Sara Lee, Ratio Analyis

Francesca’s is a growing company that possesses a lot of potential for future growth. The company started in 1999 and was founded in Houston, Texas by three siblings Chong Yi, Kyong Gill and Insuk Koo and one other partner John De Meritt. Originally the company was dedicated to offering accessories, home décor, and jewelry but later came to include apparel because of their growth across the country. Francesca’s became a publicly held company in July on 2011 under the name FRAN and since then the company has gained 11%. Francesca’s brand identity can be characterized as a one of a kind, specialty boutique that builds emphasis on the customer shopping experience. Each boutique carries unique merchandise that varies from store to store so

Equity ratio and debt ratio are both designing for capital structure and they are negatively related with each other. The cost of equity is higher than the cost of debt, but shareholders will not require companies to repay them dividends and principals any time. However, companies must pay the debt holders interests and principals each year. And increasing leverage ratio will result in increasing the return to shareholders, yet at the same time, it will increase the repayment commitments and then raise the risk to company and shareholders.

This ratio gives the percentage of total funds that are provided by creditors. A ration under 1 means that the company is relies mostly on financing through equity. A ratio above 1 indicates that the company is financed more by debt.

| For every $1 in assets, the company generates 10.8 cents net income-in accounting terms, which gives us a return of 10.8% and is considered highly effective in such business

Market value proportions of: Debt = $1,147,200 / $4,897,200 = 23.4% Pref. Share = $1,250,000 / $4,897,200 = 25.5% Common equity = $2,500,000 / $4,897,200 = 51.1%

The ROE is actually very good in comparison to other market participants especially in 2003, but dropped significantly in 2004. Likewise the ROA dropped. Due to the fact that there was no decline in sales, the constantly rising operating expenses can be seen as a reason.

The debt to equity ratio is a “measure of financial risk provided by showing the amount of assets provided by creditors in relation to the amount provided by stockholders.” (Needles, 2014). Upon analysis of year 2016 annual report, Southwest Gas Holding’s debt to equity for the quarter that ended in 2016 was 0.96 as compared to the quarter that ended 2015 which was 1.0. This is a measure of the financial leverage a company has. This ratio means to me that this company is responsible and uses an equal amount of equity vs debt to pay for their projects. In other words, in 2016, the company matches 96 cents for each dollar given by its stockholders to pay for the assets. The ratio did not change much from last year’s calculation which means for the last two years the balance sheets reflected that the company is investing about the same.

The debt-to-capital ratio gives users an idea of a company's financial structure, or how it is financing its operations, along with some insight into its financial strength. The higher the debt-to-capital ratio, the more debt the company has compared to its equity. Star River has always depended much on debt for its financing and the trend shows this ratio may get higher in future. Star River, with high debt-to-capital ratios, compared to a general or industry average, may show weak financial strength because the cost of these debts may weigh on the company and

Limited Brands is an enterprise that comprises of five powerful brands in the country and worldwide: Victoria’s Secret, Pink, Bath and Body Works, La Senza and Henri Bendel. Founded by Leslie Wexner in 1963, his goal for his clients was focused on beauty products, lingerie and apparel that emphasized sophistication, sexy and forever young. Victoria’s Secret is one of the largest retailers in the United States with an operating income of one billion dollars and have reach its sales by $6 billion. This retailer is known for sophisticated lingerie, women’s wear and beauty products such as fragrance, makeup and body care.

The return on equity conveys the profits of the company as a rate of return on the amount of owners' equity. ROE uses average owners equity over the specified time period and net income. Historically a ROE of between 10% and 15% were considered average. Recently higher rates in growth industries have been greater.

These are strike years so we will ignore them. In 1994, ROE is less than that of last three years. Overall its not good sign, but its explanation will be given in upcoming ratios.

The next set of ratios to consider is the solvency ratios. The solvency ratios include the debt to equity ratio, debt to asset ratio and interest coverage ratio. The debt to equity ratio is calculated by dividing the total debt of a company by the total equity of the company. When the debt to equity ratio is high, it is an indication that a company financed mostly by debt. While this may not necessarily be a bad thing depending on the size of the company a high debt to equity ratio implies that there are more interests and creditors that a company has to pay in the future. It depicts a higher risk in terms of a company’s ability to satisfy its financial long terms debts. The debt to asset ratio measures a company’s total asset against total liabilities. A higher debt to asset ratio indicates that a company has a lot more debt than it can potentially pay in the future. The interest coverage ratio measures a company’s ability to pay off interest on loans with the current operating income. It is calculated by dividing operating income by interest expense. The higher the

Burberry Group plc (Burberry) is into the global luxury sector. It works in the designing, marketing and sourcing of outerwear, women’s wear, men’s wear, non-apparel and children’s wear categories. It distributes through a diversified network of retail, wholesale and licensing channels worldwide. The company operates its business in three ways by region, by product and by channel. Burberry distributes its products in Europe, Spain, Americas and Asia Pacific through retail and wholesale channels and with selective license arrangements. In addition, it licenses third parties to manufacture and distribute products using the Burberry trademarks. It categorizes

Grupo Sans, a leader in Spanish underwear market in 1970s and 1980s, was founded in 1960 in Mataró. Becoming a part of Sara Lee Corporation, the multinational company with the biggest at that time textile division in the world, in 1991, contributed to the growth and development of the company, and has led to the fact that 9 years later(in 2000) Grupo Sans’ income accounted for more than one-fourth of Sara Lee’ income in Spain.

One of the most important profitability metrics is return on equity. Return on equity reveals how much profit a company earned in comparison to the total amount of shareholder equity. It’s what the shareholders “own”. A business that has a high return on equity is more likely to be one that is capable of generating cash internally. For the most part, the higher a company’s return on equity compared to its industry, the better.