Here is my report on improving Macy’s profit in sale and asset protection. The report indicates the rise and possible improvements in the sales and profits of the said company. It also indicates the policies that can be put in place to ensure that the profits and sales rise further to achieve the organizational goals.
In my course of work, I have learned a great deal about the trends and operational methods used in corporations that deal with sales and asset protection. In this report, I discuss the viable ways of improving sales and asset protection and how operations can be conducted at Macy Company to improve sales and asset protection capabilities.
I believe my findings will give the stakeholders the necessary information they might need in order to expand and put in place the measures they need for the sales improvement. For this reason, I recommend that the findings herein should be put into consideration and should be published if possible so as to enable the organizational goals be achieved. I enjoyed my work on this project and would be happy to offer any assistance in form of questions, answers or any other form of assistance if need be.
The report indicates Macy’s profit in sales and asset protection and the possible ways of increasing sales and profits.
Increasing the Operating Income
The operating income of Macy’s amounted to about 4.3% of the total sales in the first quarter of 2018. Operating income totaled to $257million excluding impairment and other costs. The company anticipates recognizing additional charges to maximize sales. The nature of the sales and asset protection organizations requires a reduction in the operational incomes to maximize the sales and profits. The organization spends a lot in operations, which makes the operational income high.
The net cash flow in the enterprise was estimated to be $322 million. The net cash used in investments should be higher to increase the investment opportunities to increase the sales and maximize the profits eventually. The net cash used in investing in the first quarter of 2018 was approximately $ 156 million compared to that used in financing activities, which was approximately $99 million.
The company is set to open branches in other countries such as China to increase sales and profits. It also plans to exploit the operation of social media platforms to increase the marketing opportunities and as such increase sales.
The company expects adjusted earnings per diluted share, and this excludes settlement charges related to the companies defined benefit plans as well as impairment and other costs.
Increased Profit in Sales and Asset Protection
Macy’s has some opportunities for increasing profits in sales and asset protection.
- Venturing into different nations and other social media platforms to increase consumer awareness and to increase the sales.
- Increasing the operating income to increase the number of funds in circulation within the organization. Doing so would promote investment thus increase the opportunities for investments for more profits and more assets.
- Raising earnings to increase the motivation of the employees and subsequently the earnings of the organization.
These changes can bring about the anticipated increase in profits and sales. However, in the short run, the changes may create a bad image or decrease morale, but then in the long-run, they will deliver the desired change.
Improving Macy’s Profit in Sale and Asset Protection
The management has authorized research to be conducted and the findings communicated to the company’s stakeholders to improve Macy’s profits in sales and asset protection. This report indicates the available profits and assets, sales of the company at the current time, and the reasons for the call of increased profits and sales of the company due to the diminishing report. The firm’s first quarter report on business and profits revealed to management that the company did not realize its goals hence the need for knowing and working with different strategies to increase sales (Macy’s Inc., 2017). This need is the rationale for the present research, whose findings are to be communicated to key stakeholders.
The data I used for this report comes from various sources linked to the company. They include literature writings about the organization, government reports, and other documentation, among them journals, brochures, and online sources. In preparing this report, the accounting and statistical departments’ figures are strongly adhered to and the values that correspond to them clearly stated. Therefore, the report shows the values and statistics that can help in profit and sales maximization.
The analysis is constituted of the following areas: the sales values and amounts in the first quarter of this year, the amount of money in operation in the first quarter of this year, The sales in the same quarter and in the previous years, the net income, the cash flow and the forward planning which includes increase in earnings and increase in investments which includes the opening up of new branches and the social media platforms that can be used to increase the sales. However, it does not cover the global sales rates, government intervention and other issues such as employee relations, methods of operation and the ways in which income in circulation can be increased. Social media platforms that can be used to increase sales will not be discussed also in this report.
I interviewed various people, such as employees, government officials, and other stakeholders. I had to leave out some people due to limited resources such as time. However, I am certain that the report has all the required information that will allow the objective of the report to be reached hence it is good enough.
Increasing the Operational Income
The operating income for the first quarter of 2018 were $238 million, 4.3 percent of sales compared to $219 million (Macy’s Inc., 2018), 4.1 percent of sales, for the first quarter of 2017.
The nature of the sales and asset protection organizations requires the reduction in the operational incomes so as to maximize the sales and profits. The organization spends so much in operations and thus this makes the operational income to be high. When the operational incomes are high, it means that the company spends so much in the operations and thus increases its total expenditures. Subsequently, this leads to lower profits compared to when the operational costs are low.
