What does the data in Exhibit 2 reveal about the financial situation of Nordstro

Question

What does the data in Exhibit 2 reveal about the financial situation of Nordstrom? p. c379

EXHIBIT 2 Nordstrom, Inc.'s Consolidated Statements of Earnings, Fiscal 2011-Fiscal 2012 (in millions of US$) Year Ended Feb-2-2013 Jan-28-2012 Net sales Credit card revenues Total revenues Cost of sales and related buying and occupancy costs Selling, general and administrative expenses: $11762 $10497 386 380 12148 10877 (7432) (6592) Retail Credit Earnings before interest and income taxes Interest expense, net Earnings before income taxes Income tax expense Net earnings (3166) (205) 1345 (160) 1185 (450) 735 (2807) (229) 1249 (130) 1119 (436) $ 683

Explanation / Answer

The above finanial statement reveals that for two consecutive years Nordstrom Inc has had greater Net sales and a very low Net Income. This means the company needs to manage its expenses. The profit made by the business is being swallowed by the expenses. This simply means, while the comapny is surviving it is not making any money and won't stand in the market for a long time.

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