Financial Analysis Report
Table of Contents
INTRODUCTION 2
COMPANY PROFILES 3
HMV GROUP PLC 3
THE GAME GROUP PLC 3
VERTICAL ANALYSIS 4
HMV 4
GAME 5
HMV VS GAME 5
TREND ANALYSIS 6
HMV 6
GAME 7
HMV VS GAME 7
HMV: FINANCIAL POSITION VERTICAL AND TREND ANALYSIS 8
GAME: FINANCIAL POSITION VERTICAL AND TREND ANALYSIS 11
HMV VS GAME 12
PROFITABILITY 13
GROSS PROFIT, MARK UP AND NET PROFIT MARGIN 13
HMV 13
GAME 13
RETURN ON CAPITAL EMPLOYED 14
PYRAMID RATIOS 15
RETURN ON EQUITY 16
EFFICIENCY 17
RECIEVABLES, PAYABLES AND INVENTORY PERIODS 17
ASSET AND INVENTORY TURNOVER 19
CASHFLOW RATIOS 20
CASHFLOW ADEQUACY 20
OPERATING CASH CYCLE 21
GEARING 22
DEBT RATIO AND INTEREST COVER 22
INVESTMENT RATIOS 23
PRICE EARNINGS AND DIVIDEND COVER 23
EARNINGS PER SHARE 24 DIVIDEND YIELD RATIO 24
HMV 25
SEGMENTAL ANALYSIS 26
HMV 26
GAME 28
LIMITATIONS 30
BIBLOGRAPHY 31
APPENDIX 32
INTRODUCTION
For investors to invest in a company a full analysis of the entity must be done to ensure that a good investment is made. This report analyses two companies, namely; HMV and The Game Group plc over the past three years (2009, 2010 and 2011). A brief explanation of the companies will be addressed explaining their position in the industry. Most of the analysis is numerical and a large proportion is presented graphically. Brief descriptions of findings will be included. COMPANY PROFILES
HMV GROUP PLC
HMV Group is the UK’s leading specialist retailer of filmed entertainment, games, music and portable digital technology products, with a portfolio of live entertainment venues and music festivals. HMV operates from entertainment stores and websites in the UK & Ireland, Hong Kong and Singapore. The brand also extends into entertainment-related experiences, including ownership of live music venues and summer festivals across the UK and related ticketing activities (Anon 2012).
THE GAME GROUP PLC
The Game group is Europe’s leading specialist PC and video games retailer. They
INTRODUCTION 2
COMPANY PROFILES 3
HMV GROUP PLC 3
THE GAME GROUP PLC 3
VERTICAL ANALYSIS 4
HMV 4
GAME 5
HMV VS GAME 5
TREND ANALYSIS 6
HMV 6
GAME 7
HMV VS GAME 7
HMV: FINANCIAL POSITION VERTICAL AND TREND ANALYSIS 8
GAME: FINANCIAL POSITION VERTICAL AND TREND ANALYSIS 11
HMV VS GAME 12
PROFITABILITY 13
GROSS PROFIT, MARK UP AND NET PROFIT MARGIN 13
HMV 13
GAME 13
RETURN ON CAPITAL EMPLOYED 14
PYRAMID RATIOS 15
RETURN ON EQUITY 16
EFFICIENCY 17
RECIEVABLES, PAYABLES AND INVENTORY PERIODS 17
ASSET AND INVENTORY TURNOVER 19
CASHFLOW RATIOS 20
CASHFLOW ADEQUACY 20
OPERATING CASH CYCLE 21
GEARING 22
DEBT RATIO AND INTEREST COVER 22
INVESTMENT RATIOS 23
PRICE EARNINGS AND DIVIDEND COVER 23
EARNINGS PER SHARE 24 DIVIDEND YIELD RATIO 24
HMV 25
SEGMENTAL ANALYSIS 26
HMV 26
GAME 28
LIMITATIONS 30
BIBLOGRAPHY 31
APPENDIX 32
INTRODUCTION
For investors to invest in a company a full analysis of the entity must be done to ensure that a good investment is made. This report analyses two companies, namely; HMV and The Game Group plc over the past three years (2009, 2010 and 2011). A brief explanation of the companies will be addressed explaining their position in the industry. Most of the analysis is numerical and a large proportion is presented graphically. Brief descriptions of findings will be included. COMPANY PROFILES
HMV GROUP PLC
HMV Group is the UK’s leading specialist retailer of filmed entertainment, games, music and portable digital technology products, with a portfolio of live entertainment venues and music festivals. HMV operates from entertainment stores and websites in the UK & Ireland, Hong Kong and Singapore. The brand also extends into entertainment-related experiences, including ownership of live music venues and summer festivals across the UK and related ticketing activities (Anon 2012).
THE GAME GROUP PLC
The Game group is Europe’s leading specialist PC and video games retailer. They