Introduction
Financial management requires the effective exploration of financial statements, the information relayed provides valuable insights into the health of a company (Lohrey n.d.). This report has conducted a performance evaluation and stock valuation for the JB Hi-Fi Group Pty Ltd (JB Hi-Fi). Australia’s largest home entertainment retailer, JB Hi-Fi sells home consumer products across 187 stores in Australia and New Zealand. By investigating the performance and stocks of a company, financial managers gain a clearer understanding of how the business is functioning. Both qualitative and quantitative analysis have been used to examine JB Hi-Fi current financial position.
The structure of the report will begin qualitatively by exploring …show more content…
These financial statements present a great depth of information normally quarterly, half-yearly or per year. The data contained presents profits earned and suffered losses. Over different periods these profit and loss statements are compared and provide detailed analysis to demonstrate the changes from one reporting period to another.
JB Hi-Fi’s profit and loss statements from 2011-2015 show positive growth except for 2012 (Refer to Appendix 1). During 2012, it was a difficult retailing environment which wasn’t helped by the fact that all major competition such as Harvey Norman and Dick Smith discounted their products significantly to increase sales (JB Hi-Fi 2012). JB Hi-Fi was also affected by WOW Sight & Sound, Dick Smith and Game as they cleared their stock at extremely low and discounted prices (JB Hi-Fi 2012). Since 2012, steady growth has continued and JB Hi-Fi’s profit have increased reaching profit margins set by previous …show more content…
The objective of implementing ratio analysis is to assess a business’ financial performance but also the functions of their operations (Žager, Sačer & Dečman 2012). Comparing financial statements against other years, competitors and industry averages provides the parties concerned with information about where the company is heading but also what has been successful and what areas need improvement (Tedor & Radu 2013). For the purposes of this report, the profit and loss statements and balance sheets, have been attained through not only JB Hi-Fi’s annual report but also IBSISWorld. The ratio’s which will be discussed below in the following section as well as industry averages and Harvey Norman’s 2015 figures are attached to Appendix 3 and can be referred to throughout the
Financial management requires the effective exploration of financial statements, the information relayed provides valuable insights into the health of a company (Lohrey n.d.). This report has conducted a performance evaluation and stock valuation for the JB Hi-Fi Group Pty Ltd (JB Hi-Fi). Australia’s largest home entertainment retailer, JB Hi-Fi sells home consumer products across 187 stores in Australia and New Zealand. By investigating the performance and stocks of a company, financial managers gain a clearer understanding of how the business is functioning. Both qualitative and quantitative analysis have been used to examine JB Hi-Fi current financial position.
The structure of the report will begin qualitatively by exploring …show more content…
These financial statements present a great depth of information normally quarterly, half-yearly or per year. The data contained presents profits earned and suffered losses. Over different periods these profit and loss statements are compared and provide detailed analysis to demonstrate the changes from one reporting period to another.
JB Hi-Fi’s profit and loss statements from 2011-2015 show positive growth except for 2012 (Refer to Appendix 1). During 2012, it was a difficult retailing environment which wasn’t helped by the fact that all major competition such as Harvey Norman and Dick Smith discounted their products significantly to increase sales (JB Hi-Fi 2012). JB Hi-Fi was also affected by WOW Sight & Sound, Dick Smith and Game as they cleared their stock at extremely low and discounted prices (JB Hi-Fi 2012). Since 2012, steady growth has continued and JB Hi-Fi’s profit have increased reaching profit margins set by previous …show more content…
The objective of implementing ratio analysis is to assess a business’ financial performance but also the functions of their operations (Žager, Sačer & Dečman 2012). Comparing financial statements against other years, competitors and industry averages provides the parties concerned with information about where the company is heading but also what has been successful and what areas need improvement (Tedor & Radu 2013). For the purposes of this report, the profit and loss statements and balance sheets, have been attained through not only JB Hi-Fi’s annual report but also IBSISWorld. The ratio’s which will be discussed below in the following section as well as industry averages and Harvey Norman’s 2015 figures are attached to Appendix 3 and can be referred to throughout the