Introduction: The following report is the study conducted to analyse the financial performance conducted for Zara UK (Fame, 2008). Turnover: Considering the trends in Turnover
It can be seen that there has been a major rise in turnover since 2002. One of the points that can be noted that there has been a major increase in the turnover since 2006. This is mainly due to increase in sales. The prospect for 2008 appears good and there is a potential for increasing turnover. However, the organisation needs to be cautious as there is a slow down expected which is expected to last next couple of years.
Profit before Tax: Considering the trends in studying the profit’s before tax
Since 2000 there has been a drop in profits due to slowdown in markets before significantly rising in 2003. However, in 2004 the organisation suffered losses before breaking even in 2005. However, in 2006 the organisation suffered a major loss before recovering and making a small profit in 2007.
Return on Shareholder’s funds: Considering the return on shareholders funds
From the plot it can be seen that the returns on shareholders funds have deteriorated badly since 2000. However since 2006 there has been a slow but steady increase in the confidence of investors and shareholders. Also the organisation has started increasing its profits and also bringing back investors confidence.
Profitability ratios: The following are the profitability ratios for Zara
Profit Margin: It is the ratio between Earnings before interest/ sales
The profit margin fell to its lowest in 2005 before rising to make some profits in 2008. This year the organisation was successful in making a small profit margin
Return on Total assets: Return on total assets presents tells how well management is performing on all the firm's resources. The following is the trends seen since the last few years
In the past few years the organisation has not been...
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