Financial Ratio Analysis : Victoria 's Secret Essay

1706 Words Oct 28th, 2016 7 Pages
Financial Ratio Analysis In review of Victoria’s Secret’s financial ratios, it can be concluded that they are capable of fulfilling consumer demands and maintain financial stability. Liquidity Measures ratios advocates that Victoria’s Secret is also capable of sufficiently paying for its liabilities as well as invest assets in a tactical way. Net Working Capital to Total Assets show that Victoria’s Secret is able to turn assets and cover their short term liabilities efficiently. Fixed Asset Turnover for Victoria Secret indicates that they know how to use their fixed assets effectively towards its sales revenues. They have the capability to generate $4 to $5 of sales for every $1 that is invested into the fixed assets. Debt/ leverage measures the low debt to total asset ratio implies that Victoria’s Secret assets are financed mostly through equity rather than debt. In terms of Victoria’s Secret’s gross profit margin, it is well above the industry averages, which demonstrates that Victoria’s Secret is generating resilient sales prices that relation to its COGS. Operating profit margin ratio shows that they are in control of operating costs, alternatively their sales could also be increasing at a rapid pace to their operating costs. Victoria’s Secret seem to have some cushion that can provide refuse in times of industry hardships, based on the net profit margin ratios. They are adequately converting assets into
Financial Analysis 7
generated…

Related Documents