A Comparison of performance ratio on the basis of financial terms.

1. Companies Introduction
Kraft Foods:
Kraft is by far the best and well known food company. Kraft Foods Inc. is engaged in the
manufacture and sale of branded foods and beverages in the United States, Canada, Europe,
Latin America, Asia Pacific, the Middle East and Africa. Kraft Foods, Inc., is the largest branded
food and beverage company headquartered in the U.S. and the second largest in the world.
Consumers of all ages around the world enjoy their brands across the entire spectrum of food
and beverage occasions: breakfast, lunch, dinner and snacks.
Whole Foods Market:
Whole Foods Market is the world’s leading natural and organic foods supermarket. From
the fairly humble beginning of being a one-store entrepreneur, John Mackey has seen his 1978
Safer Way grocery store grow into an $8 billion a year corporation. Two years after opening his
SaferWay store, John Mackey merged with Clarksville Natural Grocery in Austin, Texas. This
resulted in the opening of the original Whole foods Market in 1980. Whole Foods made the U. S
Environmental Protection Agency’s list of the “Top 25 Green Power Partners” with such efforts
as: eliminating plastic, working to ensure the humane treatment of animals, protection of the
fishing industry, and offsetting its energy costs through wind power credits (Hartwig, 2007).
Companies Data
As on 2013
Companies:
Kraft Companies
As on Dec 28,2013
Whole Foods Market
As on Sep 29,2013
In millionsexcept, pershare rate
SR# Particulars $ $
1 CurrentAssets 4,908 1,980
2 Currentliabilities 3,410 1,088
3 Total Assets 23,148 5,538
4 Long TermDebts 9,976 27
5 Inventories 1,616 4,14
6 Total Equity 5,187 3,878
7 Basic Earningspershare 4.55 1.48
8 Market value pershare 52.29 58.33
9 CommonStockholders 596,843,449 shares 371.2 million shares

2. Ratio Analysis
1. Price EarningsRatio:
A valuationratioof a company’scurrentshare price compared toits pershare earnings.
Price earnings ratiomeasuresthe amountthatinvestorsare willingtopayforeach dollar of a
firm’searningsthe higherthe profitearnings(P/E) ratio,the greaterthe investorconfidence.
The price/ earningsratioiscommonlyusedtoassessthe owners’appraisal of share value. Price
earningsratioshowsthe multipleof earningsatwhicha stocksells.
Formula:
P/E ratio = Market value per share ÷ Earning per share
CompaniesAnalysis
Kraft Foods Whole FoodsMarket
P/E RATIO= $52.29/$4.55
= $11.49
P/E RATIO= $58.33/$1.48
= $39.41
2. Debt to EquityRatio:
A measure of a company’sfinancial leverage calculatedbydividingitstotal liabilitiesby
stockholders’ equity.Itindicateswhatproportionof equityanddebtthe companyisusingto
finance itsassets. The debttoequityratio isa measure of the relationshipbetweenthe capital
contributedby the creditors andthe capital contributedby shareholders.Italsoshowsthe
extenttowhichshareholders’equitycanfulfill acompany’sobligationstocreditorsinthe event
of a liquidation.
Formula:
Debt to Equity Ratio= Total long term debt ÷ Total Equity
Companies Analysis
Kraft Foods Whole FoodsMarket
Debtto EquityRatio= $9976/$5187
= $1.92 *100
= 192%
Debtto EquityRatio= $2700/$3878
= $69.62*100
= 70%
3. Current Ratio:
The current ratio,one of the mostcommonlycitedfinancial ratios,measure the firm’s
abilitytomeetitsshort termobligations. A measure of liquiditycalculatedbydividingthe firm’s
currentassetsby itscurrent liabilities.A highercurrentratioindicatesagreaterdegree of
liquidity. The currentratiocan give a sense of the efficiencyof acompany’soperatingcycle its
abilityitturnitsproduct intocash.
Formula:
Current Ratio= Current assets ÷ Currentliabilities

