Jb Hi-Fi Financial Analysis Essay

The Gross profit ratio for JB Hi Fi is a profitable ratio that showed the relationship between gross profit and the total net sales revenue, which increased from 2013 at 21.3% to 21.70% in 2014. Due to an increase margin of gross sales as a result of good marketing and reduced expenses. This improvement interprets to the shareholders of JB Hi Fi that the business is doing well. This ratio enables the company to give a good indication of its financial health for its operation to accurately manage its cash flow and expenses, which is effected by the cost of goods and services and pricing policies. As always improvement is a vital process tool which motivates the staff of JB Hi Fi to continue to attract and retain high sales to target a profit

The impact of a company’s financial statement depends mainly on the company’s business strategy; both transactional and operational, its industry profile and the nature of its competitive environment. This report analyses 15 ratios of JB Hi-Fi’s financial performance and suggests a recommendation for investors.

Pioneer decision to reposition itself from a premium-priced brand into a “mid-priced, mainstream” brand affected the profit margins of its distributors negatively. At the same time, the company’s profit margin increased dramatically. Based on 1976 data from Exhibit 13, an average retailer profit margin was about 3.4%. Pioneer had a comparable profit margin of 3.9% in 1975, based on Exhibit 14 data. This margin increased by almost 3 times in 1976 to 9.4%. This clearly shows how Pioneer benefited from its market repositioning strategy while its distributors profits declined.

H. Rate of Return on Net Sales: This ratio is used to find profit made per dollar sale. Company G ascended its percentage (5.43% to 6.13%). Average for the industry is a 4.60% according to Yahoo Finance. Last quartile industry data shows 7.55%, above Company G ratio. Rate of Return on Net Sales is of no concern for Company G.

Liquidity ratios measures a company`s ability to provide enough cash to cover its short-term obligations. The most common liquidity ratios include; the current ratio and the quick ratio.

Company: JB Hi-Fi limited has achieved sales of $3.65 billion in the financial year of 2015, with a total sales growth of 4.8% and comparable sales growth of 2.9% on last financial year. In 2015 the net profit tax has increased 6.4% to $136.5 million, earnings per share increased 7,4% to 137.9 cents per share and the hole dividend for the 2015 financial year increased 7.1% on the before financial year to 90.0 cents per share. JB HI-Fi Capital Management area has conducted regular revirews of all the aspects of its capital structure with the main focus on increasing all returns to its

JB Hi Fi Limited’s (referred to as JBH or the company throughout this report) financial performance for the two years ending 30th June 2009 can be evaluated using the ratios presented in Table 1 below. Overall, considering the economic environment during this period with the Global Financial Crisis, JBH has continued to maintain exceptional profit margins and return to shareholders. The company achieved revenue growth of 27%, earnings before interest and taxes (EBIT) growth of 39% and net profit after taxes (NPAT) growth of 45% for the year ended 30 June 2009 (JBH Annual Report, 2009).

10. Fixed asset turnover = Total Revenues in Statement of Operations / Net Property and

By measuring the sales generated per dollar of assets invested in the organization, total asset turnover

1. What ratios are MOST important in assessing current and predicting future value creation for Sears? For Wal-Mart?

Another ratio we will look at is total asset turnover rate. Total asset turnover rate measures how efficiently a company uses its assets to generate sales. In 2001 the total asset turnover rate was 1.079 and in 2000 it was 1.193. The fixed asset turnover ratio is similar to the total asset turnover ratio but includes only fixed assets. The fixed asset turnover rate measures the capacity utilization and the quality of fixed assets and was 3.771 for 2001 and 3.854 for 2000.

Asset turnover is a business term that describes how efficient a company is at using

Evaluating management effectiveness, the asset utilization ratios assess daily operating performance. Indicating a quicker collection turnover on outstanding debt, Google has a higher receivables turnover than Apple. Although, Google takes longer to collect accounts receivable, or average collection period, than Apple. Similarly, analysis reveals Google has double the higher inventory turnover than Apple. Comparing the fixed asset turnover reveals that Google gains 2.64 dollars for each dollar in fixed assets, whereas Apple generates 7.98 dollars. The total asset turnover tells that Apple outperformed Google by generating 67 cents for every dollar of assets.

The asset turnover ratio is a number that, “ Measures how efficiently a business uses its average total assets to generate sales” (Nobles, 2014 p637) The

The activity analysis was conducted using the average days outstanding, working capital turnover, fixed assets turnover, and total asset turnover. Starting with average days outstanding which is the measuring of the average number of days a business takes to collect its trade receivables after they have been created. This ratio becomes important because it is useful in measuring a company’s liquidity and can also indicate customer base credit problems or company deficient in collection activity. Looking at the data in the case study Coca-Cola showed a consistent average day outstanding staying around 32 from 1994 to 2000. PepsiCo on the other hand did not stay consistent starting with 25 and reaching all the way to 40 in 1997. Within the next few years PepsiCo was able to drop that number down to a competitive 31. The two important turnover ratios in the activity analysis are the fixed assets turnover and total asset turnover. These ratios show how effectively Coca-Cola and PepsiCo are using their assets and their ability to generate revenue. The fixed assets turnover provides a measurement of how much revenue the companies are making from every dollar of a fixed asset. While the total asset turnover measures the revenue from every dollar of the total assets. With Coca-Cola they have a positive ratio from 1994 to 2000 with a slight rise from 1996 to 1998. In contrast PepsiCo had a consistent ratio with rise in 2000 probably