公司财务报表分析英文版.docx

ANALYSIS AND INVESTMENT CONSULTING REPORT ON MICHAEL HILL INTERNATIONAL LIMITEDDocument Type: Group AssignmentGroup members: Hong Yang 201120021319 Lv Pin 201120021426 Guo Pan 201120021423 Bai Yilan 201120021425 Zhu Ziyan 201120021433Lecturer: Murray SmartDate Published: 27/02/2014CONTENTS PAGEIntroduction - 4 Methodology - 4 Company Background - 5The Analysis of Financial Statement - 6Investment Ratios - 6Gearing Ratios - 7Profitbility Ratios - 7Liquidity Ratios - 9Activity Ratios - 10Operating Ratios - 11The Analysis of Business Environment - 11Recommendations to Investors - 13Conclusions - 14References - 15Appendices - 16LIST OF JLLUSTRATIONS PICTURES PAGE1. Michael Hill companys logo - 5 TABLES 1. Investment ratios of 2012&2013 - 62. Gearing ratios of 2012&2013 - 73. Gross profit to sales of 2012&2013 - 74. Profit margin on sales of 2012&2013 - 85. Return on capital employed of 2012&2013 - 86. Profitability ratios of 2012&2013 - 87. Liquidity ratios of 2012&2013 - 98. Activity ratios of 2012&2013 - 109. Operating ratios of 2012&2013 - 1110. 2009-2014 world economic growth trend（%） - 12CHARTS1. 2009-2014 world economic growth trend（%） - 12INTRODUCTIONThis investment analysis report on Michael Hill company is prepared for the Sallys Superannuation Trust. The report would ananlyse and interpret the non-financial and financial information contained in the 2013 Annual Report for Michael Hill International Ltd, and then there would be some recommendations at the end of the report. Financial StatementIn this part, the report would show the investment ratios, gearing ratios, profitability ratios, liquidity ratios, activity ratios, operating ratios, through the information contained in the 2013 Annual Report for MHI. We would show the details of calculation workings of ratios in the appendix. Non-Financial Statement In this part, the report would show the company background , even the business environment, through the information contained in the 2013 Annual Report for MHI and some independent websites.METHODOLOGYAll information we used in this report was collected by news, articles, annual report and some independent websites which measured in the bibliography.ANALYSIS AND INVESTMENT CONSULTING REPORT ON MICHAEL HILL INTERNATIONAL LIMITEDPicture 1:Michael hill s logo Sourse: /phoenix.zhtml?c=170266&p=irol-reportsannual.Company Background Michael Hill International Limited owns the brand “Michael Hill”, the Company story began in 1979,as at 30 June 2013.It operates 267 retail jewellery stores in Australia, New Zealand, Canada and the United States. For shareholders, the dividend for the year was 6.5 cents per share, up 18.2% from 5.5 cents in 2011-12with the final dividend of 4.0 cents per share being payable on 4 October 2013. we can see that all four segments improve their bottom line results in 2012-13 despite continued pressure on the retail sector, as leading teams could keep team working in high effect and economically operates. And their sponsorships and donations of products, gift vouchers and csh amounted to$488,000.It has been a member of the World Federation of International Music Competitions and the sponsorship of the NZPGA championship in2013.MH I believes that outstanding business performance must be supported by the highest standards of corporate behaviour towards their employees, customers and other stakeholders. The Analysis of Financial Statement(1) Investment ratiosTable 1. Investment ratios of 2012&2013Investment ratio20132012EPS0.1050.095P/E ratio12.4810.32DPS0.0650.055Dividend yield0.0500.056Based on the figure in investment ratio table ,we can see that even EPS and P/E ratio both had a slightly increase(0.01,2.16), the number still stay on a normal standard. So the earning for each ordinary share and the market confidence in the shares of this company are both not high. About DPS, though it seems like increased(0.01) little on actual return per share, in fact, on the percentage of a shares value is decreased(0.006). And, they both stay on a pretty low standard, that means we cannot receive too much from dividends. (2)Gearing ratios Gearing ratio20132012Gearing ratio0.100.11Interest cover15.911.8Table 2. Gearing ratios of 2012&2013 The table shows that this company has a pretty low gearing ratio and had a slightly decrease(0.01) at this period. That means that the company have a high ability to repay the liabilities, though there was a general feeling that high gearing was good, leverage was respectable, and capital gains were inevitable before 2007 credit crisis, nowadays, we are increasing emphasis on the security of investments. And as the high interest cover, this company have a high ability to pay interest.(3) Profitability RatiosTable 3. Gross profit to sales of 2012&2013Gross profit to sales20132012Sales549,419511,179Cost of sales199,349194,573Gross profit350,070316,606Ratio63.71%61.94%Table 4. Profit margin on sales of 2012&2013Profit margin on sales 20132012Net profit before taxes47,04042,036Sales549,419511,179Ratio8.56%8.22%Table 5. Return on capital employed of 2012&2013Return on capital employed 20132012EBIT50,19345,892Average common stockholders equity206,865194,359Ratio24.26%23.61%Table 6. Profitability ratios of 2012&2013Profitability ratios20132012Gross profit to sales63.71%61.94%Profit margin on sales8.56%8.22%ROCE24.26% 23.61%Based on the figure in profitability ratio table, we can see that gross profit to sales, profit margin on sales and ROCE all have increase (1.76, 0.34, and 0.65). Especially gross profit to sales has a substantially increase. From gross profit to sales and profit margin on sales, we can see that the corporation has good ability to recover costs to produce a reasonable profit and has effectiveness of pricing and production in terms of sales. About ROCE, even the number has a slightly increase, it still stay a normal standard. So the ability of return to shareholders and lenders on the total investment they have in the business is high.