Financial Accounting Essay

9769 Words Sep 15th, 2014 40 Pages
Investment Analysis for OrotonGroup Limited

Table of Contents

1. Introduction 3
2. Business Model and Operating Environment 4 2.1 Business Model 4 2.2 Operating Environment 5
3. Horizontal and Vertical Analysis 6 3.1 Horizontal Analysis on Balance Sheet 6 3.2 Horizontal Analysis on Income Statement 9 3.3 Vertical Analysis on Balance Sheet 11 3.4 Vertical Analysis on Income Statement 13
4. Ratio Analysis 14 4.1 Ratio Analysis for OrotonGroup 14 4.2 Ratio Analysis for Country Road 19 4.3 A Comparison of ORL and CTY 23 4.4 DuPont Analysis 24
5. Valuation 26
6. Other information of OrotonGroup 28 6.1 Continuous disclosure 28 6.2 Corporate governance 28 6.3 Media comments 29
7. Investment Recommendation 30
…show more content…
At the end of report, the conclusion and an investment recommendation will be offered.

2. Business Model and Operating Environment
2.1 Business Model
ORL adapts a flexible business model depending on changes of the market. In general, ORL’s strategy is to provide worldwide luxury brands and it focuses on channel of distribution, extension of Asian market and licensed brand.

Channel of distribution
ORL developed a strong model of a multi distribution channel including first retail stores, concessions, factory outlets and wholesale. ORL also kept high rate of opening new stores. 9 new stores have been opened in 2011 and another 9 new stores have been established in 2012 (OrotonGroup Limited Annual Report, 2013). In order to be more competitive, ORL opened an online shopping store which contributes a lot of sales with a significant sales growth rate every year.

Extension of Asian market
ORL is a multi-national company with an international view. It successfully launched the Oroton brand in Asia in 2011 and increased its investment in Asian market in 2012. ORL continued to grow in Asia including opening stores and securing leases for future stores. By the end of 2013, there are 7 stores settled in Asia with new stores in Shanghai and Hong Kong and a licensed store in Dubai (ORL Annual Report, 2013).

Licensed brand
Sales of licensed brand are an important strategy of ORL. It had the exclusive licensee for the Ralph Lauren brand

More about Financial Accounting Essay

Open Document