Financial Analysis of Pandora A/S and Georg Jensen

The report provides a detailed analysis of Pandora A/S and Georg Jensen, including macroeconomic factors affecting the companies, industry analysis, competitive and corporate strategy, accounting analysis, financial analysis, and cross-sectional analysis. The findings reveal that Pandora A/S is in a better position in terms of current assets, current liabilities, and stockholders’ equity compared to Georg Jensen. However, the report identifies three potential red flag areas for Pandora A/S, including increasing cost of goods sold, uncertainties associated with new designs of jewellery, and problems with fluctuations in the supply chain market.

Running head: FINANCIAL ANALYSIS
Financial Analysis
Name of Student:
Name of University:
Author’s Note:

1FINANCIAL ANALYSIS
Executive Summary
The discourse of the report has stated about both financial and non-financial analysis of Pandora
A/S. Some of the main analysis includes macroeconomic factors affecting the company,
identification of the overall industry, competitive and corporate strategy, accounting analysis and
financial analysis. In addition to this, the study has also stated about cross-sectional analysis of
Pandora. The findings have revealed the company offers wide range of precious stones and high-
quality gold and silver jewellery and alternatives to such products is seen to be low in the market.
Moreover, Pandora A/S follows a competitive pricing strategy. The important nature of
competitive strengths of Pandora A/S are depicted in terms of designs and quality of jewellery as
agility of the value chain and an improved focus on the sustainability. The overall financial
comparison of both the companies has been able to state that Pandora A/S is significantly in a
better position in terms of current assets, current liabilities and stockholders’ equity compared to
its selected competitor Georg Jensen. However, the three potential red flag areas for the company
is identified with increasing nature of cost of goods sold, uncertainties associated with new
designs of jewellery and problems with fluctuations in the supply chain market. Based on the
cross-sectional findings it can be seen that fall in the ROE for both Pandora A/S and Georg
Jensen in the recent years may be a result of the macroeconomic changes which had significantly
affected the jewellery designers of Copenhagen.

2FINANCIAL ANALYSIS
Table of Contents
Introduction.....................................................................................................................................................................4
1. Business and Strategic Analysis.................................................................................................................................4
Analysis of the economy............................................................................................................................................4
Macroeconomic Factors affecting Pandora...........................................................................................................4
Industry analysis........................................................................................................................................................5
Identification of the Industry.................................................................................................................................5
Identification of the Competitor Company...........................................................................................................5
Porters Five Force Analysis with Assessment......................................................................................................5
Industry’s Growth Potential..................................................................................................................................6
Company’s competitive and corporate strategy.........................................................................................................7
Company’s competitive strategy, risk factors and growth potential.....................................................................7
Company’s corporate strategy...............................................................................................................................8
2. Accounting Analysis...................................................................................................................................................8
Three Key Accounts in the balance sheet of both the company...........................................................................8
Evaluating the quality of disclosure......................................................................................................................9
Identifying 3 potential red flags for the company.................................................................................................9
3. Financial Analysis.....................................................................................................................................................10
ROE.....................................................................................................................................................................10
Dupont Analysis..................................................................................................................................................11
Financial Analysis...............................................................................................................................................11
Operating management Ratios............................................................................................................................11
Investment management Ratio............................................................................................................................15
Financial Leverage Ratios...................................................................................................................................17
Cross-sectional analysis...........................................................................................................................................18
Recommendations.........................................................................................................................................................19
Conclusion....................................................................................................................................................................20
References.....................................................................................................................................................................21
List of Appendix...........................................................................................................................................................23
Comprehensive Income............................................................................................................................................23
Financial Position.....................................................................................................................................................25
Dupont Method........................................................................................................................................................27
Cross Functional Analysis.......................................................................................................................................28
Financial Ratios........................................................................................................................................................29
Financial Figures......................................................................................................................................................30
Prospective Analysis................................................................................................................................................30

