Financial Analysis of Primark Essay

2872 Words 12 Pages
Contents Background 3 Introduction 3 Financial result 4 Percentage changes and Index number 5 Industry sectors and competitors analysis 6 Financial strengths and weaknesses of Primark 8 Where Primark would be ranked financial within its sector on the LSE 9 Forecast Primark’s 2011 post tax profits 10 Techniques (ratio analysis) evaluation 12 Corporate governance recommendations 13 Conclusion 16 Appendix 17 References 31

Background
At present, the Primark Ltd has 162 stores located in the UK, Spain and Ireland. They are subsidiary of Penney Brand Company which is based in England and recently announced it has hired its 25,000th person among its stores (Nagdeman, 2009).
According to a recently research, the
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Current liabilities are divided in three parts: trade debtors, group loans and bank overdraft. Trade creditors increased steadily from 52.63 million Pound to 102.51 million Pound. Besides, the bank overdraft was 5.02 million Pound in 2006 and 7.92 million Pound in 2009. The bank draft in other times was all less than 1 million Pound. Director loans fluctuated all the time (Bloomberg, 2011).

Industry sectors and competitors analysis
This chapter will concentrate on the industry sector, and financial situation of Primark and its two competitors: Next and New Look. The financial analysis tools, ratio analysis will be used to indicate and evaluate these three organisations. Figures and tables are available in this case study, calculation and data analysis are also provided (see more details information in Appendix). Moreover, the financial data (Balance sheet, Income statement and Cash flow) were collecting from Bloomberg and Hemscott Company Guru.

Industry refers to the production of an economic good or service within an economy (Dictionary Reference, 2011). Basically, industry sector refers to the organisations within the same industry. In this research study, Primark belongs to the retail industry. Morningstar Company Intelligence (2011) clearly illustrates four main areas of the retail industrial sector index, which include Market capitalisation, Turnover, number of

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