Individual Case Analysis 2
1. How aggressively should TJX expand globally, and where, and when, to maximize the value
of the company for shareholders?
TJX is continuing to grow as a company globally. They are in nine countries and
three continents and are one of the few large U.S retailers to have grown successfully
internationally (Global Growth, 2017). The company has made serious strides ahead in
terms of growth and success. As of July, 2017, the company had more than 3900 stores
with a potential to expand by 40% up to 5600 stores long term with just its current stores
and current markets alone (Global Growth, 2017). TJX is Canada’s premier off-price
retailer, and is projected to grow to 500 stores in Canada. TJX has a significant presence
in Europe with stores in countries such as Germany, Poland, Austria, and the Netherlands
(Global Growth, 2017). They also have a presence in Australia, and the potential for
international growth is great.
In terms of global expansion, the projection is 1100 stores internationally. This
estimate reflects the potential growth by opening 975 stores in the European market, and
125 stores in Australia (Global Growth, 2017). The somewhat aggressive global
expansion should begin in 2018. The company is already successful on an international
scale, but moving forward, the future looks promising for the company. The next move
for TJX should be in Latin America and other European countries. Developing countries
like India and China have large consumer bases with preferences but are also price
sensitive. TJX should concentrate on developing markets with new product ranges and an
affordable product price for customers, which the company already tends to lean toward.
In terms of maximizing shareholder value, the company should focus on
delivering superior financial returns and generating large amounts of cash. TJX should
2
Individual Case Analysis 2
also reinvest its generated revenues to expand into global markets and produce new
products, as well as offer buyback and investing options to return value to shareholders.
2. Develop Projected Financial Statements that fully assess and evaluate the impact of the
proposed strategy. This should include a statement of cash flows, income statement, balance
sheet, as well as the applicable ratios, and EPS/EBIT analysis. (2 years of historical data & 3-
4 years of projections)
Income statement
Report date Feb-14 Feb-15 Feb-16 Feb-17 Feb-18
Revenue 27,423 29,078 43617 65425.5
98138.2
5
cost of sales 19,605 20,777
22019.0
6
23335.3
8
24730.3
8
operating
expense 4468 4,712
4969.32
5
5240.70
3 5526.9
EBIT 3,350 3,589 16,629 36,849 67,881
Interest 31 40 51.6129
66.5972
9
85.9319
9
EBT 3,319 3,549 16,577 36,783 67,795
Tax
1181.56
4
1263.44
4
5901.41
2
13094.6
8
24135.0
3
Net income 2,137 2,286 10,676 23,688 43,660
Balance sheet
Column1
Column
2
Column
3 Column4 Column5 Column6
Report date Feb-14 Feb-15 Feb-16 Feb-17 Feb-18
Assets
Cash and equivalents 2,149 2,494
2894.3862
3
3359.0503
7 3898.3116
Account receivables 210 283 381.37619
513.94981
9
692.60856
5
Inventories 2,967 3218 3490.2339 3785.4980 4105.7407
3
Individual Case Analysis 2
1 5 2
Other current assets 742 720
698.65229
1
677.93753
3
657.83695
9
Total current assets 6,068 6,715
7430.9863
2
8223.3146
3
9100.1248
7
Property, plant, and
equipment 3,595 3,868
4161.7312
9
4477.7681
9
4817.8045
5
Goodwill and intangibles 313 310
307.02875
4
304.08598
6
301.17142
4
Other assets 225 235
245.44444
4
256.35308
6
267.74655
7
Total assets 10,201 11,128
12139.239
7
13242.374
2
14445.754
3
Liabilities
Accounts payables 1,771 2008
2276.7159
8
2581.3922
6
2926.8411
4
Other current liabilities 1,747 1922
2114.5300
5
2326.3461
7
2559.3802
7
Total current liabilities 3,518 3930
4390.2501
4 4904.4011 5478.7653
Long-term debt 1,274 1624
2070.1538
5
2638.8774
3
3363.8437
6
Other liabilities 1,179 1310
1455.5555
6
1617.2839
5
1796.9821
7
Total liabilities 5,971 6864
7890.5536
8
9070.6348
1
10427.204
4
Common stock 705 685
665.56737
6
646.68603
2
628.34032
9
Retained earnings 3,724 4134
4589.1396
3
5094.3886
3
5655.2638
5
Other equity -200 -554 -1534.58
-
4250.7866
-
11774.679
Paid in capital
Total equity 4,230 4,264
4298.2732
9
4332.8220
5
4367.6485
2
Total liabilities & equity 10, 201 11, 128
12139.239
7
13242.374
2
14445.754
3
4
Individual Case Analysis 2
EPS EBIT Analysis
Common Stock
Financing Debt
Financing
Year 2016
year
2017
year
2018
EBIT $16,629 $16,629 36849 36849 67881 67881
Interest $0 $52 0 67 87
EBT $16,629 $16,577 $36,849 $36,782 $67,881 $67,794
Taxes $5,901 $5,901 13095 13095 24135 24135
EAT $10,728 $10,676 $23,754 $23,687 $43,746 $43,659
# Shares $3,000 $1,500 3000 1500 3000 1500
EPS 3.58 7.12 7.92 15.79 14.58 29.11
5
