Financial Analysis
UNIVERSITY OF PORTSMOUTH | Report for Primark’s IPO purposes | Financial Analysis Assignment | | Student ID: 635281, 636484, 640073 | 11/28/2011 |
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Table of Contents I. Introduction 4 II. Primark’s business and financial situation 5 2.1. Primark’s business and financial analysis 5 2.1.1. Business analysis 5 2.1.2. Financial situation (trend analysis) 6 2.2. Industry sector 11 2.2.1. Overview 11 2.2.2. Cross-sectional analysis 12 2.2.3. Summary of Primark’s strength and weakness 16 III. Financial ranking and forecast 17 3.1. Financial ranking 17 3.2. Forecasted 2011 post tax profit 18 IV. Corporate Governance Structure 20 4.1. Several Essential Principles 20 4.2. The composition of the Board 20 V. Critical analysis of techniques applied in the analysis 22 VI. Conclusion 22 Bibliography 24 Appendix 1: Ratio Calculations: 27 Appendix 2: Primark’s Ratios 28 Appendix 3: Financial ratios of four companies in UK retail industry (2010) 29 Appendix 4: Ranking listed companies in apparel retail industry in FTSE100 30
Summary of Tables Table 1: Primark's Current Ratio, Quick ratio when include Group Loan 9 Table 2: Primark's Current Ratio, Quick ratio when exclude Group Loan 9 Table 3: Primark's financial strength & weakness compared to listed competitors 16 Table 4: Primark's competitiveness compared to listed competitors 16 Table 5: Ranking listed companies in apparel retail industry in FTSE100 17 Table 6: Revenue and Post Tax Profit of Primark from 2006 to 2010 19 Table 7: Critical analysis of techniques applied in the analysis 22
Summary of Figures Figure 1: Primark's Revenue & Adjusted operating profit 6 Figure 2: Primark's Profitability Ratios 7 Figure 3: Primark's Gearing Ratio & Long Term Debt 8 Figure 4: Primark's Efficiency Ratios 10 Figure 5: The Total UK Market for Clothing Retailing by Value at
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Table of Contents I. Introduction 4 II. Primark’s business and financial situation 5 2.1. Primark’s business and financial analysis 5 2.1.1. Business analysis 5 2.1.2. Financial situation (trend analysis) 6 2.2. Industry sector 11 2.2.1. Overview 11 2.2.2. Cross-sectional analysis 12 2.2.3. Summary of Primark’s strength and weakness 16 III. Financial ranking and forecast 17 3.1. Financial ranking 17 3.2. Forecasted 2011 post tax profit 18 IV. Corporate Governance Structure 20 4.1. Several Essential Principles 20 4.2. The composition of the Board 20 V. Critical analysis of techniques applied in the analysis 22 VI. Conclusion 22 Bibliography 24 Appendix 1: Ratio Calculations: 27 Appendix 2: Primark’s Ratios 28 Appendix 3: Financial ratios of four companies in UK retail industry (2010) 29 Appendix 4: Ranking listed companies in apparel retail industry in FTSE100 30
Summary of Tables Table 1: Primark's Current Ratio, Quick ratio when include Group Loan 9 Table 2: Primark's Current Ratio, Quick ratio when exclude Group Loan 9 Table 3: Primark's financial strength & weakness compared to listed competitors 16 Table 4: Primark's competitiveness compared to listed competitors 16 Table 5: Ranking listed companies in apparel retail industry in FTSE100 17 Table 6: Revenue and Post Tax Profit of Primark from 2006 to 2010 19 Table 7: Critical analysis of techniques applied in the analysis 22
Summary of Figures Figure 1: Primark's Revenue & Adjusted operating profit 6 Figure 2: Primark's Profitability Ratios 7 Figure 3: Primark's Gearing Ratio & Long Term Debt 8 Figure 4: Primark's Efficiency Ratios 10 Figure 5: The Total UK Market for Clothing Retailing by Value at
Bibliography: Associated British Foods plc. (2010). ABF annual report. Retrieved November 2, 2011, from http://www.abf.co.uk/: http://www.abf.co.uk/uploads/abf-annual-report-2010.pdf Associated British Foods plc Birtwistle, G., & Morgan, L. (2009). An investigation of young fashion consumers’disposal habits. International Journal of Consumer Studies 33190/198 , 65. Bloomberg L.P. (2010). Mataland Retail Ltd. Retrieved November 2, 2011, from Bloomberg. Bloomberg L.P. (2010). New Look Retail. Retrieved November 2, 2011, from Bloomberg. Bloomberg L.P. (2010). Next PLC. Retrieved November 2, 2011, from Bloomberg. Bloomberg L.P. (2010). Primark Stores Ltd. Retrieved November 2, 2011, from Bloomberg. Bloomberg. (2010). Primark Stores Ltd. Chesbrough, H Collins, B., & McKeith, J. (2010). Financial accounting and reporting. London: McGraw-Hill Education. Coyle, B. (2010). Corporate Governance. London: ICSA Information & Training Ltd. Elliott, B., & Elliott, J. (2011). Financial accounting and reporting (14th ed.). Essex, England: Pearson Education Limited. Ghicas, D. C., Iriotis, N., Papadaki, A., & Walker, M. (2000). Fundamental Analysis and the Valuation of IPOs in the Construction Industry. The International Journal of Accounting , 35 (2), 227-241. Idris, N. F. (2008). Financial Ratios As The Predictor of Corporate Distress in Malaysia. Retrieved November 2, 2011, from University of Malaysia: http://dspace.fsktm.um.edu.my/bitstream/1812/783/1/ResPPrFinalSubmission2nddraft.pdf Johnson, C Key Note. (2010). Clothing & Footwear Industry Market Review 2010. Retrieved November 2, 2011, from Key Note Website: http://www.keynote.co.uk/market-intelligence/view/product/2401/clothing-%26-footwear-industry Key Note Matalan Retail Ltd. (2011). Matalan - History. Retrieved November 2, 2011, from Matalan Website: http://www.matalan.co.uk/fcp/content/our-history/content Mc Laney, E., & Atrill, P Morningstar. (2010). Primark Stores Ltd. Retrieved November 2, 2011, from Hemscott Guru. Morningstar. (2009). Sector Performance, Apparel Retailers. Retrieved November 2, 2011, from Hemscott Guru: Website:www.hemscott.com/guru/sectors/performance.do?sector=6201&tracker=5371@SEC&name=Apparel-Retailers New Look Group Ltd Next Plc. (2011). About Next. Retrieved November 2, 2011, from Next Website: http://www.nextplc.co.uk/about-next.aspx Primark Stores Ltd Ritter, J. R., & Welch, I. (2002). A Review of IPO Activity, Pricing, and Allocations. The Journal of Finance , 57 (4), 1795–1828. The Times 100. (2010). Providing consumers with ethically sourced garments. Retrieved November 2, 2011, from The Times 100 Business Case Studies: www.thetimes100.co.uk/downloads/primark/primark_15_full.pdf (2010) Appendix 3: Financial ratios of four companies in UK retail industry (2010) | Ratio | Primark Stores Ltd | Matalan Retail Ltd | New Look Group Ltd | Next Plc |