Acca Project

Topics: Financial ratio, Luxury good, LVMH Pages: 34 (9411 words) Published: April 6, 2013
The Business and Financial Performance of Hermes over a Three-year Period. (2008-2010) Research Project for (Oxford Brooks University BSC Degree)

Name:
ACCA Registration:
Word Count: 6470
Date: 22/05/2012
Period:24

:
RAP

TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION…………………………………………….……..4 * 1.1 The Reason for Choose Project Topic and Organization……………….…..4

* 1.2 Objectives of Report and Research Questions…………….……………...…5

* 1.3 The Overall Approach of This RAP…………………………………..……..…6

* 1.4 The Explanation of Analysis Models…………………………………………..7

CHAPTER 2: INFORMATION GATHERING & ACCOUNTING/BUSINESS RESEARCH TECHNIQUES……………………………………………………………………….10 * 2.1 Information Gathering…………………………………………………….......10

* 2.2 Limitation of Information Gathering. ………………………………..............11

* 2.3 Limitations of Techniques applied& Ethical issues ………………………...11

CHAPTER 3: RESULTS, ANALYSIS, and CONCLUSION & RECOMMENDATIONS …………………………………………………………………………………………13 * 3.1 Company Strategy of Hermes & LVMH…………………….…………...........14

* 3.2 Financial Ratios Analysis…………………………………………………….…15

* 3.3 Business Analysis……………………………………………………………….27

* 3.4 Conclusion of Hermes Business and Financial Performance over the three- year period..………………………………………………………….35

* 3.5 Recommendation…………………………………………………………….….35

* 3.6 Limitations…………………………………………………………………….….36

REFERENCES………………………………………………………………………..37

BIBLIOGRAPH ………………………………………………………………………43

APPENDICES…………………………………………………………………………44

CHAPTER 1 INTRODUTION
1.1The Reasons for Choosing Project Topic and Organization

Why Choose this Topic
The topic 8, Business and financial performance of selected company over the three -year period, directly related to ACCA study, especially F5 (Performance Management), F7 (Financial Reporting), F9 (Financial Management) and P3 (Business Analysis). Meanwhile, I have strong interest in the field of Business and Finance, along with knowledge and skills that I have gained from ACCA study, that enable me to carry out this research. Also, financial performance is crucial for any company .As a future accountant; the ability to assess a company’s business & financial performance is very basic requirement. Carrying out this research will make me logically go through all the financial ratios, developing more analytical skills, as well as improving working skills in supporting application, such as Microsoft Word and Microsoft Excel, preparing myself for the future employment. Why Hermes

First of all, I am a fan of Hermes. This is the brand always make people look posh, classic and elegant. Great numbers of superstars, e.g. Victoria Beckham, Madonna, always hold Hermes bags appear under the camera of the paparazzi.

Secondly, the company I select should easy for me to obtain related financial and business information. Accordingly, I have extensively searched for a company and found that Hermes does have plenty of published information related to last ten years of the business that can be easily available by access to the Company’s official website. Meanwhile, there are great number of independent sources available on-line.

1.2 Objective of Report and Research Questions

Companies operating at both national and worldwide level have the objective to make advancements in their field and capture the increased customer base for the business in order to prosper. Accordingly, it is almost mandatory for them to have knowledge about their business and financial performance over years in order to compare different year’s performance within company and make comparison to their competitors outside of company. Therefore, the objective of this report is to assess Hermes’s financial performance, financial position, business performance,...