Figure 1: Macy’s Operational and Sales Report for 2017 and 2018
Figure 1notes the operating income in millions and the sale in the form of percentages. The percentage of sales is 100% whereas the operating income is noted in millions of the total sales. The total sales are more than the operating income as the operating income is reflective of the profit margins of the company. In this case, the operating income in 2018 is slightly lower than that of 2017, showing a slight reduction in the amount used in the daily operations. This may mean an increase in profits to some extent.
Net cash provided by operating activities was $322 million in the first quarter of 2018, compared to $237 million in the first quarter of the last year. Net cash used in investing activities in the first quarter of 2018 was $156 million, compared with $60 million a year ago. Net cash utilized in financing activities in the first quarter of 2018 was $99 million, compared to $273 million used in 2017 (Macy’s Inc., 2018a). The cash flow determines the number of investments given that; when higher amounts of cash are in circulation, higher investment levels are realized; therefore, the assets increase leading to a greater income amount from the investments.
The above information is summarized in Table 1.
Table 1: Cash flows for 2017 and 2018
The cash flow in 2017 was higher than that of 2018. As such, the amount of money in circulation was higher in 2017 leading to a higher level of investment and subsequently higher profits compared to 2018 (R.H. Macy & Co., Inc., 2018). The lower amount of cash in circulation in 2018 implies reduced levels of investment leading to reduced sales and subsequently reduced profits. This should be offset by increasing the amount of money in circulation to bring about a lot of investment and augment profitability.
Conclusion and Recommendations
The report indicates the sales and the profits of Macy’s organization in a specified period. It clearly states the findings that relate to the company, including its performance in sales and profits. Additionally, it indicates the trends and improvements that need to be done to foster greater profitability. The sales should be enhanced to increase the profits and realize the goals and objectives of the firm. The firm should consider important factors such as the operating income, cash flow, and readiness for expansion of the specified areas of concern to be rectified to enable the stakeholders to make the necessary decisions to increase the profits and the profits. The question as to whether the required amendment can be made should be answered through the findings and should be posed to foster the improvement of operational efficiency. The outlined findings are important and should be considered for the future upgrading of the company.
Due to the problems that may be facing the organization, various plans were proposed to help Macy’s increase its sales and profits. The efficiency of the different recommendations in boosting sales and profitability will however depend on the implementation efficiency. Most of the recommendations are only effective when used in combination with others. For instance, having a financial advisor cannot help to improve sales independently without marketing. The objective of focusing on sales is that through increased revenue, the marginal profits also increase. The role of implementing these recommendations is assigned to the management. The following recommendations can be of help in this case.
- Appoint a research and development team that will conduct research on available markets for the company’s products and monitor the organizational performance in different markets for improvement purposes (Dizon, 2018).
- The company should also employ a financial advisor who will help in coming up with ways to control the increase in funds in circulation.
- Increase the number of sales representatives to aid in product promotion to increase the number of sales for the organization.
- Employ an IT expert to help the organization in advertising and online marketing to increase sales.
- The company could also use various marketing approaches to enhance sales and profitability of the organization. A combination of push and pull strategies can be very effective in ensuring that the company attracts new customers and also retains existing customers.
In case the above recommendations are put in place, the company will experience a positive shift in the sales and an increase in the number of profits realized. Such a course would lead to the realization of the goals of the company hence enabling Macy’s to compete efficiently globally rather than in the local scenario in which it currently operates. The costs of performing these recommendations are a bit economical, and therefore the company can manage to perform them.
The findings of this report indicate that the company’s performance in terms of profitability is reducing. The company needs to take various measures to ensure that it improves its performance and does not reach its dissolution. Various recommendations have been made on how to improve its sales and subsequently its profits to accomplish the mentioned. The corporation is consequently advised to consider the mentioned recommendations for it to improve.
Dizon, A. (2018). How to increase sales- 25 tips from the pros. Fit Small Business. Retrieved from fitsmallbusiness.com/how-to-increase-sales-tips/
Macy’s, Inc. (2017). Factbook. Investor Relations Solutions. Retrieved from phx.corporate-ir.net/External.File?item…t=1&cb=636307271238902436
Macy’s, Inc. (2018). Reports first quarter 2018 earnings. Business Wire. Retrieved from Macy’s, Inc. Reports First Quarter 2018 Earnings
Macy’s, Inc. (2018a). Reports second quarter 2018 earnings. Business Wire. Retrieved from www.businesswire.com/news/home/20180815005315/en/Macy%E2%80%99s-Reports-Quarter-2018-Earnings
R.H. Macy & Co., Inc. (2018). Company profile, information, business description, history, background information on R.H. Macy & Co., Inc. Reference for Business. Retrieved from www.referenceforbusiness.com/history2/43/R-H-Macy-Co-Inc.html