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Financial Analysis Essay

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UNIVERSITY OF PORTSMOUTH | Report for Primark’s IPO purposes | Financial Analysis Assignment | | Student ID: 635281, 636484, 640073 | 11/28/2011 | | ------------------------------------------------- Table of Contents I. Introduction 4 II. Primark’s business and financial situation 5 2.1. Primark’s business and financial analysis 5 2.1.1. Business analysis 5 2.1.2. Financial situation (trend analysis) 6 2.2. Industry sector 11 2.2.1. Overview 11 2.2.2. Cross-sectional analysis 12 2.2.3. Summary of Primark’s strength and weakness 16 III. Financial ranking and forecast 17 3.1. Financial ranking 17 3.2. Forecasted 2011 post tax profit 18 IV. Corporate Governance Structure 20 …show more content…

Finally, the last section is the conclusion, which summarizes the report and evaluate of the techniques applied in the analysis. II. Primark’s business and financial situation 2. 3.1. Primark’s business and financial analysis 3.2.1. Business analysis Chesbrough (2006) suggested that Business model emphasizes how business can use technological potential to create economic value and suggested that its main functions are: value proposition, market segment, value chain, cost structure and target margin, value network, competitive strategy. According to a case study of Primark (The Times 100, 2010), the business model which is based on “high sales volumes” and “lower retail margins” with minimal advertising enables Primark to offer value and low price products. The economies of scales resulting by buying large quantity of items help Primark to keep costs down. Moreover, retails prices are kept at considerably low level through “lean operation” and efficient operational practices (e.g. off-season factory time, flat management structure, effectiveness of distribution network and supply chain). This business model has created and enhanced Primark’s competitive advantage which is the vital key to survive and grow in its industry sector. 3.2.2. Financial situation (trend analysis) In recent years, thanks to meeting customers’ need and expanding stores, Primark has grown rapidly year by year [ (The Times 100) ].

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