Describe about the Financial Analysis of JB HI-FI Limited.
The above analysis has explored that increase in sales is an indication of strong foundations. According to the financial statement of the company, JB Hi-fi Limited, it can be concluded that the revenue and the net profit after tax is gradually increased. This shows that there has been an increase in the efficiency and profitability position. Again, the working capital position of the company also shows that the company can meet its current liability obligations. This also indicates that the firm will make debt payment on time. The asset position of the company demonstrated that it has enough liquid cash to meet short-term liability obligations. In addition, the total dividend that would be paid by the corporation also holds positive. The earnings per share are also increased over the period. The board has decided to pay significant proportion of the profit in the form of dividend and hold on the rest to may be because the board might want to invest in a new project of the company. It means, the shareholders of the company is getting return from the investment on regular interval as well as the wealth is enhancing each year.
The above analysis has shown that the performance of the organization is improving and at present the company is in above average risk tolerance zone. Therefore, the investor can buy this stock at this moment. In other words, it can be said that the recommendation is “strong buy”. At the same time, it has also apparent that the current growth of the company is positive enough in compare to the industry benchmark. However, there is a question in investor’s mind that whether the company will able to maintain its growth in near future or not. In this context, it can be recommended that the organization is to review its financial performance on frequent interval and has to ensure the investors while announcing the dividend.
Jbhifi.com.au. (2016). JB Hi-Fi | Australia’s Largest Home Entertainment Retailer. [online] Available at: https://www.jbhifi.com.au [Accessed 21 Sep. 2016].
Price, J., 2012. Return on equity traps and how to avoid them. Equity, 26(3), p.4.
Describe about the Financial Analysis of JB HI-FI Limited.
The above analysis has explored that increase in sales is an indication of strong foundations. According to the financial statement of the company, JB Hi-fi Limited, it can be concluded that the revenue and the net profit after tax is gradually increased. This shows that there has been an increase in the efficiency and profitability position. Again, the working capital position of the company also shows that the company can meet its current liability obligations. This also indicates that the firm will make debt payment on time. The asset position of the company demonstrated that it has enough liquid cash to meet short-term liability obligations. In addition, the total dividend that would be paid by the corporation also holds positive. The earnings per share are also increased over the period. The board has decided to pay significant proportion of the profit in the form of dividend and hold on the rest to may be because the board might want to invest in a new project of the company. It means, the shareholders of the company is getting return from the investment on regular interval as well as the wealth is enhancing each year.
The above analysis has shown that the performance of the organization is improving and at present the company is in above average risk tolerance zone. Therefore, the investor can buy this stock at this moment. In other words, it can be said that the recommendation is “strong buy”. At the same time, it has also apparent that the current growth of the company is positive enough in compare to the industry benchmark. However, there is a question in investor’s mind that whether the company will able to maintain its growth in near future or not. In this context, it can be recommended that the organization is to review its financial performance on frequent interval and has to ensure the investors while announcing the dividend.
Jbhifi.com.au. (2016). JB Hi-Fi | Australia’s Largest Home Entertainment Retailer. [online] Available at: https://www.jbhifi.com.au [Accessed 21 Sep. 2016].
Price, J., 2012. Return on equity traps and how to avoid them. Equity, 26(3), p.4.
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