Financial Report: JB Hi-Fi's Revenue, Assets, and Share Analysis

This report provides a comprehensive financial analysis of JB Hi-Fi, examining various aspects of its financial performance. The report begins with an overview of the types of revenues generated by the consolidated group, including revenue from external customers, commissions, rendering of services, and interest. It then delves into the classification of assets, distinguishing between digital assets, fixed assets, intangible assets, and current assets. The analysis further explores share issues, contributed equity, reserves, and retained earnings. The report also addresses current liabilities concerning dividends, detailing the calculation of dividend per share and the total dividend payout. Finally, the report compares dividend per share and earnings per share, providing insights into the company's payout ratio and financial stability. The analysis is based on the provided financial statements and aims to identify key financial aspects and their implications for the company's performance.

Financial analysis

Table of Contents
INTRODUCTION...........................................................................................................................1
1. Types of revenues generated by the consolidated group........................................................1
2 Classification of assets.............................................................................................................2
3 Shares and issue......................................................................................................................2
4. Current liability in respect of dividends..................................................................................3
5. Comparison of dividend per share and earning per share.......................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
In all the businesses there are various financial aspects which are to be taken into
consideration. This is required as by that only important decisions will be made. For this purpose
it is needed that financial analysis shall be carried out in which all the important factors that are
involved will have to be evaluated (Laudon and Traver, 2013). The most important matters
which will be examined are assets, equity, payment of dividend and earnings which are made by
business. In the given report all of them will be discussed in context of JB Hi FI limited. The
information will be provided on basis of groups statements which have been provided. By the
help of them all the problems will be identified and it will be possible to take the best steps to
overcome them.
1. Types of revenues generated by the consolidated group
Revenue is the financial gain which an enterprise receives in return of the efforts taken by
it. It is the core objectives for which any organisation operates. Higher the amount of income
shows that company is doing well and its resources are well allocated (Dewachter, and et. al.,
2015). Referred group receives its revenues from different sections among which external
customers and interest has the major share.
 Revenue from external customer – It consist of sales which is successfully done by the
given group. Once the product or service is sold revenue is earned and the ownership of
the item get transferred to the other person. Management needs to take efforts so as to
earn higher income which go together with the increase in sales.
 Commission – Apart from sales the given entity also earns revenue from commission. It
is the act in which the refereed group act as an agent instead of being the principle entity.
If it successfully accomplish the transaction an amount is received by both the other
parties which is refereed as a commission.
 Rendering of services – While performing the business the group also become a part of
different contract in which the entity needs to give different services. In return of same
the company gets revenue which depends upon the rate at which contract is formed with
mutual concern of all the parties involved.
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 Interest – It is another source through which the given organisation is earning its
revenues. By making investments interest is received which has major share in the
concerns total revenues (Doucette, and et. al., 2012.).
2 Classification of assets
Assets are the most crucial part of any organisation. They give long and short term
benefits to the company which help entrepreneur in achieving their goals. The assets of the given
organisation are classified into different categories by keeping current and non current
possession as a base. Some of the broad classifications under which the concerns asstes are
classified is given below:
 Digital assets – It is a part of online assets of the company (Lam, 2010). The refereed
organisation experienced a growth in its digital assets when its total sales raised to
$158.9. it shows that the companies digital aspect is very strong.
 Fixed Assets – it is another variety of asset that includes those parts which give company
long term advantages. These assets can not be converted into cash at the same moment
for instance building, deferred tax, land etc.
 Intangible Assets – it is the asset which can not be seen or touched by the individual.
Referred concern has high goodwill which makes it their best asset of this variety. Higher
the goodwill less amount of assets needs to be taken by the enterprise as company having
high goodwill needs to invest less in the marketing.
 Current assets – These are the most important asset of the company. It gives advantage
to an enterprise as it possess the capacity of being converted into cash at any point of
time like cash in hand and inventories (El Kasmioui and Ceulemans, 2012).
3 Shares and issue
