Financial Evaluation of Jb Hifi's Performance

4409 Words18 Pages
JB Hi Fi Limited’s (referred to as JBH or the company throughout this report) financial performance for the two years ending 30th June 2009 can be evaluated using the ratios presented in Table 1 below. Overall, considering the economic environment during this period with the Global Financial Crisis, JBH has continued to maintain exceptional profit margins and return to shareholders. The company achieved revenue growth of 27%, earnings before interest and taxes (EBIT) growth of 39% and net profit after taxes (NPAT) growth of 45% for the year ended 30 June 2009 (JBH Annual Report, 2009). Table 1. Ratios calculated from JBH Annual Report 2009 using formulae from Evans & McDowell (2009). |…show more content…
Data from the JBH Annual Report (2009) was used in these calculations. | |ROA (%) |Profit Margin (times) |Asset Turnover (times) | |FY08 |19.3 |0.06 |3.41 | |FY09 |21.7 |0.06 |3.51 | The return on equity (ROE) has also shown an increase in 2009 over the previous year suggesting a successful investment by shareholders. This increase, coupled with the fact that the basic earnings per share (EPS) has increased significantly from 61.78 cents in 2008 to 88.26 cents in 2009 (143%) shows great improvement in the profit per share. Please note that the basic EPS has been used in this analysis as the diluted EPS includes employee options (JBH Annual Report, 2009), skewing and reducing the value of the EPS. When combining the figures for ROE, ROA and the DuPont analysis it appears that the company is using leverage favourably. ROE is greater than ROA and assets are greater than equity. This is a positive sign for shareholders as it suggests a good investment return in a company that is managing its shareholder equity well (Evans & McDowell, 2009). Question 2 The financial position of JBH can also be analysed using the ratios presented in Table 4, which are calculated using figures in the JBH Annual Report (2009). Table 4. Ratios calculated using raw

More about Financial Evaluation of Jb Hifi's Performance

Open Document