(4)Liquidity RatiosTable 7. Liquidity ratios of 2012&201320132012Current ratios2.9593.066Acid test ratio0.4290.348Working capital142,273142,142The debt ratio0.4060.399According to the statements of financial position of Michael Hill company during the time period 2012-2013, it can be seen that the company has the current ratio in 2012 slightly bigger than 2013. However, except for inventories, which have a lower liquidity in assets, the acid test ratio illustrates that this company can more accurately reflect its short-term solvency. Michael Hill Company also has a good future in working capital that indicates the company has a good business ability to meet its short-term commitments. Nevertheless, based on the debt ratios, it is clearly that with the increase of the ratio the higher risk being assumed by the creditor and lower flexibility to borrow in the future. (5)Activity RatiosTable 8. Activity ratios of 2012&201320132012Inventory turnover1.0751.081Days sale in inventory 336.48350.83Account receivable turnover29.43243.175Average collection period12.4018.454Non-current assets turnover9.14810.856Total assets turnover1.5781.580MHIs inventory turnover ratio remained stable and at a low rate during 2012-2013(which is about 1,075 times a year and 1.081 times a year respectively). Therefore, it indicates that the company accounts for a high level of inventory and have a low liquidity. So it is not strong for short-term debt paying ability of the company.According to non-current assets turnover, the rate is considerably high during the 2012 and 2013.The ration indicates that the assets are being used efficiently. And the companys total assets turnover rate is low, so turnover days longer. (6) Operating RatioTable 9. Operating ratios of 2012&201320132012NPAT to average shareholders funds0.1940.188EBIT to total assets0.1440.142From the NPAT to average shareholders funds, obviously, the rate for Michael Hill Company is quite high and increased in 2013. Shareholders can get a high profit in average shareholders funds. And the EBIT to total assets, which shows profitability of the company, changed little in the past two years and indicated the company has considerable profitability.The Analysis of Business Environment2012-2013, world economy recovers slowly. Developed economies tended to get better, but the world economy is in a stage of the fragile recovery under the policy stimulus. Emerging economies structural adjustment hysteresis, cash inflows decreases, the financial market turmoil, the slowdown in economic growth. Table 10. 2009-2014 world economic growth trend（%） 200920102011201220132014World Economy-Developed countries-3.43.02.0America-Euro land-4.42.01.5-0.6-0.41.0Japan-5.54.7-0.62.02.01.2Emerging economies and Developing countriesChart 1. 2009-2014 world economic growth trend（%） (Note: Data in 2013 and 2014 is predicted) 2012-2013, world economy recovers slowly. Developed economies tended to get better, but the world economy is in a stage of the fragile recovery under the policy stimulus. Emerging economies structural adjustment hysteresis, cash inflows decreases, the financial market turmoil, the slowdown in economic growth; Developed economies still face the problems of high unemployment and high deficits. Growth momentum is insufficient, economic growth is still below the potential level. Overall, the world economy tends to improve, but facing the difficulties and risks should not be ignored.Recommendations to Investors Michael Hill Company has a low liquidity in inventory because of the special characteristics of the company. But relatively speaking, the gearing ratio is low during these two years so the companys repayment ability is considerably strong. It indicates that the company is easier to raise funds and facing bankruptcy risk is very small. Furthermore, after the 2008 financial crisis, despite the economys modest recovery but economic growth was slow in coming. So, as for conservative investors it would be a good choice to invest in this due to its low risks. On the other hand, the company has high profit for the past two years and also has a slightly increase. But the rate of return on investment is not high and a downward trend, the market price is also not high. All in all, for these investors who are looking for high return its not a good choice. Although, the companys managers have been pay more attention to the internal structure of company management and have a correct moral values. So these factors may beneficial to the development prospects of the company Conclusions In the report,we mainly analysis the financial and non-financial information contained in the 2013 Annual Report for Michael Hill International Ltd, and even the whole business environment.The luxury jewellery and timepieces category increased by 21% in current value terms to reach RM630 million in 2012. Growth was largely supported by increasing levels of income among consumers, driven by the strong economic growth that continues in 2013. With rising disposable income, consumers sought to purchase luxury jewellery and timepieces to fulfil either or both their aspirational and investment needs. (Robyn,2013)Although the future is great ,investment have their respective advantages and disadvantages. We should always be careful!REFERENCES1.Robyn.(2013). Luxury Jewellery and Timepieces in Malaysia.online.:Linker. Available from: /p01517531/Luxury-Jewellery-and-Timepieces-in-Malaysia.html Accessed 26 February 20142.Anon.(2013). 2013 Annual Report for Michael Hill International Ltd (MHI).online.:MHI.Available from: /phoenix.zhtml?c=170266&p=irol-reportsannual Accessed 22 February 20143.Anon.(2013) .2013-2014 The Analysis Of World Business Environment .online.:MHI.Available from: /News/mofcom/2013-12/4709871.htmlAccessed 22 February 2014APPENDICESInvestment ratio part P/E ratio 2013 2012Share price $1.31 $0.98Earnings per share 0.105 0.095Ratio 12.48 10.32Dividend yieldDPS 0.065 0.055Current share price $1.31 $0.95Ratio 0.050 0.056Gearing ratio partGearing ratioShareholders funds $ 6869 6053Non-current li