<PAGE>
 
                                                                  Exhibit 12 (a)
                          J. C. Penney Company, Inc.
                         and Consolidated Subsidiaries

      Computation of Ratios of Available Income to Combined Fixed Charges
                   and Preferred Stock Dividend Requirement


<TABLE> 
<CAPTION> 
                                                                                  
                                                           52 Weeks       53 Weeks                  52 Weeks Ended
                                                            Ended          Ended      --------------------------------------------
($ Millions)                                               01/30/99       01/31/98       01/25/97       01/27/96        01/28/95
                                                        -------------  -------------  -------------  --------------  -------------
<S>                                                     <C>            <C>            <C>            <C>             <C>  
Income from continuing operations                            $   914        $   882        $   853         $ 1,285        $ 1,646
      (before income taxes, before
      capitalized interest, but after
      preferred stock dividend)

Fixed charges

Interest (including capitalized interest) on:

      Operating leases                                           225            180            110             102             95
      Short term debt                                            106            121            102             129             92
      Long term debt                                             557            527            312             254            225
      Capital leases                                               4              7              6               6              7
      Other, net                                                   1             (5)            14               1             (1)

                                                        -------------  -------------  -------------  --------------  -------------
Total fixed charges                                              893            830            544             492            418

Preferred stock dividend, before taxes                            37             40             46              48             50
                                                        -------------  -------------  -------------  --------------  -------------
Combined fixed charges and preferred 
      stock dividend requirement                                 930            870            590             540            468

Total available income                                       $ 1,844        $ 1,752        $ 1,443         $ 1,825        $ 2,114
                                                        =============  =============  =============  ==============  =============

Ratio of available income to combined
      fixed charges and preferred stock
      dividend requirement                                       2.0            2.0            2.4             3.4            4.5
                                                        =============  =============  =============  ==============  =============
</TABLE> 


The interest  cost of the LESOP notes  guaranteed by the Company is not included
in fixed charges above. The LESOP notes were repaid in July 1998.