Introduction Steve Madden Ltd. fashion company designs and markets shoes, apparel, and accessories for women, men, and children. The company includes a number of brands within the franchise. Steven Madden stores have locations both domestically within the United States and internationally. Its’ products are also sold within multiple different department stores and has a large online database to buy from. Despite the company being in the shrinking retail industry, Steve Madden Ltd. continues to grow and expand. Within this report, a detailed analysis over profitability, liquidity, debt, asset activity, market value, stock prices, and comparisons to the industry will help to explain Steven Madden Ltd.’s financial state. Recommendations will
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The financial leverage of Steven Madden Ltd. has been around 1.32 consistently. This shows that the company has the ability to pay off its liabilities and assets. Being that the company has relatively low amount of debt, makes them less of a risk for potential lenders.
Asset Activity Analysis Assets activity within the firm is another important examination of how effective the company is at using its assets. Both inventory and fixed asset turnover have increased in the last two years. Fixed asset turnover increased a total of 2.1 from last year alone. Receivable turnover has also stayed at a steady average of 7. Steven Madden Ltd.’s asset activity looks healthy and secure.
Market Value Analysis Market values are important to both the company and those who are investing in the company. Steve Madden Ltd.’s price per earning is around 20.8 slightly lower than the industry average of 30, showing room for improvement.
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Steve Madden Ltd. should take advantage of being considered a low risk borrower and look for potential lenders for this would be a good time to negotiate at loan. Asset activity recommendations include two different approaches. The safe approach would be to increase sales revenue to help increase both total asset turnover rate and fixed asset turnover rate. Increasing sales could be done by producing a new, exclusive shoe line or potentially adding different types of accessories to the Steve Madden collection. The other approach would be to use the leeway of having secure asset activity ratios to invest now. Steve Madden Ltd. could look to invest in shoe patents, technology, or again automation. Market value and stock price recommendations consist of maintaining financial stability within the company to reassure investors that its’ a safe company to invest in. It is also criticial that the company continue to be forward-thinking to defy the retail meltdown. Steve Madden Ltd. could look into the potential of offering its’ investors dividends, though it is important to also understand tax repercussions of offering those
The financial leverage of Steven Madden Ltd. has been around 1.32 consistently. This shows that the company has the ability to pay off its liabilities and assets. Being that the company has relatively low amount of debt, makes them less of a risk for potential lenders.
Asset Activity Analysis Assets activity within the firm is another important examination of how effective the company is at using its assets. Both inventory and fixed asset turnover have increased in the last two years. Fixed asset turnover increased a total of 2.1 from last year alone. Receivable turnover has also stayed at a steady average of 7. Steven Madden Ltd.’s asset activity looks healthy and secure.
Market Value Analysis Market values are important to both the company and those who are investing in the company. Steve Madden Ltd.’s price per earning is around 20.8 slightly lower than the industry average of 30, showing room for improvement.
Stock Price …show more content…
Steve Madden Ltd. should take advantage of being considered a low risk borrower and look for potential lenders for this would be a good time to negotiate at loan. Asset activity recommendations include two different approaches. The safe approach would be to increase sales revenue to help increase both total asset turnover rate and fixed asset turnover rate. Increasing sales could be done by producing a new, exclusive shoe line or potentially adding different types of accessories to the Steve Madden collection. The other approach would be to use the leeway of having secure asset activity ratios to invest now. Steve Madden Ltd. could look to invest in shoe patents, technology, or again automation. Market value and stock price recommendations consist of maintaining financial stability within the company to reassure investors that its’ a safe company to invest in. It is also criticial that the company continue to be forward-thinking to defy the retail meltdown. Steve Madden Ltd. could look into the potential of offering its’ investors dividends, though it is important to also understand tax repercussions of offering those