Reyes Gómez Sánchez

FOOT LOCKER
PRACTICAL WORK FINANCIAL ANALYSIS
Balance sheet & Income Statement
https://www.wsj.com/market-data/quotes/FL/financials/annual/balance-sheet

https://www.wsj.com/market-data/quotes/FL/financials/annual/income-statement

Brief description
Foot Locker is an American multinational dedicated to footwear and sportswear.
Its headquarters are in New York and it operates in more than 20 countries with
about 3,900 franchises. As the main hallmark, its logo and employees wear a
uniform similar to that of the referees in the American sports leagues.
Foot Locker operates as a retailer of athletic footwear and apparel. The
Company operates through two reportable business segments: Athletic Stores,
which is concerned with the operation of the Company’s core chain of retail
stores, as well as its Lady Foot Locker, Kids Foot Locker, Champs Sports,
Footaction, SIX:02, Runners Point Group brands; and Direct-to-Customers,
which is concerned with the Company’s ecommerce businesses, including
www.footlocker.com, and other affiliates – including eastbay.com, final-
score.com, eastbayteamsales.com, and sp24.com – as well as its international
e-commerce businesses, which sell to customers through their Internet and
mobile sites and catalogues.

Financial Analysis
 Financial Balance sheet

YEAR 2019 2020 2021

Acc. Receivable 87.000 100.000 124.000
Stock 1.269.000 1.208.00 923.000
0
-Acc. Payable 387.000 333.000 402.000
Working capital 969.000 975.000 645.000

Banking ST Debt - 518.000 580.000

-Cash 950.000 913.000 1.688.000
Net ST Debt -950.000 -395.000 -1.108.000

Working Capital 969.000 975.000 645.000

Net Fixed Assets 836.000 3.723.000 2.835.000
Net Assets 1.805.000 4.698.000 3.480.000
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Net ST Debt -950.000 -395.000 -1.108.000

LT Debt 124.000 2.800.000 2.507.000
Equity 2.506.000 2.473.000 2.776.000
Net Liabilities 1.680.000 4.878.000 4.175.000

Interpretation of the results: We can see that the working capital over the
years is >0 which means that the operations need finance. What is more,
in 2020 net liabilities were higher than net assets (I assume that this is
because of the pandemic), which shows that the company suffered a
loss in its assets. Net debt shows how much cash would remain if all
debts were paid off and if a company has enough liquidity to meet its
debt obligations. Foot locker has little debt and more cash in the short-
term.

 Analysis-Structure Ratios

Working Capital 54% 21% 18%

Net Fixed Assets 46% 79% 82%
Net Assets 100% 100% 100%

Net ST Debt -56% -8% -27%

LT Debt 7% 57% 60%
Equity 149% 51% 67%
Net Liabilities 100% 100% 100%

Equity 2.506.000 2.473.000 2.776.000

LT Debt 124.000 2.800.000 2.507.000
-Fixed Assets 2.153.000 5.097.000 5.031.000
Fondode maniobra 477.000 176.000 252.000

Interpretation of the results: FM are the permanent resources that the

company has to finance working capital. Foot locker is not into trouble
because FM>0, a usual case. The negative net debt implies that the
company possesses more cash and cash equivalents than its financial
obligations and is hence more financially stable.

 Working capital

2019 2020 2021

Average receivables 95.500 93.500 112.000
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Revenues 7.939.000 8.005.000 7.548.000

AMP Collecting 4 4 5
1 day 21.750€ 21.931€ 20.679€

Average Payables 322.500 360.000 367.500

Purchases 5.580.000 5.580.000 5.256.000
AMP Payment 21 24 26
1 day 15.300€ 15.300€ 14.400€

Average Stock 1.274.000 1.240.000 1.066.000

Cost of sales 5.589.000 5.641.000 5.541.000
AMP Stock 83 80 70
1 day 15.312€ 15.454€ 15.180€

Financial AMP (days) 66 60 49

Interpretation of the results: We can see that the company collects the
money in a mean of 4/5 days, which is pretty short time. But regarding
time of payment and stock, it gets bigger, which means that the company
has bonds with longer maturities.

 Cash flow

“Accounting” Cash Flow 2019 2020 2021

Net profit 541.000 491.000 323.000
Amortizations 4.000 3.000 3.000
Working capital 969.000 975.000 645.000
Inv. Working Capital -157.000 6.000 -330.000
CFO:Bfo+Amort-Inv WK 702.000 488.000 656.000
CFO/Revenue 9% 6% 8,7%

Working capital 2018 acc receivable+stock-acc payable;

106.000+1.278.000-258.000=1.126.000

Net Assets 1.805.000 4.698.000 3.480.000

Increase in net assets -187.000 2.893.000 -1.218.000
Amortization 4.000 3.000 3.000
CFI=-(Inc+Amort) 183.000 -2.896.000 1.215.000
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Net assets 2018working capital+net fixed assets=

1.126.000+866.000=1.992.000

ST Debt - 518.000 580.000

LT Debt 124.000 2.800.00 2.507.000
0
Total Debt 124.000 3.318.00 3.087.000
0
Increase -1.000 3.194.00 -231.000
0
Dividend payments -116.000 -109.000 -105.000
Other changes in capital -13.000 -33.000 303.000
CFF -130.000 3.052.00 -639.000
0

ST Debt 2018 -
LT Debt 2018125.000
Total debt 2018125.000

CFO+CFI+CFF 755.000 644.000 -1.198.000

Cash 950.000 913.000 1.688.000
Cash increase 100.000 -37.000 775.000

Cash 2018850.000

Interpretation of the results: CFO indicates the amount of money a

company brings in from its ongoing, regular business activities. It is
positive and high, so we can say that the company doesn’t expend more
money than it makes. Regarding CFI, it reflects a company's purchases
and sales of capital assets. The chart shows that in 2020, Foot Locker
invested a huge amount of money. It might not be a bad sing if the
company is investing in the long-term.
CFF shows the net flows of cash that are used to fund the company.
Financing activities include transactions involving debt, equity, and
dividends. Debt and equity financing are reflected in the cash flow from
financing section, which varies with the different capital structures,
dividend policies, or debt terms that company has.

Conclusion: As a result of the analysis of the key financial ratios of the

company, the financial condition of Foot Locker in 2021 is much better
than the financial condition of half of all companies engaged in the
activity "Shoe Stores". It is financial stable, and even though the
pandemic, the company invested in the long-term and tried to reassure
their objectives and mission. We can say that the have been really
successful in financial terms.