Sports Direct Financial Analysis

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BUSINESS ACCOUNTING

AC1010

SPORTS DIRECT INTERNATIONAL PLC.

Table of Contents

1.0 Overview………………………………………………………………………………….3

2.0 Company Background………………………………………………………..………….3

3.0 Performance during the last 5 years…………………………………………………….3

4.0 Ratios Analysis……………………………………………………………………………4 * 4.1 Earning per Share Ratio…………………………………………………..4

* 4.2 Quick Ratio……………………………………………………………….5

* 4.3 Current Ratio……………………………………………………………..6

* 4.4 ROCE Ratio………………………………………………………..……..6

5.0 Company Funding and Gearing…………………………………………………………7

6.0 Qualitative Issues………………………………………………………..………………..8

7.0 Conclusion…………………………………………………………...…..………………..8

8.0 References………………………………………………………………..………………..8

9.0 Appendices………………………………………………………………………………..9 * 9.1 Appendix 1 Balance Sheet……………………………………………….9

* 9.2 Appendix 2 Income Statement…..……………………………………...11

* 9.3 Appendix 3 Key Ratios……………………………………….………...13

1.0 Overview
This paper will examine Sports Direct International Company and will provide an analysis of their performance during last 5 years. Also, the paper will include a financial analysis, 4 ratios, how the company is funding, qualitative issues and their attitude towards the environment.

2.0 Company Background
Sports Direct International Plc. was established in 1982 and first shop was opened in Maidenhead, formerly named as Mike Ashley Sports. It is a holding company that employs 16.00 employees in UK and more than 2000 in abroad. Total revenue of the company is 1.67bn. Sports Direct International is a leading sports retailer in the UK. Additionally, they are trying to operate internationally (mainly in Europe). The company has now 393 stores in the UK (except Northern Ireland) and operates under the Sportsdirect.com, Field&Trek and Lillywhites. This retailing company is dealing with sports and leisure equipment. During their existence the company acquired several brands and purchased Everlast Worldwide Inc. In 2011 the company merged with West Coast capital. Sports Direct International is selling different kinds of sports wear, footwear, underwear and sports accessories in the area of skiing, swimming, boxing, running, racquets games, football, golf and trekking. The company does not offer only its owned brands such as Dunlop, Karrimor, Slazenger, Everlast or Lonsdale, but also third party brands such as Nike, Adidas, Puma and Reebok. In the UK there are 19 Field&Trek stores, which are selling outdoor equipment for trekking, camping, hiking or climbing such as waterproof clothes and footwear with brands like Berghaus, Merrell or Salomon. The headquarters of Sports Direct International are now located in Mansfield, the United Kingdom. (Markets.ft, 2012)

3.0 Performance during the last 5 years
A graph above represents a share price of Sports Direct international over the last 5 years. From the graph it can be clearly seen that from 2007 to 2009 there was a big decrease in the share price and on the other side from 2009 share price of the company slightly increased and this trend continued to 2011, when there was recorded high increase in share price. In the second half of 2011 there was a considerable decline from over 250 to 200. In 2008 there was a fall in UK Retail revenues and this was a reason why Group revenue also declined by £9bn. Furthermore, a net debt in the year 2008 increased 12 times more than in 2007, which caused that share price, fell down in 2008. Year 2009 was significant for the company and their revenue increased, even when there were bad economic conditions such as for example economic crisis. In 2009 UK Retail sales increased by 9.2%, which was caused by the removal of subsidiaries. A group revenue in this year increased. During 2010 a group revenue increased by 6.2% due to the strong performance and new stores, which were opened in 2010. Another reason for higher revenue was that the company reduced net-debt (almost by...
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