3. Companies Analysis
Kraft Foods Whole FoodsMarket
CurrentRatio= $4908/$3410
= 1.4: 1
CurrentRatio= $1980/$1088
= 1.8: 1
4. Quick Ratio:
The quick (acid-test) ratio is similar to the current ratio except that it excludes inventory,
which is generally the least liquid current asset. A measure of liquidity calculated by
dividing the firm’s current assets minus inventory by its current liabilities. An indicator of a
company’s short term liquidity. The quick ratio measures a company’s ability to meet its
short term obligations with its most liquid assets.
Formula:
Quick Ratio= Current assets – Inventory
Current liabilities
Companies Analysis
Kraft Foods Whole FoodsMarket
Quick Ratio= $4908 - $1616
$3410
= 0.96: 1
Quick Ratio= $1980 - $414
$ 1088
= 104: 1
5. EPS(Earning Per Share):
The portion of a company’s profit allocated to each outstanding share of common
stock. The firm’s earnings per share (EPS) is generally of interest to present or prospective
stockholders and management. EPS (earning per share) represents the number of dollars
earned during the period on behalf of each outstanding share of common stock. Earnings
per share serves as an indicator of a company’s profitability.
Formula:
EPS (Earning per Share) = Net Income – Dividends on preferred stock
Average outstanding shares
Or
EPS (Earning per Share) = Earnings available for common stockholders ÷ Number of shares of
common stock Outstanding
Companies Analysis
Kraft Foods Whole FoodsMarket
EPS (Earning per Share)=$2,715,000,000/596,843,449
=$4.55
EPS (Earning per Share)= $551/371.2
= $ 1.48

4. Comparison of Attributes
In the eyes of all above discussed calculations and values, Whole Foods Market proves its financial
condition strong than Kraft Foods Ltd. Although at some points Kraft Foods shows stable and
productive values but as a whole view, its overall functionality proves not as stable and productive
as Whole Foods Market. Given below statistics proves it:
Ratios Kraft Foods Ltd. Whole Foods Market Inc.
Price earnings ratio $ 11.49 $39.4
Debt to equity ratio 192% 70%
Current Ratio 1.4:1 1.8:1
Quick Ratio 0.9:1 1.4:1
Earning per share $4.55 $1.48
 The price earningsratio,whicheveryinvestorattentivelynotice inordertomake decisionto
make investmentornot,is higherinWhole Foodsmarket,soitisclear bycomparingthat Kraft
FoodsLtd needtowork outfor the growth of itsearnings. Price earningsratioof Whole Foods
Market is $39.4
 Debtto equityratio consideredperfect whenitshowsthe resultof 50% fromapplyingthe debt
to equityformulaon company’s values.KraftFoodslimitedresultsshowing192% debtsto
equityandincomparisonof it Whole FoodsMarketonlyresponsible for70% debtsto equity.
 Currentratioreflectsaboutthe balancingof currentassetsand liabilities. WholeFoodsMarket
provesmore liquiditytoliabilitiesasitgot 1.8:1 comparedto 1.4:1.
 ConferringtoquickratioanalysisWhole FoodsMarketshowsmore liquidityascompare toKraft
Foods.KraftFoodspossesslowerliquiditypowertomeetfunctionsof liquiditynature in
company because the analysisshowsthe resultsof 0.9:1 whichclearlydescribesthatquickratio
resultislow.QuickratioanalysisisstronginWhole FoodsMarket,whichis 1.4:1.
 Earningper share analysisshowsthatKraftFoodscan earn more as pershare,as comparedto
Whole FoodsMarket.Whichis a good signforKraft Foodsinsense of profitabilityand
development.SoKraftFoods’stockholdersearningmore profitfromthe Whole FoodsMarkets’
stockholders.InEPSratiothe whole Earningsavailableforstockholdersdividedintoall
outstandingshareholdersandgivesthe pershare earningview,whichisstronginKraftFoods.
Conclusion
Ratio analysis of both companies clears that Whole Foods Market is strong in earning per price,
debts payments, liquidity and in quick ratio analysis except earnings per share which is $1.48 as
compared to $4.55. But as a whole, on the basis of all five ratios which describes about both
companies debt payment power on the basis of equity, earnings ,assets compared to liabilities,
quick ratio to meet daily payments, whole Foods Market looks more stable in four of all discussed.

5. References
https://www.sec.gov/Archives/edgar/data/1545158/000154515814000003/krft10-k122813.htm
https://www.sec.gov/Archives/edgar/data/865436/000086543613000134/wfm10k2013.htm
http://www.nasdaq.com/symbol/wfm/historical
dept.sfcollege.edu/business/susan.crosson/.../twAnnual%20Report.ppt
www.aabri.com/manuscripts/09288.pdf