A person can see from the analysis that both companies had a fewer profits in 2005 over 2004. The increase of operation expenses was the cause of low net profits. Both companies need to rethink their operating cost to decrease their expenses which in return can help increase their profit margin.
In this report, it shows subsequent report on the financial ratio analysis of Kirkland its available current financial data. All the calculations of the ratios are going to be shown below.
Esquel, one of the leading cotton-shirt-manufacturers in the world came from China and it supplies lots of clothing brand such as Banana Republic, Tommy Hilfiger, Hugo Boss, Brooks Brothers, Abercrombie and Fitch, Nike, Nordstrom and Lands’ End, in addition to private companies (Plunkett Research, Ltd.). However, due to the high demand of the US apparel stores for Chinese products, the low cost, which was the main reason why raw materials are being purchased from China, have increased. China’s competition is huge, with Vietnam, the Philippines, Malaysia and Sri Lanka also producing material at cheap prices (Plunkett Research, Ltd.). The US apparel stores can instead purchase from these other Asian countries. It is hard to determine the exact number of suppliers in this industry; but, in general, majority of them are in Asian countries that can provide low-cost raw materials to US-based apparel stores. Therefore, the US apparel stores may acquire higher net profi
Financial Analysis Task 5 Part B-Report to CEO B1. Custom Snowboards sales history has been steadily increasing per the table below. CSI has had small growth in sales with an equal increase in COGS. The COGS is relative to the increase in the net sales, however, CSI should look further into ways they can decrease their COGS line item in order to see more profit growth from year to year. We can see on the Horizontal Analysis below that net sales, COGS and Profit all had the same increases from years 12 to 13 and from years 13 to 14. This is indicative of CSI needing to do more cost based analysis to see where they can make production cost cuts and boost sales. Per the data, operating costs also increased alongside the net sales. Items such
New Look Jacket Inc. (NLJ) specializes in the production of Nylon Jackets and Leather Jackets. The company delivers successful financial records at the end of the 2012 fiscal year with the net income of $ 417,100, which is $170,850 greater than the net income budgeted for the 2012 fiscal year despite that the company operations goes through some turmoil. A more detail variance shows that the external factor largely responsible for the growth of leather markets that rapidly increase than anticipated making NLJ to catch with the increase in market demand.
Of the hundreds of named brand clothing that form part of the retail and fashion industry I chose to compare, for my analysis, Abercrombie & Fitch, Forever 21, American Eagle, and H&M. These stores are prominent, well-known for selling apparel, shoes, and accessories by the means of offering sales and promotions to their customers. This is a clever strategy for attracting customers, allowing them to believe that they bought goods at affordable, convenient prices – and not to mention the prestigious name prescribed to the clothing brands. Using keyhole.co as my main source, I obtained relevant and valuable information regarding the status of these brands. My intentions were to compare a period of 14 days, however, due to the limited access that I received from my free trial, the program only allowed me to see fewer of the dates than I anticipated. I want to take this opportunity and mention ahead of time that due to the various and distinctive products that are sold from these stores, when looking for the “spending capacity” I decided to focus on shirts/ jeans for men and women and compare the prices among them since each of these retailers carry those items and as a way to make this report easier to contrast and comprehend. Also, when approaching the section of “setting”, I screen-shotted some of the images on Instagram and made them into a collage to separate the type of clothes and trends that each of these brands sell currently. In the following modules
In terms of industry profitability, it appears that profit margins have a tendency to fall. This is because competition is high and customers tend to buy low-priced high-value items. The average gross margin and net profit margin is 37.1% and 14.3%, respectively (MSN Money, 2010).
The textile industry has undergone enormous change in the past ten years. Global trade in textiles was once regulated by high tariffs and a complex system of import quotes. Not anymore. Textiles used to be produced predominantly in the U.S., Europe and Japan. Not anymore. Textile mills used to dictate fashion, everything from fabric construction to fiber content. Not anymore.
Australia has become an attractive market for clothing retailing instead of a gradual decrease in consumer spending due to global financial crisis, which driven the total revenue from this industry down by 0.7% per annum. Nonetheless, it is expected that in the next five years, the industry revenue will grow by 1.2% per annum.
Profitability (performance) ratios are used to assess a company’s ability to create equity as compared to its debt and other appropriate expenses created during a particular time frame. A favorable analysis of profitability ratios will reveal that a company’s value is higher than a competitor’s value.
In 2009, the operating profit was 3.56% which was slightly above than the previous year. After deducting all the expenses, the left amount is the net profit and the proportion of net profit in respect to total revenue is the net profit margin. Sainsbury’s net profit margin for the years 2009, 2008 and 2007 were 1.53%, 1.84% and 1.89% respectively. The management thinks that the tough market condition and the other competitors with very cheap pricing have pushed them to squeeze their profit margin ratio. The graph below shows the Return on Capital Employed as well. The ROCE gives the idea about how much return a company is making on its used capital. (investorwords.com) The ROCE for the company was 9.46%, 7.10% and 7.59% for the years 2009, 2008 and 2007 respectively. The year 2009 proved to be a little bit more in context of return on capital employed.
According to Fashion’s United “Facts and Figures in the UK fashion industry”1 almost 2/3 of jobs in the production of textiles, apparel, footwear and leather products were lost in the UK’s textiles manufacturing sector between 2000 and 2009. The sector that in 2000 has employed 285,000 people, in 2009 employed only 99,000. The same report states that this decrease of employment in manufacturing of textiles was strongly impacted by emerging markets like China, India and the new EU-27 member state industries like Bulgaria and Romania.
Apparel, Textiles, Clothing and Fashions Industry Market Research 2013 [ONLINE] Available at: http://www.plunkettresearch.com/apparel-textiles-clothing-market-research/industry-and-business-data. [Accessed 22 December 2013].
The last couple of decades have seen the textiles and clothing industry within Vienna, Austria evolve and change significantly, and despite being a moderately small sector encompassing small and medium-sized enterprises, the textiles and clothing industry still plays an integral part towards the Austrian economy. In 2013, the Austrian textiles and clothing industry ranked 10th overall as a principal