James Cash Penny was a brilliant businessman. He started the company in 1902 at the young age of 26. The companyÃÂs primary purpose was to sell products to the public for a profit.
He opened his first store in Wyoming along with two partners. The store was named the Golden Rule and was cash only. Banks advised him against opening a cash only store as these types of stores had a proven failure rate but Mr. Penny went ahead with his original plan and proved the bank wrong in the years to come.
In 1907 Mr. Penny bought out his partners and took over all the stores and by 1912 his company had grown to 34 stores with sales of more than 2 million.
In 1913 Mr. Penny incorporated the business and renamed it as J.C. Penny Inc. The company grew at a fast pace due to the fact that they offered name brands at cheaper prices than other retail stores.
Mr. Penny liked the products he sold because he could manipulate the prices to make the maximum profit for the company.
In 1962 the company expanded its services to include mail orders and by 1970 sales had reached over 5 billion dollars. Mr. Penny passed away at the age of 95.
From 1976 to 1985 the corporation accepting and expanding credit and by 1989 their sales had skyrocketed to 16.1 billion dollars.
In 1995 the company was experiencing a drop in sales due to the increasing competition from other retail stores but by recognizing the problem and revamping their strategy they quickly regained their position as the largest retail store in the US (J.C. Penney Company, Inc, 2008).
Key ratios for J.C. Penny, Sears, and Wall Mart.
Key RatiosJ.C. PennySearsWall MartCurrent Ratio2.191.320.82Inventory Turnover3.463.698.14Asset Turnover1.391.852.29Total Debt to Equity Ratio72.7933.1976.03ROA8.892.588.95ROE per...