Financial Review of Billabong Pty Ltd
Billabong Financial Review
Review of Billabong Financial information for 2005-2008
Note: tables are shown in $’000s (excluding $ values expressed with decimal places)
Note: revenue is expressed and revenue from the sale of goods.
Question 1 – Revenue and Revenue Margin
2005 2006 2007 2008
Total Revenue $ (From the sale of goods) $840,701 $1,018,227 $1,222,911 $1,347,618
% Change from previous year 24.60% 21.12% 20.10% 10.20%
% Change from base year (2004) 24.60% 50.91% 81.24% 99.73%
Change in $ $165,972 $177,526 $204,684 $124,707
It is important to note the $ value increases as it is not the biggest % increase. Showing strong growth until 2007, the 2008 smaller growth can be attributed to the GFC or that business expansion has slowed. This can be noticed in the Financial reports list of businesses owned by billabong increasing, from; “Billabong”, “Von Zipper”, “Element” and “Honolua Surf Co” in 2004 to the addition of; “Kustom”, “Palmers”, “Nixon”, “XCEL”, “Tigerlily”, “Sector 9” and Dakine up to 2008, this gives Billabong International a larger stake at market share, with their brands dominating surf shop shelves.
Also with the addition of Billabong owned store fronts becoming more and more common, apposed to being a wholesale provider, the businesses expansion into new countries around the world and the growth of the brand within these countries has allowed Billabong to add to their ever-expanding global brand and an increasing revenue of 1422% over the past ten years, with now average growth of around 19% pa, a growth at perhaps a more manageable level, this shows a steep growth period that is and has for a few years been slowing down suggesting it may have reached its maximum profit potential. With all this in mind, we can see a company with a strong growth period that is now consolidating its position as one of the leading brands in this industry.
Question 2 – Gross Profit margin & Net Profit Margin
GPM = GP (Revenue from sale of
Review of Billabong Financial information for 2005-2008
Note: tables are shown in $’000s (excluding $ values expressed with decimal places)
Note: revenue is expressed and revenue from the sale of goods.
Question 1 – Revenue and Revenue Margin
2005 2006 2007 2008
Total Revenue $ (From the sale of goods) $840,701 $1,018,227 $1,222,911 $1,347,618
% Change from previous year 24.60% 21.12% 20.10% 10.20%
% Change from base year (2004) 24.60% 50.91% 81.24% 99.73%
Change in $ $165,972 $177,526 $204,684 $124,707
It is important to note the $ value increases as it is not the biggest % increase. Showing strong growth until 2007, the 2008 smaller growth can be attributed to the GFC or that business expansion has slowed. This can be noticed in the Financial reports list of businesses owned by billabong increasing, from; “Billabong”, “Von Zipper”, “Element” and “Honolua Surf Co” in 2004 to the addition of; “Kustom”, “Palmers”, “Nixon”, “XCEL”, “Tigerlily”, “Sector 9” and Dakine up to 2008, this gives Billabong International a larger stake at market share, with their brands dominating surf shop shelves.
Also with the addition of Billabong owned store fronts becoming more and more common, apposed to being a wholesale provider, the businesses expansion into new countries around the world and the growth of the brand within these countries has allowed Billabong to add to their ever-expanding global brand and an increasing revenue of 1422% over the past ten years, with now average growth of around 19% pa, a growth at perhaps a more manageable level, this shows a steep growth period that is and has for a few years been slowing down suggesting it may have reached its maximum profit potential. With all this in mind, we can see a company with a strong growth period that is now consolidating its position as one of the leading brands in this industry.
Question 2 – Gross Profit margin & Net Profit Margin
GPM = GP (Revenue from sale of
References: Atrill, McLaney, Harvey & Jenner (2009) – “Accounting – An introduction”- 4th edition Pearson Education, Australia Yahoo.com.au (viewed 04/09/09) Billabong financial chart over 5 years - http://au.finance.yahoo.com/q/bc?s=BBG.AX&t=5y&l=on&z=m&q=l&c= Note: Figures and information have primarily been sourced from Billabongbiz.com and the financial statements within the website.