Dixone Carphone - Case Study
18 Pages3765 Words81 Views
Added on 2020-01-23
Dixone Carphone - Case Study
Added on 2020-01-23
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International Finance
Table of ContentsINTRODUCTION................................................................................................................................1RATIO ANALYSIS..............................................................................................................................1Analysis of profitability....................................................................................................................1Analysis of liquidity.........................................................................................................................3Analysis of solvency.........................................................................................................................5Analysis of efficiency.......................................................................................................................7Analysis of investment performance................................................................................................8CAPITAL STRUCTURE THEORY....................................................................................................9DIVIDEND THEORY........................................................................................................................10NON-DOMESTIC FINANCE PRODUCT........................................................................................11CONCLUSION...................................................................................................................................11REFERENCES...................................................................................................................................12APPENDIX........................................................................................................................................14Dixone Carphone’s ratio analysis...................................................................................................14Metro AG ratio analysis..................................................................................................................15
Index of FiguresFigure 1 Profitability ratios of Dixone Carphone Plc...........................................................................1Figure 2 Gross profit ratios of Dixone Carphone and Metro AG.........................................................2Figure 3 Net profit ratios of Dixone Carphone and Metro AG............................................................3Figure 4 Liquidity ratio of Dixone Carphone Plc.................................................................................4Figure 5 Current ratio of Dixone Carphone Plc and Metro AG...........................................................4Figure 6 Quick Ratio of Dixone Carphone Plc and Metro AG............................................................5Figure 7 Debt to equity ratio of Dixone Carphone Plc.........................................................................6Figure 8 Debt to equity ratio of Dixone Carphone Plc and Metro AG................................................6Figure 9 Efficiency ratio of Dixone Carphone Plc...............................................................................7Figure 10 Earnings per share of Dixone Carphone Plc and Metro AG................................................8
INTRODUCTIONIn the present times, companies carry out their operations and formal course of activities atan international market which raise the competition level among the organization. In order tosustain in the competitive market, establishments are required to analyse their operationalperformance and financial status so as to assess that whether they are performing well or not. Thepresent assignment here emphasises upon financial performance evaluation of an internationalelectrical and telecommunication company, Dixons Carphone Plc. It was established by the mergerof Dixons Retail and Carphone Warehouse on 7th August 2014. The report will analyse theperformance of the firm by incorporating ratio analysis tool for the two recent financial years, 2015and 2016. Along with this, capital structure theory and dividend theories will be discussed. RATIO ANALYSISThis technique of strategic financial analysis lay emphasises upon computing a differentkind of ratios like profitability, creditworthiness, solvency, efficiency and so on to make an in-depthevaluation of business performance. Analysis of profitabilityFigure 1 Profitability ratios of Dixone Carphone PlcGross profit margin (GPM) quantifies profit percentage generated by adding up a mark-upon total product cost. However, net profit margin shows percentage of net return obtained aftermeeting all the direct plus indirect payments (Kogadeeva and Zamboni, 2016). In the year 2016,Dixon Carphones’s GPM reported negative movement as it dropped down from 25.89% to 22.44%.In 2016, company maximized its revenue by 17.96% by delivering superior quality products at fair1
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