Tag: IBISWorld

What is your conclusion about the solvency and efficiency of the company?How successful is ABC Company relative to the industry average and leaders in the small specialty retail store industry?

THE BALANCE SHEET SLP 2

Assume that ABC Company is a small specialty retail store.

Ratios are relevant when assessed over time or across companies. IBISWorld is a comprehensive resource containing market research and statistics, which can be used to compare ABC Company to the industry and leaders in the industry.

Below is a brief introduction to financial ratios using IBISWorld and screenshots that provide guidance for accessing IBISWorld via the Trident library.

Required

Part 1

First, choose three ratios from the background materials. ABC is a simple organization (see balance sheet in case), so pick ratios for which sufficient financial data is available. Verify that at least one of the ratios is included in the IBISWorld database.

Identify the name of the ratio, the formula, and show your computations.

Part 2

Next, respond to the following questions.

Comment on the purpose and information conveyed by each ratio.

What did you learn about ABC Company by reviewing the three ratios?

What is your conclusion about the solvency and efficiency of the company?

How successful is ABC Company relative to the industry average and leaders in the small specialty retail store industry? Write two paragraphs or more for this question. Refer to an actual ratio found in the IBISWorld database to support your conclusion.
A suggested approach to the assignment:

Step 1

Watch the brief introduction to financial ratios using IBISWorld as suggested.

Step 2

Access the IBISWorld database in the Trident library. See screenshots on this page for guidance.

Step 3

Choose three ratios from the background materials for which information is available in the ABC Company’s balance sheet. Make sure at least one of the ratios is included in the IBISWorld database.

A General Example Not Using to ABC Company data.

EFG is a business with $42,000 of current assets and $40,000 of current liabilities. Therefore, the current ratio is:

Current ratio = current assets / current liabilities
Current ratio = $42,000 / $40,000
Current ratio = 1.05 (or 1.05 to 1 or 1.05:1)

EFG’s current ratio of 1.05 may be small or large depending on the industry. For example, which factors should be considered in interpreting the ratio?

Step 4

Use data from the module 2 case balance sheet to compute ratios. Identify each ratio and show the computations.

Step 5

Analyze and interpret.

Step 6

Locate at least one of the industry ratios computed above in the IBISWorld database to make a comparison to the ABC Company.

Online Library Step One

Step 2

Online Library Step 2

Step 3

IBIS Step 3

Step 4

IBIS Step 4

Step 5

IBIS Step 5

This short presentation provides the same information as above.

SLP Assignment Expectations

Identify three balance sheet ratios. Use numbers from ABC’s balance sheet. Show the formula and computations.

 

Write a 2000-word report based on the provided context scenario, financial information and ratios.Discuss the ethical implications of this proposal from the VP of Operations.

Financial Management

Write a 2000-word report based on the provided context scenario, financial information and ratios. Conduct a peer analysis of a competitor company of your choosing and the given case study company. Consider all relevant financial principles, concepts and theories.

Conduct the necessary financial analysis using appropriate techniques, tools and frameworks. Make decisions and recommendations based on the analysis and consider ethical implications and limitations.

Important- have included an example provided by the university as a guide! Please do not use this to be re-created but rather as a guide as to what is being looked for.

You are part of the management team of Amazing Lounge Pty Ltd (AL Pty Ltd). AL Pty Ltd is a private company specialising in the retailing of high-end home furniture. During the annual strategic review for 2021, a key focus is on analysing the financial performance of the company and mapping its growth pathway for the next 5 years. Financial information and ratios for the past 5 years have been calculated and provided to the management team.

The company has been investing substantially in capital projects and building its stock in the last few years. The Vice President (VP) of Operations is very keen to keep increasing the stock level as it provides a wide range of goods available for sale, and to continue spending on capital by opening new stores (the company has limited online presence to-date).

Write a report for the management team that addresses points 1 to 5 below:

Comment on the performance trends for current ratio and return on total assets of AL Pty Ltd using the ratios provided and noting 2020 was impacted by COVID-19 lock-downs. AL Pty Ltd operates in the furniture retail industry. Choose another company in the same industry, preferably a publicly listed company with easy access to the required relevant financial information.

Using the DuPont Method, provide a critical analysis of AL Pty Ltd’s Return on Equity performance for the last 5 years relative to the competitor you have chosen. complete the analysis using publicly available data for the competitor (e.g. IBISWorld and/or annual reports).

Comment on the view taken by the VP of Operations that the company should be increasing stock level and opening new stores. Take into account all key finance principles, concepts and theories which are relevant.

Also, 2020 was not a good year for AL Pty Ltd and 2021 started quite slow with the business seeing a large number of returns of furniture (refunds). The VP of Operations has proposed that these refunds be posted in the 2022 results to give some breathing space for 2021. Discuss the ethical implications of this proposal from the VP of Operations.

One of the suggestions from the CEO is to consider floating the company to raise capital. Evaluate the pros and cons of listing the company and becoming public.

Identify and discuss the limitations of your analysis.

Based on your analysis and discussion, make recommendations as to whether AL Pty Ltd should continue on the same trajectory and whether listing the company would be beneficial. Suggest other alternative growth options for the company as well.