Whole Foods Financial Analysis

By examining the financial statements of Whole Foods it is clear that this company is moving in the right direction. Almost all the ratios that were calculated indicate that Whole Foods is growing as a business. Gross Profit Margin was 34.30% in 2009 and now it is looking at a 1.54% increase to 35.84% in 2013. This shows that the margin between the cost of their goods and their sales prices are increasing which drives profits higher. This increase in GP margin can also be seen by looking at the CAGR of Revenue, which has increased from 5.89% in 2010 to about 10% in 2013. Also, to go along with GP margin increase, the Net Profit Margin is also seeing a healthy increase from 1.83% in 2009 to 4.27% in 2013. This drives income as well and the effects can be seen with an increase to Net Income every year. The contribution margin is also increasing, from 7.57% in 2009 to 10.40% in 2013. This increase has factored into the increase in Net Profit margin because it is showing that the Whole Foods stores are either increasing the selling prices of their products or that they are becoming more efficient and lowering their variable costs in order to sell them. The result of increasing selling prices or lowering variable costs is the increase of profits which occurs every year. There is only one ratio that saw a decrease and that was the CAGR of Assets in 2013. The growth rate of assets started at 2.66% in 2010 and was raising to 8.76% in 2012 before falling slightly to 7.92% in 2013. This slight decrease may be because of the amount of net working capital that rose so high in 2012 before lowering to a more reasonable amount in 2013. Other evidence that support this is the fact that ROA has increase by at least 1% every year. Starting at 3.89% in 2009 and reaching 9.95% in 2013. Once again, this is showing that Whole Foods is increasing their efficiency every year and are able to make more money off of their assets which can be seen in the general increase in all of their profitability