Finance Report on JB Hi Fi Limited

HI5002: Finance for Business
Dream Big Advisers LLP – Report on JB Hi Fi Limited
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Table of Contents
Introduction................................................................................................................................3
Discussion..............................................................................................................................4
Brief Description of the company.......................................................................................4
Ownership-Governance Structure.....................................................................................5
Key Ratios.............................................................................................................................7
Market Price of share and other relevant data.................................................................8
Research about news and other significant announcements by the company..............10
Beta and required rate of return on investment.............................................................11
Weighted average cost of capital......................................................................................12
Debt Ratio and other relevant aspects.............................................................................13
Dividend Policy of JB Hi-Fi Limited................................................................................14
Recommendation for the client.........................................................................................15
Conclusion...............................................................................................................................16
References...............................................................................................................................17
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Introduction
The report aims at providing an insight into the financial performance and position of
the company under review. The report will be based on the facts and findings generated
after a careful analysis of the annual report of the company and the ongoing
environment around the industry. This will help to gather understanding about the
company and to report on the financial as well as non-financial aspects of the business.
It is crucial to enhance the knowledge about an investment wherein we are planning to
invest some funds in the shares of the company. The company is operating in the
Australian Market, and has branches in the New Zealand location as well. The
environmental factors affecting the company shall be taken into consideration while
reading the report. The report concludes about the decision in respect of the purchase of
investment after taking into consideration the relevant factors analysed by us.
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Discussion
Brief Description of the company
JB Hi Fi limited is a retailer in the Australian and New Zealand markets. It caters to the
consumer electronics industry. The company has established 300+ stores till the end of
the current financial year. The company has been successful in maintaining growth and
profitability through the use of cost reduction techniques. The major competitors of JB
Hifi are Target Australia and Myer. Jb Hi-Fi was established in 1974 and then grew up
to become one of the leading retailers of Australia due to its low costs. It was
subsequently listed on the Australian stock exchange in 2003 after being injected by
private equity in 2000. The company has diversified its portfolio of products from
selling music CD’s to providing a broad range of consumer electronics. The company
has also been active in activities which would boost the profitability. This involves
acquiring few companies which would be helpful in increasing the sales of the company
and an enhanced presence in the market.
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