Financial statement analysis
Report
To: Potential Investors
From: An Accountant
Date: 12/12/2013
Subject: Analysis of Financial Statements
This report will focus on two representative fashion companies in UK. They are Burberry and Ted Baker. Both of them listed on London Stock Exchange and belongs to personal goods industry. Burberry is a global luxury brand which operates in the luxury goods manufacture, retailer and wholesales segments. The company mainly operates in Europe, Asia, Australasia and Americas and provides non-apparel accessories and clothing for adults and children. Ted baker is a creative global luxury brand. Similarly, Ted Baker also provides accessories and clothing for adults and children. They mainly operating in UK, Asia, Australasia and America. We will evaluate the performance of each of them and give advice to potential investors. In this report, “2009” means the year ended 31 march 2009 in Burberry. “2009” means the year ended 31or 30 January 2009 for Ted Baker.
1. The profitability (performance)
We will use four main ratios to evaluate their profitability. Firstly, the Gross profit margin. During 2009 to 2011, the gross profit margin for both of them has been improved, especially in Burberry from 55.41% to 67.26%. In terms of net profit margin, the performance for Ted Baker has increased stably, but the performance for Burberry fluctuates dramatically as its operating profit is negative in 2009. Although the net profit margin goes up significantly during the period, the average profit margin is still lower than Ted Baker. The Return on equity and return on capital employed of Ted Baker still grew considerably. Although these two ratios in Burberry has improved higher than in Ted Baker, it is more volatile during the period. So, Ted Baker’s average ratios is better than Burberry. In this three years, both companies have up performance considerably. And it is obviously, Ted Bake had been more profitable and stable than in Burberry. But Burberry has higher growth
To: Potential Investors
From: An Accountant
Date: 12/12/2013
Subject: Analysis of Financial Statements
This report will focus on two representative fashion companies in UK. They are Burberry and Ted Baker. Both of them listed on London Stock Exchange and belongs to personal goods industry. Burberry is a global luxury brand which operates in the luxury goods manufacture, retailer and wholesales segments. The company mainly operates in Europe, Asia, Australasia and Americas and provides non-apparel accessories and clothing for adults and children. Ted baker is a creative global luxury brand. Similarly, Ted Baker also provides accessories and clothing for adults and children. They mainly operating in UK, Asia, Australasia and America. We will evaluate the performance of each of them and give advice to potential investors. In this report, “2009” means the year ended 31 march 2009 in Burberry. “2009” means the year ended 31or 30 January 2009 for Ted Baker.
1. The profitability (performance)
We will use four main ratios to evaluate their profitability. Firstly, the Gross profit margin. During 2009 to 2011, the gross profit margin for both of them has been improved, especially in Burberry from 55.41% to 67.26%. In terms of net profit margin, the performance for Ted Baker has increased stably, but the performance for Burberry fluctuates dramatically as its operating profit is negative in 2009. Although the net profit margin goes up significantly during the period, the average profit margin is still lower than Ted Baker. The Return on equity and return on capital employed of Ted Baker still grew considerably. Although these two ratios in Burberry has improved higher than in Ted Baker, it is more volatile during the period. So, Ted Baker’s average ratios is better than Burberry. In this three years, both companies have up performance considerably. And it is obviously, Ted Bake had been more profitable and stable than in Burberry. But Burberry has higher growth