Financial Analysis of Jd Sports
Executive Summary
Faced with the adverse economic environment, the sports retail industry is fiercely competitive. All the companies involved take various measures to maintain competitive advantage and improve profitability. When it comes to whether a corporation is worth to invest, financial analysis is greatly needed, since it can provide sufficient information to investors from different viewpoints. After in-depth financial analysis of JD Sports Fashion (JD), one of the leading specialised sports retailers in UK, it can be concluded that JD is worthwhile for a pension fund to invest.
Contents
Introduction 3
Company Profile 3
PEST Analysis 5
SWOT Analysis 5
Strengths 6
Weaknesses 7
Opportunities 7
Threats 7
Historical Performance 8
Strategy Analysis 8
Segmentation 9
Product-Strategy 9
Financial Market Strategy 12
Financial Analysis 12
Overall Profitability 13
Operating Activities Performance Product-Strategy 13
Working Capital Management 15
Non-current Assets Management 16
Financial Leverage Ratio Analysis 17
Cash Flow Analysis 20
Forecasts 23
Sales Growth 23
NOPAT Margin 24
Net Working Capital to Sales Ratio 24
Net Non-current Assets to Sales Ratio 24
After Tax Cost of Net Debt 25
Valuation 25
Sensitivity Analysis 26
Conclusion and Recommendation 27
1. Introduction
Since established in 1981, JD has become one of the leading sportswear retailers in UK and Ireland. To develop sufficient evidences for whether to invest JD, the report will firstly give a brief description of JD. Secondly, it will conduct JD’s PEST and SWOT analysis. Thirdly, JD’s historical performance and the future prospects will be examined both from its strategy analysis and financial analysis
Faced with the adverse economic environment, the sports retail industry is fiercely competitive. All the companies involved take various measures to maintain competitive advantage and improve profitability. When it comes to whether a corporation is worth to invest, financial analysis is greatly needed, since it can provide sufficient information to investors from different viewpoints. After in-depth financial analysis of JD Sports Fashion (JD), one of the leading specialised sports retailers in UK, it can be concluded that JD is worthwhile for a pension fund to invest.
Contents
Introduction 3
Company Profile 3
PEST Analysis 5
SWOT Analysis 5
Strengths 6
Weaknesses 7
Opportunities 7
Threats 7
Historical Performance 8
Strategy Analysis 8
Segmentation 9
Product-Strategy 9
Financial Market Strategy 12
Financial Analysis 12
Overall Profitability 13
Operating Activities Performance Product-Strategy 13
Working Capital Management 15
Non-current Assets Management 16
Financial Leverage Ratio Analysis 17
Cash Flow Analysis 20
Forecasts 23
Sales Growth 23
NOPAT Margin 24
Net Working Capital to Sales Ratio 24
Net Non-current Assets to Sales Ratio 24
After Tax Cost of Net Debt 25
Valuation 25
Sensitivity Analysis 26
Conclusion and Recommendation 27
1. Introduction
Since established in 1981, JD has become one of the leading sportswear retailers in UK and Ireland. To develop sufficient evidences for whether to invest JD, the report will firstly give a brief description of JD. Secondly, it will conduct JD’s PEST and SWOT analysis. Thirdly, JD’s historical performance and the future prospects will be examined both from its strategy analysis and financial analysis