3FINANCIAL ANALYSIS
Introduction
The given study aims to conduct both financial and non-financial analysis of Pandora A/S
which is a designer, manufacturer of the high-quality hand-finished and affordable contemporary
jewellery. The company was founded in 1982 and headquartered in Copenhagen, Denmark. The
company is further seen to employ more than 26,500 people worldwide having more than 13,200
retail outlets in Thailand. The company is publicly listed on the Nasdaq Copenhagen stock
exchange in Denmark. The total revenue in 2017 was estimated to be 22.8 billion.
The analysis of the competitive strategy has been done as per comparison with Georg
Jensen which is also a maker of jewellery established in 1904. The study has considered the
financial analysis of both the companies and computed the critical analysis based on the financial
position of Pandora A/S. The financial analysis is based on the calculation of the various ratios
which has been identified as per critical analysis of the annual reports (Ehrnsperger 2017).
1. Business and Strategic Analysis
Analysis of the economy
Macroeconomic Factors affecting Pandora
The understanding the economy for the chosen Danish Jewellery company is
predominantly identified with the various types of the factors by analysing the PEST factors.
There have been several types of the external factors which influence the operational
performance of he company. In addition to this, some of the different types of the other factors
are considered with the external factors which influence the performance and operations in the
company. As per the data provided in the annual report it needs to be identified that the Pandora
A/S will face several challenges pertaining to the macro environment performance other than the
competitive forces. In addition to this, it needs to be discerned that the industry may be profitable
with the strong growth projections made for a positive political scenario. Some of the main form
of the macro environment factors needs to be discerned as per the inclusion of inflation, rate of
savings, rate of interest, rate foreign exchange and the economic cycle which is beneficial in the
determination of the aggregate demand and investment in the economy (Jun et al. 2017).

4FINANCIAL ANALYSIS
On the contrary, the micro environment factors are seen to be depicted in terms of the
consideration of the various types of the factors such as economic indicators in the jewellery
industry and consumer spending. Some of the other micro environment factors need to be
identified as per the growth rate, inflation and industry’s economic indicators.
Industry analysis
Identification of the Industry
The industry analysis of Pandora A/S is identified with the market factors which
influence the developmental initatives in the company. These factors are considered to influence
the competitors and market which involve the appropriate and supplier. The industry in which
Pandora A/S operates has been depicted with jewellery manufacturer and retailer. The total
market share of the company is seen as DKK 110.03m (Chandra 2017).
Identification of the Competitor Company
The analysis of the competitor company is identified with Georg Jensen which is dealing
with the same products. The overall EBIT margin of the company increased from 17 DKK
million in 2015 to 55 DKK million in 2016. The EBIT margin further increased to 74 DKK
million in 2017. It needs to be further identified that Pandora A/S and Georg Jensen needs to be
considered as the pioneers in the Danish jewellery business. However, in terms of market share it
is discerned that Pandora A/S is clearly in a better position in compared to Georg Jensen
(Fibre2fashion.com. 2018).
Porters Five Force Analysis with Assessment
The consideration of Porter’s five forces framework is inferred to be conducive in terms
of following points:
Threat of new entrants: As a jewellery manufacturer it is important for considering the new
procedures and the business strategies followed by Pandora A/S which has been mainly
considered with competitive pricing strategy. The threat of new entrant has been seen to be
moderate in nature.

