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JC Penney Company

572 Words3 Pages

Valuation of the cost of goods sold.
Appropriate inventory management is very important to JC Penney since the company’s profit is highly depended on merchandise sales. For its customers, the company should best estimate future sales; otherwise, the company will face loose its potential sales opportunities during a high demanded period or the company will have exceeded inventories and have to sell them in discounts in low demanded period. Especially, the company will have negative impact on its customer loyalty when the company has shortage on its inventories.
It is not that only appropriate inventory management is very important to the company’s profit and customer loyalty, but it is also very important to the company’s investors because JC Penney is a public corporation. Everyone knows that the company’s …show more content…

Sales depend on its inventory management and marketing strategy also sales are not controllable. However, the company can manipulate its cost of goods sold that is able to change its gross profit in a higher level. This may be why the company uses FIFO for its inventory management. We have learned that LIFO is used by companies to defer their income tax payments. In the contrast, the FIFO records costs of inventories at a lower cost compared to LIFO; therefore, companies can provide better-looking financial statements. JC Penney as a retail store, the company must record high sales to proof its value to investors; therefore, it is understandable that the company uses FIFO method for its inventory management. Also, the company sells most of its

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JC PENNEY SWOT ANALYSIS Name of Student Institution affiliation JC PENNEY SWOT ANALYSIS J.C. Penny is one of the largest department stores in United States that was found in the year 1902 by James Cash Penney and William Henry McManus. The company has been able to expand as a result of adapting the golden rule of treating its employees fairly and by having a prudent financial management system. The company believes in providing the best goods and services at a fair price. This company went public in the year 1927, and eventually grew to become one of the well known household names (J. C. Penney Company, Inc, 2013). It was the markets leader together with Kohl’s Corp. and Macy Inc and has a strong brand.

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J. C. Penney Company, Inc. (JCP) is one of America 's largest store department of retailers. In 1902, James Cash Penney established the primary J. C. Penney store of department, initially named The Golden Rule, in the little mining town of Kemmerer in Wyoming. From that moment, J. C. Penney has gotten to be one of the biggest retailers in the discount and department of the retail business in 49 states with 1033 stores including Puerto Rico. Moreover, J. C. Penney works J. C. Penney operates “One of the largest apparel and home furnishing sites on the Internet, jcp.com, and the nation’s largest general merchandise catalog business”

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a) Allocation, Valuation and Accuracy Inventory is a Current Asset in a Balance Sheet. The inventory was valued by using an incorrect code for the more expensive items of inventory. Probably, there is an error or the management was trying to provide a better picture of its financial position. If a misstatement of inventory has occurred there will be an impact on what the company reports as profit. An inaccurate record of inventory will result in the company not knowing its inventory position and not being able to meet customers’ orders.

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This truth be told obstructs the working capital utilized by the organization In any business, it is vital to have ideal stock at all times. Over stock stocking results in disintegration of benefits and increment in stock conveying expenses that impacts the operational expenses of the organization, while lack of stock can prompt loss of business and deals opportunity which won't just result in income misfortune however harm organization's notoriety and unwavering quality in the business and with client.

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