Comparative Financial Analysis for the financial year 2012 for DAVID JONES
Word Count: words
Members of the Group (surname underlined):
LIM EWE LEE 30109302
WONG MEI LIN 30109335
TEH KONG CHENG 30111788
Executive Summary David Jones, an Australia base company with its core business of operate departmental store in Australia, the company focus are beauty and cosmetic products, women’s wear, women’s accessories and footwear, menswear and accessories, food products, toys, home products, and products for babies and children. This report has been prepared with the objective of examine financial health of David Jones. The achieve the objective, five key financial ratio analysis: Profitability, Liquidity, Asset
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The national retail chain operates about 35 stores offering Australian and international brands of apparel, accessories, footwear, cosmetics, home furnishings, and food.
Ratios Analysis
Ratios analysis examines the relationship between two quantitative amounts with the aim of expressing the relationship in ratio or percentage form (Birt et al., 2010). The details calculation is showed in Appendix 1.
Analysis of Financial Statements
The following financial analysis for David Jones is based on the five categories of ratios which include profitability ratios, efficiency ratios, liquidity ratios, capital structure ratios, and market performance ratios. The detailed calculation for each category of ratios can be obtained in Appendix 1.
Figure 1: Asset Profitability of Analysis
Source: Own Built *
Profitability Analysis
An entity’s ability to generate profit and return on investment is one of the prime indicators of its financial health (Birt et al., 2010). Profitability ratios inform users as to the profit returns associated with their equity investment. In the case of David Jones, the Return on Equity (ROE) is higher in 2011 than 2012 as the company is experiencing a higher profitability on sales, this indicates that the owners and the shareholders are able to gain returns faster in 2011. Referring to appendix 1, in 2011 the Return on Equity (ROE) of the company was reported at 22% which mean that from every $1 invested there is a
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David jones is named as the oldest departmental store in Australia and also it is still operating from its real name. Its first outlet opened in Sydney in 1838 by David Jones. Their mission is to sell the best and most exclusive goods (David Jones 2014).
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