Ted Baker Ratio Analysis
Report: Financial Position and Performance of Ted Baker PLC – 2010 to 2013
The following document analyses the financial performance and position of Ted Baker Plc over the last four fiscal years (2010 to 2013) using ratio analysis.
The Appendix provided shows the balance sheet, income statement and calculated and graphical representation of the ratio analysis.
Overview of 2010-2013 Results:
Profitability: The company has shown good profitability over the years and has been a top performer in its peer group. 2012 saw a shift in revenue mix generated from wholesale vs retail (wholesale % increased) which along with expansion and promotional activities oversees, saw a small decline in overall profitability. This then improved in 2013.
Efficiency: Inventory Turnaround Period has steadily increased due to stocking of inventory to meet growth and demand oversees which resulted in increased capital expenditure. It is also well above the average inventory turnaround period of industry peers.
Trade payable pay-outs and trade receivable receipts have remained steady and asset turnover is steadily increasing.
Liquidity: Decreasing trend in liquidity ratios. The CURRENT ratio is still close to the industry peer average. However in 2012-13 high short term borrowing and increase in inventory to meet demand and growth has resulted in the ACID TEST ratio to fall below 1 which is well below the industry peers. There is also a negative cash flow in 2012-13. The company should look into financing some of its capital requirements from its reserves and start reducing the inventory stock.
Gearing: The GEAR and INTERST COVER ratios are good with respect to industry peers as well. Most of the company’s expansion activities are financed from short term borrowings rather than reserves or equity funding.
Investments: The company has paid out regular and steady dividends over the period. The DIVIDEND YIELD and DIVIDEND COVER ratios are good. Good performance, good EPS and a promising
The following document analyses the financial performance and position of Ted Baker Plc over the last four fiscal years (2010 to 2013) using ratio analysis.
The Appendix provided shows the balance sheet, income statement and calculated and graphical representation of the ratio analysis.
Overview of 2010-2013 Results:
Profitability: The company has shown good profitability over the years and has been a top performer in its peer group. 2012 saw a shift in revenue mix generated from wholesale vs retail (wholesale % increased) which along with expansion and promotional activities oversees, saw a small decline in overall profitability. This then improved in 2013.
Efficiency: Inventory Turnaround Period has steadily increased due to stocking of inventory to meet growth and demand oversees which resulted in increased capital expenditure. It is also well above the average inventory turnaround period of industry peers.
Trade payable pay-outs and trade receivable receipts have remained steady and asset turnover is steadily increasing.
Liquidity: Decreasing trend in liquidity ratios. The CURRENT ratio is still close to the industry peer average. However in 2012-13 high short term borrowing and increase in inventory to meet demand and growth has resulted in the ACID TEST ratio to fall below 1 which is well below the industry peers. There is also a negative cash flow in 2012-13. The company should look into financing some of its capital requirements from its reserves and start reducing the inventory stock.
Gearing: The GEAR and INTERST COVER ratios are good with respect to industry peers as well. Most of the company’s expansion activities are financed from short term borrowings rather than reserves or equity funding.
Investments: The company has paid out regular and steady dividends over the period. The DIVIDEND YIELD and DIVIDEND COVER ratios are good. Good performance, good EPS and a promising