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Financial Analysis of Myer Holdings Limited

   

Added on  2020-05-16

18 Pages2530 Words241 Views
RUNNING HEAD: Financial analysis of Myer Holdings Limited 1Name of the studentTopic- Financial analysis of Myer Holdings LimitedUniversity name

Financial analysis of Myer Holdings Limited2Introduction This report consists of the financial analysis of Myer Holdings Limited whichevaluates how well company has performed throughout the time. Ratio analysis, share pricemovement analysis and other financial analysis tool have been used to determine the trueperformance of Myer Holdings Limited. 1.Present description of the companyMyer Holdings Limited is an Australian Departmental stores chain trading in all Australianstates. The stock price of company is traded at MYR(ASX)A$0.640.00 (-0.78%). The CEOof company is Richard who takes all the strategic decisions for the company. 2.Ownership and governance structureThe CEO of company is Richard who takes all the strategic decisions for the companyThe Gary Barber is the key persons who work as manager of company (Mayer HoldingsCompany, 2015).Owner of companyHighland Capital management- owned 25% shares Anchorage Capital Group –(owned 25% shares)Solus Alternative Asset Management- owned (25%)Other shareholders- Owned- 25% ( Mayer Holdings Company, 2017)

Financial analysis of Myer Holdings Limited33.Performance ratio analysis of Myer Holding LimitedThis ratio analysis is used to analysis the relation between two financial data of company(Mayer Holdings Company, 2015).Calculation of ROA and ROEMyer Holding LimitedParticulars (Amount in Million 2014201520162017AUD$AUD$ AUD$ EBIT142587423Net profit98306112Total Assets1,9331,8871,8681,879.00Total Liabilities1,0391,024760806Shareholders' Equity893 863 1,1081,073.00Computation of Return on assets 1.Rate of Return on Assets2014201520162017A. Net income98306112B. Total assets1,9331,8871,8681,879 (A/B)5.07%2%3%1%Interpretation It is considered that return on total assets of company is decreasing throughout the time. It isnot good indicator for the company. Company has decreased its return on assets from 5.07%to 1% since last four years.

Financial analysis of Myer Holdings Limited4Computation of Return on equity 2.Rate of Return on Equity2014201520162017A. Net income available to equity shareholders.98306112B. Shareholder’s Equity89317,981 1,1081,073.00(A/B)10.97%0.17%5.51%1.12%InterpretationIt is analysed that return of equity of company has went down by 90% which is not good forthe business of Mayer Holding. The rate of return on equity of company has went down to1.12 % in 2017 as compared to 10.97% return shown in 2014 (Brigham and Ehrhardt, 2013).Computation of Debt to equity3. Debt Ratio2014201520162017A.Total Liabilities1,0391,024760806B. Total assets1,9331,8871,8681,879.00(A/B)54%54%41%43%InterpretationCompany has decreased its debt to equity ratio to 43% in 2017 which is 10% lower than thedebt ratio shown in 2014. Mayer Holding Company has decreased its debt ratio with a viewto reduce its financial leverage. However, it will eventually increase the overall cost of capitalof company.

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