning of 2005. Publix intends to keep their motto of giving great customer service and selling quality goods.

Income Statement

• This is a multistep format.• http://www.secinfo.com/d2F5a.v1m.htm• Page 35,36 of 55• The has been a slight increase in profit causing net

income to also increase.

Balance Sheet

• http://www.secinfo.com/d2F5a.v1m.htm• Page 31,32 of 55.• Stockholder’s equity has increased the most causing the

company’s assets to increase.

Statement of Cash Flows

• Cash flows from operations are less that net income for

the past two years.• The company is growing mainly through investment

securities and other long lived assets.• The company’s primary source of financing occurs from

stock sales.• Cash has increased over the past two years.

Accounting Policies

• Publix is known for always paying with cash. They stay away from paying unneeded interest and rely on their revenues to pay for upcoming stores and events.

• Notes• All of Publix’s debt and marketable equity securities are

classified as available-for-sale. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported as other comprehensive earnings and included as a separate component of stockholders' equity. The cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity.

Financial Analysis and Liquidity Ratios

• Working Capital- $2,029.1 million as of 12/31/05. Current Assets exceed Current Liabilities.

• Current Ratio- 2.89 as of 12/31/05. Publix has $2.48 of current assets for every $1.00 of current liabilities.

• Receivable Turnover- 76.8 as of 12/31/05.• Average days of sales uncollected- Publix turns it

receivables about 76.8 times a year, for an average of 4.75 days.

• Inventory Turnover-23.6 times.• Average days inventory on hand- 15.5 days

Profitability Ratios

• Profit Margin- (.4%) Publix makes about 4 cents on every dollar of net sales

• Asset Turnover- 2.1 times. Publix produces $2.10 cents for each dollar invested in average assets.

• Return on Assets- (3.6%) Publix generated 3.6 cents of net income for each dollar that was invested.

• Return on Equity- (4.1%) Publix earned 4.1 cents for every dollar invested by stockholders.

Solvency Ratio

• Debt to Equity- .7194 (71.94%)• This ratio shows that Publix receives most of it’s

financing from investors rather than creditors.

Market Strength Ratios

• Price/ earnings per share-.328• Dividends yield- .11