ANALYSIS ACCOUNTING 2

OUTLINE
1. INTRODUCTION (FEMI)
2. BACKGROUNDS OF TWO COMPANIES (FEMI)
2.1 HUGO BOSS
2.2 LAURA ASHLEY
3. PERFORMANCE ANALYSIS
3.1 VERTICAL AND HORIZONAL ANALYSIS (BOYE)
3.1.1 HUGO BOSS
3.1.2 LAURA ASHLEY
3.2 RATIOS ANALYSIS (HANH & ANDREA)
3.2.1 PROFITABILITY (HANH)
3.2.2 LIQUIDITY (HANH)
3.2.3 EFFICIENCY (ANDREA)
3.2.4 CAPITAL STRUCTURE (ANDREA)
3.2.5 INVESTOR (ANDREA)
4. RECOMMENDATION (BOYE) --CHOOSING HUGO BOSS
5. LIMITATION OF THE ANALYSIS (BOYE)
-- RELIES ON SLIDES 54 PAGE 54
6. CONCLUSION (FEMI)
7. APPENDIX (HANH & ANDREA)

3.2.1 Profitability Ratio:

RATIO
HUGO BOSS
LAURA ASHLEY

2013
2012
2014
2013
Return on Capital Employed
45.33%

45.33%

3 32.59%

3 27.22%
Gross Profit Margin
64.95%

61.56%

42.51%
42.17%

Operating Profit Margin
18.76%

18.42%

6.5%
6.5%

­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­Return on capital employed (%) = The Return on Capital Employed (ROCE) measures the profitability of a company by representing the profit from operating as percentage of its capital employed (Bhat 2008). Additionally, ROCE indicates how efficiently an organization utilizes long-term capital at it disposal. It shows that for every 100 pounds of long-term fund invested in 2014, Laura Ashley made 32.59 pounds of net profit. Comparing to 2013, ROCE increase 5.37%, which means that the efficiency of using long-tern capital augments. On contrary, in 2013, for every 100 pounds of long-tern fund invested, Hugo Boss made 45.33 pounds of net profit which lower than 9.85 pounds that of 2012. Therefore, the efficiency of using long-tern fund went down. The reason for this possibly comes from the speech of increasing ROCE is more rapid than the growth of operating profit and the company may borrow more long-term debt in 2013 than 2012.
Generally, ROCE in Hugo Boss is higher than Laura Ashley, which convinces that the efficiency of Hugo Boss is better than.
Gross Profit Margin (%)=
The Gross Margin ratio is a ratio of gross