5FINANCIAL ANALYSIS
Bargaining power of the suppliers: The suppliers powerful in the consumer sector has been
seen to be based on the posing a negotiating power and charge higher price. This will
significantly impact on the bargaining position of the suppliers and profitability. Therefore,
suppliers have a high bargaining power (Fischer, A. and Pascucci 2017).
Bargaining power of the Buyers: It can prove to be difficult for Pandora A/S to earn profit in
the long-run. However, in the jewellery business in Copenhagen the consumers have a relatively
low bargaining power.
Threat of the substitutes: The company offers wide range of precious stones and high-quality
gold and silver jewellery and alternatives to such products is seen to be low in the market.
Competitor rivalry: The competitive rivalry in the operating industry for Pandora A/S is
depicted with other players such as Ole Lynggaard Copenhagen, Georg Jensen Silver, Marlene
Juhl Jørgensen Fine Jewellery, Zarah Voigt Boutique, Julie Sandlau Flagship Store, Ladyfingers,
Marianne Dulong, Jane Kønig Store and House of Amber. Henceforth, the competitive rivalry in
the industry is seen to be very high (Fleisher, C. S., & Bensoussan, B. E. 2015).
Industry’s Growth Potential
In the last few years, the Danish fashion industry went through several paradigms
associated with luxury retailers and changes in the high-street trend. The brands such as Ganni,
Saks Potts and Stine Goya are seen to be conquering the fashion business by combination of
fashionable trends and jewellery. At present the company has been able to get a prime spot in the
market which is seen to be associated to the various type of the services which are seen to be
based on international consumers and trendsetting influencers. The main mission of the company
has been seen to be associated to the various types of the functions which are depicted to be
considered with created a dedicated market for Danish and Scandinavian at the time of
Copenhagen Fashion Week (Giannakis and Papadopoulos 2016).
In the 11th edition, the jewellery room is seen to be supported with large number of
emerging talents ranging from Maria Black, Orit Elhanati and Pernille Lauridse. Moreover, the
potential of the jewellery pressroom is seen with the industry dedicated to the online space in
which the brands are organised in one single roof. The Jewellery Room is depicted to be

6FINANCIAL ANALYSIS
conducive with the various types of services which are associated with the changes brought to
Danish fashion. Moreover, the Danish Jewellery is often boosted with the changes among the
consumer behaviour which are seen with the increasing nature of daring designs and strong
storytelling. The brands such as Ole Lynggard’s masterful designs, Georg Jensen’s has created a
serval collaboration with the new artists which are depicted with the Nadia Shelbaya’s playful
pearl and gold creations. In addition to this, some of the other designer jewellery stores such as
Matchesfashion.com is also considered with assessment of the exact requirement of the clients
(Grant 2016).
Company’s competitive and corporate strategy
Company’s competitive strategy, risk factors and growth potential
The competitive strengths of Pandora A/S are depicted in terms of designs and quality of
jewellery as agility of the value chain and an improved focus on the sustainability. The company
has maintained its brand as a leader of affordable player in the jewellery segment and often
referred as the largest producer of jewellery as per the pieces crafted. The main USP of the
company is identified in terms of quality and craftmanship. It is further depicted to innovate with
the designs which enhances the overall value chain. Moreover, the experience offered by
Pandora sets it apart from the other competitors. The company further involved in several types
of the risk awareness programs which are depicted to be aimed at increasing the awareness of the
risk management and appointment of the persons in each region where the operations exists. As
the company is involved with significant number of markets there is ample scope of growth
opportunity and earnings (Hill et al. 2014).
Georg Jensen has taken continued initiative to modernise the overall retail business and
making improvement to the digital shopping capabilities. This is seen to be based on
rationalising the network of physical shops. This has been further marked with an important step
for competing in an omni-channel approach which will prove to be more powerful and
competitively advantageous to the company. The business management done by the company
has been considered with the segregation of the risk as per commercial risk, logistics risk,
production facilities, IT breakdown, employees, brand and image. The company manages the
various types of the financial risk in terms of the monitoring the foreign exchange fluctuations.

7FINANCIAL ANALYSIS
The management of the company expects a significant growth potential in the operating profit
segment (ATARERE et al. 2016).
Company’s corporate strategy
The strategic business strategies of Pandora A/S acts as the pillars for providing the right
direction to the consumers. Some of the main aspects of the corporate strategy are discerned as
per Innovate affordable jewellery, Agile manufacturing, Digitalised brand experience and
success in the omni-channel retail.
The business strategy adopted by Georg Jensen is considered with clear focus and
foundation on the performance improvements which will ensure continuous improvement for the
company. The business risk of the company is set in such a way that they are related to the brand
reputation, followed with a proactive communications strategy and which is consistent with the
communication efforts and public relations. The contribution of UN Global Compact signatory is
also seen to play a pivotal role in the formulation of the business strategy of the company (Prause
2014).
2. Accounting Analysis
Three Key Accounts in the balance sheet of both the company
The assessment of the main accounts for Pandora A/S in the balance sheet are identified
with current assets, current liabilities and stockholders’ equity. The current assets compose of the
accounts such as inventories, Derivative financial instruments, Trade receivables, Income tax
receivable, other receivable and cash. The total balance is depicted to increase from DKK 6356
m in 2016 to 6744 m in 2017. The accounts under the current liabilities are identified with
Derivative financial instruments, Trade payables, Income tax payable, loans and borrowings. The
total balance of the liabilities is identified to increase from DKK 8291 m in 2016 to DKK 10726
m in 2017. The accounts under equity is seen with Share capital, treasury shares, reserves,
dividend proposed and retained earnings. The total equity of the company increased from DKK
6794 m in 2016 to DKK 6514 m in 2017 (Euwema et al. 2014).

