Analysis Hallenstein Glasson Holdings Limited 
Introduction
Hallenstein Glasson Holdings Limited (HLG) is the one of the leading apparel retailers in New Zealand, listed on the New Zealand Stock Exchange. The company provides good quality products and has been a successful as well as an innovative business. This report makes an analysis of the financial information in the 2013 annual report for HLG. It looks at the quality of earnings through performance and solvency measurements. The strengths and weaknesses of the company are then summarized and the share price is estimated. This report also evaluates HLG to make a recommendation on share purchasing. Following this recommendation is shown for potential investment.
Analysis of the Financial Information
Evaluating company’s financial report, the auditors’ opinion is very significant. The auditors of the 2013 Annual Report gave HLG reliable opinion, which means the data presented is true and fair, complies with New Zealand GAAP and international financial reporting standards.
The “eight bangs” below shows the profitability, the financial structure, the quality of the profit and whether there is an excessive holding of current asset to evaluate the company (Trow, 2013, p.25).
1. Ratios for profitability and efficiency
The profitability ratio significantly shows whether the shareholders would receive an appropriate return. An accounting rule of thumb is the profitability ratio should be a minimum of 15% to compensate shareholders against possible future downturns (Trow, 2013, p.13). The profitability ratio of HLG is 27.89% in 2013 (NIAT / Equity = 18,669,000 / 66,935,000). This shows HLG performed well in 2013. Compare to 2012, the profitability ratio decreased significantly about 3.69%, because the net income after tax (NIAT) dropped about 2.3 million. The one reason of decreasing NIAT is that the insurance gains relating to Christchurch earthquake is zero. Another reason is the expenses. The reduction of the profitability ratio could decrease shareholders
Hallenstein Glasson Holdings Limited (HLG) is the one of the leading apparel retailers in New Zealand, listed on the New Zealand Stock Exchange. The company provides good quality products and has been a successful as well as an innovative business. This report makes an analysis of the financial information in the 2013 annual report for HLG. It looks at the quality of earnings through performance and solvency measurements. The strengths and weaknesses of the company are then summarized and the share price is estimated. This report also evaluates HLG to make a recommendation on share purchasing. Following this recommendation is shown for potential investment.
Analysis of the Financial Information
Evaluating company’s financial report, the auditors’ opinion is very significant. The auditors of the 2013 Annual Report gave HLG reliable opinion, which means the data presented is true and fair, complies with New Zealand GAAP and international financial reporting standards.
The “eight bangs” below shows the profitability, the financial structure, the quality of the profit and whether there is an excessive holding of current asset to evaluate the company (Trow, 2013, p.25).
1. Ratios for profitability and efficiency
The profitability ratio significantly shows whether the shareholders would receive an appropriate return. An accounting rule of thumb is the profitability ratio should be a minimum of 15% to compensate shareholders against possible future downturns (Trow, 2013, p.13). The profitability ratio of HLG is 27.89% in 2013 (NIAT / Equity = 18,669,000 / 66,935,000). This shows HLG performed well in 2013. Compare to 2012, the profitability ratio decreased significantly about 3.69%, because the net income after tax (NIAT) dropped about 2.3 million. The one reason of decreasing NIAT is that the insurance gains relating to Christchurch earthquake is zero. Another reason is the expenses. The reduction of the profitability ratio could decrease shareholders