The company JB Hi-Fi has major business and operations in countries of New Zealand and Australia. It acts as a vendor and merchant of the goods of customer’s value like video games, CD, s, DVD’s and mobile phones. It is among the most leading and successful business organizations in the industry and also among the fastest developer in the overall market.
The report considers and takes into account the measuring of the value of the market and the complete analysis and evaluation of the financial data and statement for the actual assessment of the structure of the company established in the market. The company being the leading developer had opened new stores in Sydney and Melbourne for the growth in revenues and the overall earnings. The major competitors like Harvey Norman and Target Australia are also leading in the industry and the company has been quoted in the Australian Stock Exchange.
Scope and Limitations of the research
The research has the scope of doing the analysis and getting aware of the overall structure of the market of the JB Hi-Fi Company. The company has the scope in knowing about the market utility and the value of the portfolio. The valuation of the portfolio will be carried out to know the necessity of the gain or loss of the company.
There are certain limitations in the research done and it includes the techniques of the analysis. Further, only the analysis of the limited weeks i.e. from Week 3 to Week 10 has been undertaken that means it is too limited. The limitations can lead to an inaccuracy in the research that may lead to the overall failures in the research.
Methodology
The methods and techniques adopted by the researcher were two in number. The first method was the analysis of the market value and the second was the evaluation of the financial statements. The market prices of the historical period and data are to be collected and raised from the company’s website. There had been the evaluation methods regarding the records and statements of finance through the website and the annual reports of the company.
Findings & Analysis
Description
|
Particulars |
Description |
|
Company’s Products and services |
Computers, Portable Audio, games, DVD music, Blu-Ray, TVs, Tablets, Cameras, Speakers, Home Theatre and recorded music. |
|
Chief Executive Officer |
Mr. Richard Murray |
|
Salary of CEO |
$2750,596 |
|
Latest Dividend |
1.02857 was paid on 23rd Feb 2017 |
|
Share Price (52 week High And Low) |
High- 25.77 Low- 25.31 |
There had been a drastic decrease in the share prices and there was a downward trend in the market structure from the 6th of March 2016 continuing until the 6th of April 2016. The lowering of the prices continued within the period of Week 3 to 10 and the lowest share price of the company was 23.43 that existed on the 21st March 2016. After the start of the 6th of April 2016, there was a settling down of the prices and also maintained its position at an approximate price of $25.
In comparison to the share index i.e. ASX 200, the shares of the company JB Hi-fi performed in a poor manner. The scenario continued until the period of 6th of April 2016 and then both started to have a stable situation and trend for a limited period of time. Both the company and the index started have the movement in the prices that had an upward trend. Although, the stock did not have a superior performance, the shares of the company never became unstable or poor like before i.e. as discussed by the above analysis.
The market had positive responses to the share price movement. In conclusion, each of the shares of JB Hi-Fi almost performs in the same way like the ASX200 index share. On the other hand, owing to internal performance of the new CEO there can be a noteworthy force on the share prices of the company. Nonetheless, the changes in the ASX200 index can have a direct or indirect control on the share prices of JB Hi-fi.
Analysis of the gain or loss from portfolio
Share price at 6th march 2017= 26.06
Number of share purchased at 6th march 2017= 191
Total Investment = 26.06 x 191 = $4977.46
Share price at 6th May 2017 = 25.65
Number of shares holding =191
Market values of 755 shares =25.65*191= $4899.15
Profit or loss at 6th may 2017= $4977.46 – $4899.15= 78.31
The gain is $78.31 as per the tracking period under the calculation.
The shares must not be sold at the early stage i.e. at the current stage as the company has been maintaining a stable position or trend in the market. The new CEO has been capable and must take steps to control and maintain the same. The gain earned is also a major step to uphold the shares and not sell the same.
Identification of the Financial Data of important nature
The figures for 1 July 2015 to 30 June 2016 are as follows:
|
Particulars |
Amount ($‘000) |
|
Revenue / Sales |
3,954,467 |
|
Interest Expense |
3,857 |
|
EBIT(Earnings before Interest and Income Tax) |
258,215 |
|
Net Profit Before Tax |
217,839 |
|
Net Profit After Tax |
152,181 |
|
Current Assets |
702,518 |
|
Total Assets |
992,381 |
|
Current Liabilities |
446,883 |
|
Total Liabilities |
587,679 |
|
Total Equity |
404,702 |
Analysis of the Financial Ratios
Profitability ratio
2016
= (152,181/3954467)*100
=3.85%
There was an increment in the ratio from the 3.74% in year 2015 to 3.85% in 2016. The ratio is the total net profits earned by the company on the total sales.
Stability Ratio
2016
= 110/405
=0.27
There was a decline in the ratio i.e. from 0.41 in 2015 to 0.27 in 2016. The debt to equity ratio represents the total debts by total equity. It thus reveals the amount of the finances that can be borne by the shareholders and investors of the company.
Liquidity
2016
= 702518/446883
=1.57
There was a decline in the ratio i.e. from 1.62 in year 2015 to 1.57 in year 2016. The ratio represents that the current assets have a capability of meeting up the short term liabilities of the company.
Capital Structure
2016
Financial leverage= 2.45
There was a decline in the ratio i.e. from 2.61 in 2015 to 2.45 in 2016 and the same corresponds to the circumstances of lower funding from the investors.
Reference List
Benson, P., 2014. Sharing is caring. Electrical Connection, (Autumn 2014), p.132.
Brigham, E. F., and Ehrhardt, M. C. (2013). Financial management: Theory & practice. Cengage Learning.
Frias?Aceituno, J. V., Rodríguez?Ariza, L., and Garcia?Sánchez, I. M. (2014). Explanatory factors of integrated sustainability and financial reporting. Business strategy and the environment, 23(1), 56-72.
Gibson, C. (2012). Financial reporting and analysis. Nelson Education.
https://www.asx.com.au/asx/research/company.do#!/CCL/statistics/shares
https://www.smh.com.au/business/markets/currencies/skittish-australian-dollar-adjusts-after-boost-from-us-fed-20160320-1m3u6o.html
Lukas, B.A., Whitwell, G.J. and Heide, J.B., 2013. Why do customers get more than they need? How organizational culture shapes product capability decisions. Journal of Marketing, 77(1), pp.1-12.
Saunders, A., and Cornett, M. M. (2014). Financial institutions management. McGraw-Hill Education.
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