The different major groups under which companies equity is classified into is the
contributed equity also known as paid up capital is the amount invested by the companies share
holders. The amount of this shows the total stock purchased by the various share holders. Higher
the paid up capital greater is the share a person has in a particular entity. Than comes the
reserves which are kept in order to full fill a particular purpose like paying of bonus, pay off debt
etc. as the given organisation has good reserves it shows that it is capable of meeting the future
risk or any other sudden situation (Kallala, and et. al., 2015). Last are the retained earning which
consist of that amount which is not given as dividend in order to use same in future for some
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other purpose. It improves the financial stability of the business as the retain amount can be
further utilised in order to meet the uncertainness also. From the financial statement of the given
organisation it can be evaluated that share are issued in the past financial year as the closing
balance for the year ending 2017 is given as 114,421,403.
4. Current liability in respect of dividends
In the business there are earnings which are made and out of them some of the portion is
paid to all the shareholders as they are also part of organisation. So the portion that is paid to
them out of income is known as dividend (Sheikhi, Ranjbar and Oraee, 2012). The amount which
shall be payable in coming 12 months will be classified as current liability. All the shareholders
will be receiving this amount in proportion to the number of shares which are help by them. For
this purpose it will be needed that the amount to be paid in respect of each shall shall be
determined then only total receipt can be calculated.
In case of JB Hi Fi limited the amount of dividend which has been recognised and will be
treated as current liability for the group is determined to be $119.1 million. Company will be
needed to pay this amount to all the shareholder's within a time span of one year.
If there are hundred shares which are held then the amount of dividend which is paid on
each share will be identified. It has been provided that dividend per share is 118 cents. So the
total amount that will be received in respect of 100 shares will be as follows:
100* 118= 11800 cents
this will be converted into dollars and will amount to $118. this is because in one dollar there are
100 cents so the total cents will be divided by 100 to arrive at dollar receivable.
5. Comparison of dividend per share and earning per share.
The earnings which are made by company are determined in total. After that they are
required to be divided by the total number of shares which are held by shareholders. The amount
which will be received by this is known as earning per share (Słyś and Kordana, 2014). Out of
this a certain portion will have to be paid to the person who is holding shares which means
shareholders.
The amount which will be paid to them is known as dividend and when that is calculated
on per share basis then it is dividend per share.
The total earning per share is classified in two parts which are payout ratio and retention
ratio. The part which will be distributed is known as payout and other which is kept by company
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for further use is retention. Here the EPS is 154.3 cents and out of this payment is made of 118
cents. It shows that 76.47 percent is paid by company which is a very high ratio. It shows that
company is paying adequate amount to its shareholder's and also keeping the balance for the
reinvestment purpose (Vogel, 2014). If company wants then this amount can be reduced and by
that way the investments will be increased that will bring the company additional earnings.
CONCLUSION
From the above report it can be concluded that company has made various classifications
in respect of its assets which are as per the standards set. The revenue is earned by company
from various sources which have been described above. Also the information in respect of shares
which are issued and their closing balance is provided. The amount which will be paid in respect
of dividends in the coming year is also mentioned. The relation between earning per share and
dividend per share has been identified and it has been noted that company is paying high amount
to its shareholders.
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REFERENCES
Books and Journals
Dewachter, H. and et. al., 2015. A macro-financial analysis of the euro area sovereign bond
market. Journal of Banking & Finance. 50. pp.308-325.
Doucette, W.R. And et. al., 2012. Three-year financial analysis of pharmacy services at an
independent community pharmacy. Journal of the American Pharmacists Association.
52(2). pp.181-187.
El Kasmioui, O. and Ceulemans, R., 2012. Financial analysis of the cultivation of poplar and
willow for bioenergy. Biomass and bioenergy. 43. pp.52-64.
Kallala, R.F. And et. al., 2015. Financial analysis of revision knee surgery based on NHS tariffs
and hospital costs. Bone Joint J. 97(2). pp.197-201.
Lam, J.S.L., 2010. An integrated approach for port selection, ship scheduling and financial
analysis. Netnomics. 11(1). pp.33-46.
Laudon, K.C. and Traver, C.G., 2013. E-commerce. Pearson.
Sheikhi, A., Ranjbar, A.M. and Oraee, H., 2012. Financial analysis and optimal size and
operation for a multicarrier energy system. Energy and buildings. 48. pp.71-78.
Słyś, D. and Kordana, S., 2014. Financial analysis of the implementation of a Drain Water Heat
Recovery unit in residential housing. Energy and Buildings. 71. pp.1-11.
Vogel, H.L., 2014. Entertainment industry economics: A guide for financial analysis. Cambridge
University Press.
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