Introduction Gap, operates as an apparel retail company worldwide. It offers apparel, accessories, and personal care products for men, women, and children. The company was founded in 1969 and is headquartered in San Francisco, California. In order to analyze its performance, the following financial ratios have been used and compared to the average of the industry and its main competitors (Ralph Lauren, H&M, Aeropostale and American Eagles Outfitters). Leverage After calculating the debt-equity ratio of GAP, we realize that her amount of financial leverage has increased considerably during the year of 2011. In the beginning of 2011, the leverage of the company could suggest a conservative management unwilling to take risks. On the other hand, in the beginning of 2012 things have changed and GAP took more risks, becoming healthier and having like this an equal mix of debt and equity in the other 4 years. If compared to it’s competitors is possible to see that GAP have a more constant financial leverage. As we can see in the ratio analysis Ralph Lauren, one of its main competitors, has...
Grand Metropolitan PLC is the world’s largest wine and spirits seller. It mainly operated in London, USA. In 1991, it beats market expectation with a 4.8% increase in pretax profits, and the company Chairman stated that company’s goal “to constantly improve on”. Despite the great performance in the world recession in 1991, the price of GrandMet shares was 10% below the average price/earnings ratio of the companies in the Standard & Poor’s 500 index. And more important, rumors had that GrandMet, valued at more than $14 billion in the stock market, maybe a takeover target. The management dilemma is to understand why the company’s stock is traded below of what considered being the right price and whether the company is truly being undervalued by the market or there are consistent issues with negative NPV projects and lines of businesses.
Home Depot and Lowe's are two home improvement chains in the United States. Home Depot is the leading company in this industry followed by Lowe's as the second largest. This paper uses financial ratios to compare these companies regarding operating profitability, asset utilization, and risk management in the years 2005 and 2006. The evaluation compares the performances of these stores against the industry.
In order to make inferences about a company’s financial condition, its operations, and its attractiveness as an investment we have analyzed financial ratios and compare ratios derived from SVU’s financial statements (see chart 1).
The financial health of GM has been rocky over the last decade, one remarkable moment being the filing of bankruptcy and the subsequent government bailout. There have been many ups and downs for the corporation but for the last few years (Figure 4) profits again have risen to be the standard. Since the company’s recovery from bankruptcy their status has stabilized financially and in performance. Something is to be said that they have been in business for over 100 years and are still going strong earning them once again the title of top automobile manufacturer of the world.
This is another sign of a strong company, although it is not uncommon for a company to have a down year. These ratios show the following: · Nike has a very good ability to pay current liabilities. This was evident in the current ratio and the acid test. · Nike has an excellent ability to pay short term and long-term debt. This was proven in the debt ratio and times-interest-earned ratio.
Liquidity measures a company's capacity to pay its debts as they come due. However, Wal-Mart’s current ratio is 0.93, Target current ratio is 1.11 and the industry ratio is 3.04, which is much higher, so I would say that it is good but needs improvement. The quick ratio for Wal-Mart is 1.04 and Target’s quick ratio is 0.21 and the industry ratio is 0.31, which is much higher. Wal-Mart’s is higher and needs some improvement and Target’s is good. Accounts receivable for Wal-Mart is 9 days and Target’s is 6 days, whereas an estimate for the industry is 17 days, which means that both of them are doing better than the industry standards. Target’s inventory ratio is 6.04 and Wal-Mart’s inventory ratio is 0.81, and the industry ratio 1.58. These numbers shows that Wal-Mart is good but Target needs improvement. Furthermore, based on this analysis, I would say that Wal-Mart and Target are doing well but both have areas that need improvement.
Gap is an American worldwide clothing and accessories retailer. It was founded in 1969 by Donald Fisher and Doris F. Fisher and is headquartered in San Francisco, California. During the class period, Gap’s stock price increased by $3.50 (between May 17th and August 14th) and the percent change increased by 2.61%. Around the lawsuit filing, the stock price increased by $0.75 (from August 14th to September 4th) and the percent change increased by 0.56%.
Vital to any ratio analysis are the steps of gathering financial data and selecting and calculating relevant ratios. This assignment provides you with an opportunity to do just that.
Financial statements are a formal record of financial activities. During this 10-K report of financial analysis, we provided an overview of the Balance Sheet and Income Statement. The financial statement also overviewed what we analyzed comparing two major affordable retail companies such as Wal-Mart and Target. The information resulted in accurate information provided by the Security Exchange Commission (SEC). The SEC information gave us insight to analyze the two retails financial condition that involved both short and long-term, income and expense, and assets and liabilities. This insight is an important tool for investors in assessing Wal-Mart and Target overall position in the market place. From what it owes and owns as well the
Research about ratio analysis and financial statements has been going on for years, with different outcomes and different methods of foreseeing a company’s financial future. Ratios are highly important in financial statements by allowing companies to compare financial data against itself. By analysis the financial statement it allows individuals invest in and the company to see where they are in a current financial status and to predict the future status of the company by see improvements or
During the same period, stockholders’ equity (net worth) has increased by 18.88% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.
The first analysis will be on Verizon. The current ratio and the debt to equity ratio both improved in 2006 when compared to 2005. However, the net profit margin dropped from 9.8% to 7.0%. What does this tell us as investors...
A financial statement analysis aids in understanding the financial health of a company. By utilizing this evaluative method, investors, shareholders, managers and other affiliated parties are able to determine past, present, and projected performance of a company. Various techniques are used within this evaluative method including horizontal and ratio analysis. These techniques will show a comparison between two or more years of financial data as well as the statistical relationship between the financial data. It is the researcher’s intent to perform a financial statement analysis on Coca Cola Enterprises to demonstrate its potential healthy financial trends to future investors.
Any successful business owner or investor is constantly evaluating the performance of the companies they are involved with, comparing historical figures with its industry competitors, and even with successful businesses from other industries. To complete a thorough examination of any company's effectiveness, however, more needs to be looked at than the easily attainable numbers like sales, profits, and total assets. Luckily, there are many well-tested ratios out there that make the task a bit less daunting. Financial ratio analysis helps identify and quantify a company's strengths and weaknesses, evaluate its financial position, and shows potential risks. As with any other form of analysis, financial ratios aren't definitive and their results shouldn't be viewed as the only possibilities. However, when used in conjuncture with various other business evaluation processes, financial ratios are invaluable. By examining Ford Motor Company's financial ratios, along with a few other company factors, this report will give a clear picture of how the company is doing now and should do in the future.
Financial statement analysis is used to identify the trends and relationships between financial statement items. Both internal management and external user such as analysts, creditors and investors of the financial statements need to evaluate a company’s profitability, liquidity and solvency. The most common methods used for financial statement analysis are comparative statements, common-size statements, fund flow analysis and ratio analysis. These methods include calculations and comparisons of the results to historical company data, competitors, or industry averages to determine the relative strength and the performance of the company being analyzed. For this assignment I have chosen Telecommunication Company, Digi.Com Berhad and Maxis Berhad for evaluating their financial performance based on the calculated...