Jb Hi Fi Financial Report 2010
Executive Summary
The purpose of this report is to evaluate the findings of an analysis conducted on JB Hi-Fi (JBH). This evaluation will be assessed to present a recommendation to acquire shares to add to an investment portfolio. This report will assess JBH relative to profitability, asset efficiency, liquidity, capital structure and market performance, before conducting a forecast and risk analysis. Annual reports from the past three years and analysts published views were used as the basis for the final recommendation. These evaluations will show JB Hi-Fi to be a strong investment opportunity.
Table of Contents
Introduction Page 1
JB Hi-Fi Company Profile Page 2
Financial Analysis Page 3
• Profitability Analysis Page 3
• Asset Efficiency Analysis Page 5
• Liquidity Analysis Page 6
• Capital Structure Analysis Page 7
• Market Performance Analysis Page 8
• Forecast & Risk Analysis Page 9
Conclusion And Recommendations Page 10
References Page 11
Introduction
This report will deal exclusively with the assessment and evaluation of JB Hi-Fi (JBH) as an investment. It is part of a group of reports compiled to evaluate a list of possible investment opportunities in the discretionary consumer retail industry. The other companies that are evaluated in this group include: David Jones, Harvey Norman, The Reject Shop and Clive Peters. Each of these companies are listed on the ASX and retails to its own distinctive target market. The decision to invest in one of these companies does not exclude the decision to also invest in one or more of the other companies.
The report seeks to evaluate and analyze each of these companies from a financial, risk and investment point of view. The analysis will seek to determine which companies are acceptable as an investment in terms of its:
1. Finances (Sound profitability, efficiency, liquidity, and capital structure),
2. Value
The purpose of this report is to evaluate the findings of an analysis conducted on JB Hi-Fi (JBH). This evaluation will be assessed to present a recommendation to acquire shares to add to an investment portfolio. This report will assess JBH relative to profitability, asset efficiency, liquidity, capital structure and market performance, before conducting a forecast and risk analysis. Annual reports from the past three years and analysts published views were used as the basis for the final recommendation. These evaluations will show JB Hi-Fi to be a strong investment opportunity.
Table of Contents
Introduction Page 1
JB Hi-Fi Company Profile Page 2
Financial Analysis Page 3
• Profitability Analysis Page 3
• Asset Efficiency Analysis Page 5
• Liquidity Analysis Page 6
• Capital Structure Analysis Page 7
• Market Performance Analysis Page 8
• Forecast & Risk Analysis Page 9
Conclusion And Recommendations Page 10
References Page 11
Introduction
This report will deal exclusively with the assessment and evaluation of JB Hi-Fi (JBH) as an investment. It is part of a group of reports compiled to evaluate a list of possible investment opportunities in the discretionary consumer retail industry. The other companies that are evaluated in this group include: David Jones, Harvey Norman, The Reject Shop and Clive Peters. Each of these companies are listed on the ASX and retails to its own distinctive target market. The decision to invest in one of these companies does not exclude the decision to also invest in one or more of the other companies.
The report seeks to evaluate and analyze each of these companies from a financial, risk and investment point of view. The analysis will seek to determine which companies are acceptable as an investment in terms of its:
1. Finances (Sound profitability, efficiency, liquidity, and capital structure),
2. Value
References: (2008) JBH Annual Report (2009) JBH Annual Report (Austock Equities Research – December Quarter 2009) Stocks to watch, May 10, 2010, http://www.watoday.com.au/business/markets/stocks-to-watch-20100510-um2x.html Symons, D. (April 13, 2010) Fading fiscal stimulus could put JB out of tune. http://www.watoday.com.au/business/fading-fiscal-stimulus-could-put-jb-out-of-tune-20100412-s43g.html Thomson, J (09 February 2010) The 10 strategy secrets of JB Hi-Fi, http://www.smartcompany.com.au/retail/20100209-the-10-strategy-secrets-of-jb-hi-fi-chief-richard-uechtritz-here-s-what-you-can-learn.html Bibliography Gitman, Juchau & Flanagan, Principles of Managerial Finance,5th edition, 2008, Australia Birt, Chalmers, Beal, Brooks, Byrne & Oliver, Accounting Business Reporting for Decision Making 2nd edition, 2008, Australia.