Jb Hi-Fi Financial Analysis
JB Hi Fi Ltd Company Analysis Report
Executive Summary
The impact of a company’s financial statement depends mainly on the company’s business strategy; both transactional and operational, its industry profile and the nature of its competitive environment. This report analyses 15 ratios of JB Hi-Fi’s financial performance and suggests a recommendation for investors.
JB Hi-Fi Limited (JBH) is a specialty discount retailer of branded home entertainment products. The group's products fall into consumer electronics, car sound systems, music, Digital Versatile Disc’s (DVD’s) and white-goods. JB Hi-Fi Limited achieved revenue growth of 17%, EBIT growth of 23% and NPAT growth of 26% for the year ended in 30 June 2010 through a strong expansion of stores. Table of Content
1. Introduction 3 2. Financial Ratios Calculation 3 2.1.1 Liquidity 3 2.1.2 Comparison and Evaluation of Liquidity: 3 2.2.1 Activity 5 2.2.2 Comparison and Evaluation of Activity: 6 2.3.1 Profitability 8 2.3.2 Comparison and Evaluation of Profitability: 9 2.4.1 Solvency &Leverage 10 2.4.2 Comparison and Evaluation of Solvency & Leverage: 11 2.5.1 Market Test 12 3. Recommendations for investor 13 4. Appendix 15
1. Introduction
This report is going to have an analysis of the business performance of JB HiFi using the calculation of ratios.
2. Financial Ratios Calculation
2.1.1 Liquidity
The tests of liquidity can be used to help determine the relationship between current assets and liabilities and subsequently the company’s ability to pay its debt. The two ratios used to help determine liquidity are Current Ratio and Quick Ratio. The Current ratio helps determine the balance between current assets and total current liabilities as at a specific date and the Quick ratio compares the assets defined as ‘quick’ such as cash and near cash assets (most liquid) to that of the current liabilities (Potter, Libby, Libby &
Executive Summary
The impact of a company’s financial statement depends mainly on the company’s business strategy; both transactional and operational, its industry profile and the nature of its competitive environment. This report analyses 15 ratios of JB Hi-Fi’s financial performance and suggests a recommendation for investors.
JB Hi-Fi Limited (JBH) is a specialty discount retailer of branded home entertainment products. The group's products fall into consumer electronics, car sound systems, music, Digital Versatile Disc’s (DVD’s) and white-goods. JB Hi-Fi Limited achieved revenue growth of 17%, EBIT growth of 23% and NPAT growth of 26% for the year ended in 30 June 2010 through a strong expansion of stores. Table of Content
1. Introduction 3 2. Financial Ratios Calculation 3 2.1.1 Liquidity 3 2.1.2 Comparison and Evaluation of Liquidity: 3 2.2.1 Activity 5 2.2.2 Comparison and Evaluation of Activity: 6 2.3.1 Profitability 8 2.3.2 Comparison and Evaluation of Profitability: 9 2.4.1 Solvency &Leverage 10 2.4.2 Comparison and Evaluation of Solvency & Leverage: 11 2.5.1 Market Test 12 3. Recommendations for investor 13 4. Appendix 15
1. Introduction
This report is going to have an analysis of the business performance of JB HiFi using the calculation of ratios.
2. Financial Ratios Calculation
2.1.1 Liquidity
The tests of liquidity can be used to help determine the relationship between current assets and liabilities and subsequently the company’s ability to pay its debt. The two ratios used to help determine liquidity are Current Ratio and Quick Ratio. The Current ratio helps determine the balance between current assets and total current liabilities as at a specific date and the Quick ratio compares the assets defined as ‘quick’ such as cash and near cash assets (most liquid) to that of the current liabilities (Potter, Libby, Libby &
References: JB Hi Fi Annual Report 2011. Retrieved February 2, 2012 from; http://www.jbhifi.com.au/documents/reports/110_2011-09-09_4-04-34.pdf JB Hi Fi Annual Report 2010. Retrieved February 2, 2012 from; http://www.jbhifi.com.au/documents/reports/98_2010-09-13_1-01-12.pdf Potter, B., Libby, R., Libby, P., & Short, D. (2010). Accounting in Context. McGraw-Hill Australia Pty Limited.