Factors That Affect Company Profitability in Retail

This paper presents a critical analysis of factors that influence company profitability in the retail industry. The goal was to present four factors that contribute to financial success in three retail leaders in the United States. Those factors include voluntary employee turnover, employee wages, capital spending, and inventory turnover. The four factors were chosen to have a representative range of employee and financial factors. The methodology used for this research was a regression analysis using R Studio and Excel with extracted data from financial reports of three leading United States retailers. The results of this study were mixed among the four factors. Increased wages did not support lower turnover rates among employees. From a financial perspective, capital expenditure and profitability indicate that spending on long-term assets does not always lead to improved financial performance. This study further supports the need for more research on the factors that support profitability in an ever-changing retail industry.