References: ACCA. (2010), P5 Advanced performance Management, BPP version, charts 14 Strategic performance issues in complex business structures. London: BPP Publication. PP. 436-441
OTHER DOCUMENT:
Class Editori, 2011. Overview of Global and China Luxury Markets. Milan :Class Editori [pdf] Available at: http://www.fashionsummit.it/en/2011-options-of-luxury-the-voice-of-china/docs [Accessed 16 April 12].
Michael , M., 2011. ACCA P3 Business Analysis Lecture Notes. London College Of Accountancy.PP.11, unpublished
WEBSITES:
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[Accessed 16 March 12]
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Financial Modeling Guide, 2012.Limitations of Financial Ratios in Financial Modeling. [Online] Available at: http://www.financialmodelingguide.com/financial-ratios/financial-ratio-limitations/ [Accessed 11 March 12].
Hermes, 2008. Hermes Annual Report. [Online] Available at: http://finance-en.hermes.com/content/download/125/2586/version/2/file/RA_GB_T1%26T2OK.pdf
[Accessed 11 March 12].
Hermes, 2010. Hermes Annual Report. [Online] Available at: http://finance-en.hermes.com/content/download/517/3635/version/1/file/RA-HERMES_2010_GB.pdf
[Accessed 11 March 12].
Helium, 2010 .The ten characteristic of good accounting information. [Online] Available at: http://www.helium.com/items/1646652-qualities-of-good-accounting-information [Accessed 13 March 12].
Investopedia, 2011. EBITDA Margin. [Online] Available at: http://www.investopedia.com/terms/e/ebitda-margin.asp#axzz1tb6IbTNA. [Accessed 10th March 2012]
Investopedia, 2012.Price -Earning Ratio
koellay.com. 2009. What Is SWOT Analysis? See The Sample Process. [Online] Available from: http://www.koellay.com/2009/05/what-is-swot-analysis-see-sample.html. [Accessed 7th March 2012].
Luxury Society, 2011.Luxury Brand Longevity is a Matter of Loyalty. [Online] Available at: http://luxurysociety.com/articles/2011/01/luxury-brand-longevity-is-a-matter-of-loyalty [Accessed 16 March 12]
LVMH, 2010.LVMH Annual Report
Tutor2u, 2012. Drawbacks & limitations of ratio analysis. [Online] Available at: http://tutor2u.net/business/accounts/ratio_limitations.html. [Accessed 10 March 2012].
The INDEPENDENT, 2007.Boom in fake goods hits luxury retailer’s profit. [Online] Available at: http://www.independent.co.uk/news/business/news/boom-in-fake-goods-hits-luxury-retailers-profits-765508.html[Accessed 16 March 12].
The Manager.org, 2011. Five Forces-Critique. [Online] Available at: http://faculty.msb.edu/homak/homahelpsite/webhelp/Five_Forces_-_Porter_-_Critique.htm
[Accessed 18 March 12]
WIKIPEDIA, 2011, luxury good. [Online] Available at: http://en.wikipedia.org/wiki/Luxury_good
[Accessed 15 March 2012]
World Luxury Association, 2012.World luxury association official release global luxury brand 100 strong. [Online] Available at: http://www.top100luxury.com/en/wla/news/2/2012/0207/485.html
[Accessed 16 March 2012]
WIKIPEDIA, 2012. Hermès . [Online] Available at: http://en.wikipedia.org/wiki/Hermès
[Accessed 16 March 12]
China Daily, 2012,Luxury sales aid world economy. China Daily, [Online] 17,January.
Available at: http://www.china.org.cn/business/2012-01/17/content_24425150.htm [Accessed 16 March 12]
Want ChinaTimes, 2011
Blog:
Megs Mahoney Dusil, 2009
ACCA, (2010), F7 Financial Reporting, KAPLAN version, Berkshire: KAPLAN Publishing Ltd.
ACCA, (2010), P2 Corporate Reporting BPP version, London: BPP Publication.
ACCA, (2010), P3 Business Analysis, KAPLAN version, Berkshire: KAPLAN Publishing Ltd.
ACCA. (2010), P5 Advanced performance Management, BPP version, London: BPP Publication.
Minnesota
Michael,M., 2011. ACCA P3 Business Analysis Bluff Notes. London College Of Accountancy ,unpublished .
Stewart D.W and Kamins M.A, (1993), Secondary research: information sources and methods. London: Sage Publications.
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