Sears, Roebuck And Co.

Sears, Roebuck and Co. was officially developed in 1893. But the company can be traced back to 1886. In this year Richard W. Sears formed the R.W. Sears Watch Company in Minneapolis. A year later, after moving his business to Chicago, Alvah C. Roebuck joined the company as a watch repairman. The named of the company was changed to Sears, Roebuck and Co. in 1893. They made huge profits in this decade with their mail order business. They introduced their mail order catalogue in 1895. This catalogue offered many items including, furniture, sports equipment, and appliances. They decided to sell stocks in the open market in 1901. At this time they became publicly owned. Five years later they started to expand the company by opening offices in various states. It wasn't until almost ten years later that they began to open retail stores. The number of stores went from 1 to 27 stores between the years of 1925 to 1927. Today, there are hundreds of retail stores all around the country. Sears, Roebuck and Co. became one of the top retail companies. After having such a large success rate they took on Allstate Insurance Company as a fully owned subsidiary.

This company is different from it competitors in many ways. The first is how the company originated. They started out as a mail order company and did not form a retail store business until almost ten years later. Another thing that sets them aside is their development of the idea that the store should be set around the merchandise.

Between the years of 1940 to 1970's the company started to spread outside of the United States. They opened stores in Canada and also in Mexico.

The following figures were gathered from the period ending on January 28, 2006:

Current ratio- 147%

Inventory turnover ratio - 542%

Accounts receivable turnover ratio- 49.80

Debt to equity - 0.06

Return on assets - 4.52%

Return on equity- 17% before taxes and 7% after taxes

Gross margin on sales- 28.4%

The figures shown above give us an insight on how well the company is doing financially. They help investors make sound decisions whether they are current stockholders or prospective investors. In this case, I believe that the figures tell us that Sears, Roebuck and Co. is doing well financially. For the stockholder this could mean that it is good time to either buy or hold on to stock. When looking at these figures alongside other historical financial data we could see a pattern. In this case the pattern would suggest that the company is on a good streak for the time being. It can also be anticipated that the Price Earnings ratio will continue to increase.

Financial analysts would be very interested in these ratios. They give them the information to be used when trying to make recommendations to their clients. The ratios would serve as proof to what ever recommendation he would