Case Study Kroger

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The earnings to fixed charges ratio explains how well a company’s earnings will cover its fixed charges. The higher this number the better for Kroger. Kroger had an earnings to fixed charges ratio of 4.4 (Kroger’s earnings were 4.4 times greater than their fixed costs), which is the second lowest among this group of four. They have less financial flexibility than both Walmart and Target, who had 7.2 And 5.90 respectively. Kroger has the lowest gross margin of the group of four studied here. Gross margin percentage represents the amount of money on each dollar of sales that a company retains to pay for other costs. Having the lowest gross margin is an inherent disadvantage for Kroger in this case, meaning they must sell a larger quantity than
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