Macys Current Valuation vs. Retained Earnings Fundamental AnalysisMacys is rated below average in retained earnings category among related companies. It is rated below average in current valuation category among related companies reporting about 2.46 of Current Valuation per Retained Earnings. Retained Earnings is a balance sheet account that refers to the portion of company income that is retained by the firm. In other words it is a part of earnings that is not paid out as dividends or otherwise distributed to owners. Retained Earnings are calculated by adding net income to last period retained earnings and subtracting any dividends paid to owners.
Retained Earnings shows how the firm utilizes its profits over time. In simple terms, investors can think of retained earnings as the amount of profit the company has reinvested in the business since its inceptions. However the methodology to make a decision over how much profit to retain is different between companies in different industries. For example growing industries tend to retain more of their earnings than more matured industries as they need more assets investment to sustain their growth.Enterprise Value is a firm valuation proxy that approximates current market value of a company. It is typically used to determine takeover or merger price of a firm. Unlike Market Cap, this measure takes into account the entire liquid asset, outstanding debt, and exotic equity instruments that company has on its balance sheet. When takeover occurs, the parent company will have to assume the target company's liabilities but will take possession of all cash and cash equivalents.
Enterprise Value can be a useful tool to compare companies with different capital structures. Long term liability and current cash or cash equivalents can have a huge impact on market valuation of a given company.Macys is rated below average in current valuation category among related companies. After adjusting for long-term liabilities, total market size of Department Stores industry is now estimated at about 198.07 Billion. Macys holds roughly 15.58 Billion in current valuation claiming about 8% of equities under Department Stores industry.