Zale (FRA:ZLC) Net-Net Working Capital : €-10.32 (As of Jan. 2014)

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What is Zale Net-Net Working Capital?

In calculating the Net-Net Working Capital (NNWC), Benjamin Graham assumed that a company's accounts receivable is only worth 75% its value, its inventory is only worth 50% of its value, but its liabilities have to be paid in full. In addition, Graham believed that preferred stock belongs on the liability side of the balance sheet, not as part of capital and surplus. This is a conservative way of estimating the company's value.

Zale's Net-Net Working Capital for the quarter that ended in Jan. 2014 was €-10.32.

The industry rank for Zale's Net-Net Working Capital or its related term are showing as below:

FRA:ZLC's Price-to-Net-Net-Working-Capital is not ranked ^*
in the Retail - Cyclical industry.
Industry Median: 5.6
* Ranked among companies with meaningful Price-to-Net-Net-Working-Capital only.

Zale Net-Net Working Capital Historical Data

The historical data trend for Zale's Net-Net Working Capital can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Zale Net-Net Working Capital Chart

Zale Annual Data

Trend

Jul04

Jul05

Jul06

Jul07

Jul08

Jul09

Jul10

Jul11

Jul12

Jul13

Net-Net Working Capital

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-10.28

-11.56

-12.69

-15.07

-11.21

Zale Quarterly Data
	Apr09	Jul09	Oct09	Jan10	Apr10	Jul10	Oct10	Jan11	Apr11	Jul11	Oct11	Jan12	Apr12	Jul12	Oct12	Jan13	Apr13	Jul13	Oct13	Jan14
Net-Net Working Capital	Get a 7-Day Free Trial															-11.69	-11.86	-10.58	-15.70	-10.32

Competitive Comparison of Zale's Net-Net Working Capital

For the Luxury Goods subindustry, Zale's Price-to-Net-Net-Working-Capital, along with its competitors' market caps and Price-to-Net-Net-Working-Capital data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Zale's Price-to-Net-Net-Working-Capital Distribution in the Retail - Cyclical Industry

For the Retail - Cyclical industry and Consumer Cyclical sector, Zale's Price-to-Net-Net-Working-Capital distribution charts can be found below:

* The bar in red indicates where Zale's Price-to-Net-Net-Working-Capital falls into.

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Zale Net-Net Working Capital Calculation

Zale's Net-Net Working Capital (NNWC) per share for the fiscal year that ended in Jul. 2013 is calculated as

	Net-Net Working Capital		(A: Jul. 2013 )
=	(Cash, Cash Equivalents, Marketable Securities	+	0.75 * Accounts Receivable	+	0.5 * Total Inventories	-	Total Liabilities
-	Preferred Stock	-	Minority Interest)	/	Shares Outstanding (EOP)
=	(13.034	+	0.75 * 0	+	0.5 * 586.401	-	765.472
-	0	-	0)	/	40.958
=	-11.21

Zale's Net-Net Working Capital (NNWC) per share for the quarter that ended in Jan. 2014 is calculated as

	Net-Net Working Capital		(Q: Jan. 2014 )
=	(Cash, Cash Equivalents, Marketable Securities	+	0.75 * Accounts Receivable	+	0.5 * Total Inventories	-	Total Liabilities
-	Preferred Stock	-	Minority Interest)	/	Shares Outstanding (EOP)
=	(17.066	+	0.75 * 0	+	0.5 * 634.378	-	799.055
-	0	-	0)	/	45.022
=	-10.32

In addition, Graham believed that preferred stock belongs on the liability side of the balance sheet, not as part of capital and surplus. In "Security Analysis", preferred stock is dubbed "an imperfect creditorship position" that is best placed on the balance sheet alongside funded debt.

This is a conservative way of estimating the company's value.

Zale (FRA:ZLC) Net-Net Working Capital Explanation

One research study, covering the years 1970 through 1983 showed that portfolios picked at the beginning of each year, and held for one year, returned 29.4 percent, on average, over the 13-year period, compared to 11.5 percent for the S&P 500 Index. Other studies of Graham's strategy produced similar results.

Benjamin Graham looked for companies whose market values were less than two-thirds of their net-net value. They are collected under our Net-Net screener.

Zale Net-Net Working Capital Related Terms

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Zale Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » Zale Corp (FRA:ZLC) » Definitions » Net-Net Working Capital

Comparable Companies

Traded in Other Exchanges

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Address

Website

http://www.zalecorp.com

Zale Corporation was incorporated in Delaware in 1993. The company is a specialty retailer of fine jewelry in North America. At July 31, 2012, it operated 1,124 specialty retail jewelry stores and 654 kiosks located mainly in shopping malls throughout the United States, Canada and Puerto Rico. It report its operations under three business segments: Fine Jewelry, Kiosk Jewelry and All Other. Fine Jewelry is comprised of five brands, predominantly focused on the value-oriented consumer as its core guest target. Each brand specializes in fine jewelry and watches, with merchandise and marketing emphasis focused on diamond products. Zales Jewelers is its national brand in the U.S. providing moderately priced jewelry to a broad range of guests. Zales Outlet operates in outlet malls and neighborhood power centers and capitalizes on Zales Jewelers' national advertising and brand recognition. Gordon's Jewelers is a value-oriented regional jeweler. Peoples Jewellers, Canada's largest fine jewelry retailer, provides guests with an affordable assortment and an accessible shopping experience. Mappins Jewellers offers Canadian guests a broad selection of merchandise from engagement rings to fashionable and contemporary fine jewelry. Kiosk Jewelry operates under the brand names Piercing Pagoda, Plumb Gold, and Silver and Gold Connection (collectively, 'Piercing Pagoda') through mall-based kiosks, and is focused on the opening price point jewelry guest. Its presence in Kiosk Jewelry has been expanded through the e-commerce site, www.pagoda.com. Internet sales totaled $1.9 million in fiscal year 2012 compared to $1.4 million in fiscal year 2011. It also offers its guests the option to purchase warranty coverage on certain products. At July 31, 2012, Piercing Pagoda operated 654 locations in 41 states and Puerto Rico, sales from which accounted for 13 percent of its total revenues in fiscal year 2012. It provides insurance and reinsurance services for various types of insurance coverage, which are marketed primarily to its private label credit card guests, through Zale Indemnity Company, Zale Life Insurance Company and Jewel Re-Insurance Ltd. These three companies are the insurers (either through direct written or reinsurance contracts) of its guests' credit insurance coverage. In addition to providing merchandise replacement coverage for certain perils, credit insurance coverage provides protection to the creditor and cardholder for losses associated with the disability, involuntary unemployment, leave of absence or death of the cardholder.

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