TJX is a 45 -year- old company that deals with clothes and home fashion. The company was initially founded in the United States, but it has expanded over the years to nine countries having about 4500 physical stores and online businesses. In 2020, the company was ranked position 80 in the 2020 Fortune 500 company listings due to its excellent financial performance over the year. The positive attitude to the market dynamics enabled the company overcome the coronavirus pandemic ("TJX | 2020 Fortune 500", 2021) . The company offers its goods at off-price discounts that make its products more desirable to consumers.
TJX faces cutthroat competition from global brands such as the Target Company and Bath Bed and Beyond. TJX has overcome the competition by offering fast-moving household goods at off-price discounts. The company has embraced a unique sales strategy that takes advantage of the Economies of scale to obtain supplies at low prices ("TJX | 2020 Fortune 500", 2021) . The low cost of goods for sale translates to affordable selling prices that attract many customers. The company’s global presence allows it to source its items from any part of the world at attractive discounts. TJX also maintains good relationships with the suppliers, which gives it more bargaining powers for better deals (Sovaniski & Mohd Ali, 2021) . Customers are thrilled by the low cost yet quality goods from TJX, making them have brand loyalty.
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The company’s historical financial data reveals a steady growth of sales volumes over the past five years. The revenue has grown with an annual increment of $3,000,000 since 2016 ("Yahoo is now a part of Verizon Media", 2021 ). The net profits have improved significantly from 2015, after which they reduced slightly in 2016 and 2017 and rose again between 2017 and 2020. Even amid the pandemic, TJX recorded a positive change in net profits. The company embraced the market changes and adjusted well by opening up more e-commerce businesses. However, the gross, net and EBIT margins have decreased slightly over the years due to a higher percentage increase in sales volumes than the profit values.
TJX has a solid balance sheet with an enormous total assets figure that surpasses the total liabilities. The cash to assets ratio is 13 percent, revealing that many assets are fixed assets. The working capital is at $1,740,375.00 , and the current ratio is 1.24, which means that the company can carry its daily operations and there is enough capital to service short term debt ("Annual Report | TJX.com", 2021) . The company has moderate leverage because the debt-to-equity ratio is at 75%. The short-term debt is at $4,477,690.00 , while the long-term debt stands at $2,236,625.00 , according to the 2020 balance sheet. The interest coverage ratio is 437.86, which means that the operating profit is enough to repay the yearly interest liabilities (Krylov, 2021) . The TJX operating cash flow grew from $4,088,459 in 2019 to 4,066,540 in 2020 ("Annual Report | TJX.com", 2021) . The company has also been issuing capital stock every year and dividends paid to shareholders as well.
The TJX share price at the beginning of March was at $66.66 and was declined to $66.52 as at the close of 22 March 2021. The share price curve indicates an upward trend with slight fluctuations in a few days. The prices have improved from $55 in June 2020 to $71.14 as at 18 May and declined to $67.71 as of 27 May 2021. The market cap was 80.74 Billion dollars as at March 2021. The share price at 52-week is high and attractive to investors because it is a potentially profitable investment. From the TJX financial, the company is performing excellently even amid the crisis, and its future is bright.
References
Annual Report | TJX.com. (2021). Retrieved 27 May 2021, from https://www.tjx.com/investors/financial-information/annual-report
Krylov, S. (2021). The Content of Contemporary Analysis of Financial Statements. SSRN Electronic Journal . doi: 10.2139/ssrn.3845542
Sovaniski, T., & Mohd Ali, B. (2021). The Financial Statements Analysis. SSRN Electronic Journal . doi: 10.2139/ssrn.3794864
TJX | 2020 Fortune 500. (2021). Retrieved 27 May 2021, from https://fortune.com/company/tjx/fortune500/
Yahoo is now a part of Verizon Media. (2021). Retrieved 27 May 2021, from https://finance.yahoo.com/quote/tjx/financials/
