Essay about Jb Hi-Fi Financial Analysis

JB Hi-Fi is an entertainment and consumer electronics chain store, providing a range of branded home electronic products and music records. The electronic industry is experiencing growth over the last few years mainly due to the introduction of a handful of electronic gadget which captures the attention of consumer. However, this growth focused on a few products such as smart phones, tablet, and music player while the rest of the products are slowing in terms of growth.

The question asks us to compare and evaluate JB Hi-Fi’s calculated ratio report, with that of the retail industry ratio report (Potter, Libby, Libby, Short p. 1133). The retail ratio report is comprised of a basket of listed companies which operate under the retail banner, which makes it relevant to use as a comparison to JB Hi-Fi.

JB Hi-Fi is an Australian retailer of consumer electronics it began in 1974, where Mr. John Barbuto (JB) established JB Hi-Fi in East Keilor, Victoria. His main focus was to deliver a special range of Hi-Fi and recorded music at the lowest prices in Australia and New Zealand. Mr. John Barbuto sold the business in 1983 and by 1999 another nine stores were opened. In July 2000 private equity bankers and senior management purchased JB Hi-Fi. In October 2003, JB Hi-Fi was floated on the Australian Stock Exchange. This company still maintaining Barbet’s original philosophy, JB is one of Australasia 's fastest growing and largest retailers of home entertainment.

This ratio is similar to current ratio, except that it excludes inventory from current assets. Inventory is subtracted because it is considered to be less liquid than other current assets, that is, it cannot be easily used to pay for the company’s current liabilities. A company having a quick ratio of at least 1.0, is considered to be financially stable. It has sufficient liquid assets and hence, it will be able to pay back its debts easily (Qasim Saleem et al., 2011).

Overall regards to liquidity ratios, the higher the number the better; however, a too high also indicates that the firms were not using their resources to their full potential. Current ratio of 1.0 or greater shows that a company can pay its current liabilities with its current assets. JWN’s ratio increased from 2.06 in 2007 to 2.57 in 2010, and slightly decreased to 2.16 in 2011. JWN’s cash ratio increased significantly from 22% in 2007 to 80% in 2010. JWN has a cash ratio of 73% in 2011, which is useful to creditors when deciding how much debt they would be willing to extend to JWN. In addition, JWN also has moderate CFO ratio of 46%, indicating the companies’ ability to pay off their short term liabilities with their operating cash

Financial data from past periods of a company, provides a perspective for future outcomes. Investors give proper attention to different ratios. In this report I am analyzing the financial position and financial performance of AT & T, a US. Telecommunication Company. The objective and conclusion of this analysis will be, if is either good or not to invest in the company.

The Quick Ratio also known as Acid Ratio is used by firms to determine liquidity position. It explains if the firm is able to pay all of their current debt liabilities. (Dyson, 2010) The graph above illustrates that over the period from 2007 to 2011 quick ratio was not more that 1, which means that their debts might not be covered all. The graph also indicates that a peak was in 2011.

In the previous project assigned to me, I completed a SWOT analysis of Sirius XM Radio where it was noted that the Sirius XM is firmly at the top of its industry. For the purposes of this project, I went through the financial statements of Sirius XM as well as computed several key financial ratios to indicate Sirius XM’s profitability, growth, performance, and efficiency amongst other things. I then compared these ratios to the industry averages as well as with Sirius XM’s top competitors. After completing this close analysis, I found that although Sirius XM is enjoying incredible growth and a strong place in the market, there are still several flags that an investor should still note.

Liquidity ratio. The firm’s liquidity shows a downward trend through time. The current ratio is decreasing because the growth in current liabilities outpaces the growth of current assets. The quick ratio is also declining but not as fast as the current ratio. From 1991 to 1992, it only decreased 0.35 units while the current ratio decreased 0.93 units. Looking at the common size balance sheet, we also see that the percentage of inventory is growing from 33% to 48% indicating Mark X could not convert its inventory to cash.

Liquidity ratios measure the short term ability of a company to pay its obligations and meet their needs for maintaining cash. According to Cagle, Campbell & Jones (2013), “A good assessment of a company’s liquidity is important because a decline in liquidity leads to a greater risk of bankruptcy” (p. 44). Creditors, investors and analysts alike are all interested in a company’s liquidity. After computing liquidity

Liquidity In analyzing liquidity of the company, the current ratio is not very telling of a falling company. The company increased its ratio throughout the period of the income statement thus building upon its company assets and allowing for a 6-1 ratio of assets over its liabilities. This implies the company is still able to operate sufficiently even though it did not make its optimum current ratio of about 8-1. However, when one takes the inventory out of the equation with the quick ratio, the numbers show the true strength of short term liquidity. The numbers are still good, and do not indicate failure – but are

The main competitors of Harvey Norman Holding LTD is the group of J B HI-FI, who has declared a sales revenue from 2.73Bn to 2.96Bn as an increase of 8.3% (P.2, JB HI-FI annual report 2011), compares to the increase of 9% of Harvey Norman.According to the figure,it seems Harvey Norman is doing better than J B HI-FI, but the business segment for J B HI-FI is much less diversified than Harvey Norman, therefore, J B HI-FI is actually doing better in just viewing the computer and software segment.

These ratios help company in determining its capability to pay short-term debts. Liquidity ratios inform about, how quickly a firm can obtain cash by liquidating its current assets in order to pay its liabilities. General liquidity ratios are: current ratio and quick ratio. Current ration can be obtain by dividing company’s current assets by its’ current liabilities. Generally a current ratio of two is considered as good (Cleverley et al., 2011). Quick ratio also known as acid test determines company’s liabilities that need to be fulfilled on urgent basis. Quick ratio can be obtained by dividing quick assets by current liabilities. Quick ratio is considered as stricter because it excludes inventories from current assets. Generally a quick ratio of 1:1 is considered as good for the company. Higher quick

Before beginning an analysis of a company it is necessary to have a complete set of financial statements, preferably for the pas few years so that historical trends can be obtained. Ratios are a way for anyone to get an idea of the financial performance of a company by using the information contained in the financial statements. Ratios are grouped into four basic categories, liquidity, activity, profitability, and financial leverage. This document will use a variety of these ratios to analyze the firm, Sample Company, as of December 31,2000.

The financial analysis expressed in this paper shows a comparison of two large firms in the communication and technology industry. Microsoft and Apple Inc. both deal in telecommunication gadgets and accessories within the United States and around the world. The paper focuses on the financial comparison of the two companies for two fiscal years of the year 2014 and 2015. A close analysis of the financial ratios is employed in bringing up the comparison. These rates are derived from the balance sheet and statement of income of both firms.