8FINANCIAL ANALYSIS
Similarly, the current assets for Georg Jensen is considered with items such as trade
receivables, receivables from the group enterprises, other receivables, deferred tax assets and
prepayments. The items under the current liabilities account needs to be seen with credit
institutions, trade payables, payables to the group enterprises, corporation tax and other payables.
The total balance of the current liabilities increased from DKK 3331m in 2016 to DKK 3847m in
2017. The total equity consists of the accounts such as share capital, share premium account,
Reserve for development costs and retained earnings. The total equity of Georg Jensen decreased
from DKK 4576 in 2016 to DKK 4154 m in 2017 (Renz 2016).
Evaluating the quality of disclosure
The preparation of the annual report of Pandora A/S has been prepared as per
International “Financial Reporting Standards (IFRS)” which has adopted the guidelines as
prescribed by EU and additional Danish disclosure requirements. The consolidation of the
financial statement is further seen to be based on the various types of the disclosures as stated
under Group’s and the Parent Company’s operations.
The preparation of the annual report of Georg Jensen is depicted to be in accordance with
the “International Standards on Auditing (ISAs)” along with the additional requirements which
are Applicable in Denmark. The company’s independent activities are seen to be considered as
per the “Inter-national Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (IESBA Code)” (Barr and McClellan 2018).
Identifying 3 potential red flags for the company
The three potential red flag areas of the company are seen in terms of commodity,
product development, Crafting and Supply Chain Major Market. The potential red flag
associated to the commodity is considered with the increase in the cost of goods for the range of
products offered by the company. In addition to this, the risk areas are also seen to be evident in
terms of the changes in the raw material cost especially gold and silver. Secondly, the red flag
area in the product development are considered as per the uncertainties pertaining to the new
jewellery designs do not adhere to the customer expectations or gain the desired traction in the
markets. Crafting and Supply Chain Major Market may get affected by large number of reasons

9FINANCIAL ANALYSIS
which are seen to be based on the factors impacting on the stability of the supply chain.
However, these are not seen to be limited to the loss of suppliers, disasters pertaining to the
physical IT infrastructure at the crafting facilities and the distribution centres. There is a potential
risk of interruption in the sourcing, manufacturing and/or delivery activities (Balazs et al. 2016).
The potential red flag areas for Georg Jensen are concerned with business aspects,
financial and external risk concerns. The concerns related to the business risk are based on the
commercial red flag areas which are evident among the consumption of the luxury goods. Some
of the other concerns are also related to logistics risk and production facilities. The red flag areas
of the financial concerns are seen to be based on increased exposure to the foreign exchange
flections. These concerns are also depicted as per the changes variations in the commodity prices
of gold, silver, steel, brass, precious stones. The third red flag area of external risk is considered
with the different types of the issues such as the macroeconomic factors. At times it may not be
possible for the company to predict the sales which allows for flexible planning and discern the
appropriate impact of the cyclical economic trends (Karadag 2015).
3. Financial Analysis
ROE
d) Efficiency Ratio Analysis: -
Pandora A/S Georg Jensen
2017 2016 2015 2017 2016 2015
Net Income 5768 6025 3688 -35.0 -107.0 -111.0
Total Equity 1595 1999.5 2241 4154 4576 4698
Book Value per share 675.5 924 872 630.00 540.00 650.00
Return on Equity 3.62 3.01 1.65 -0.01 -0.02 -0.02
Price to Earnings Ratio 3.42 3.25 3.12 27.4 29.3 29.6
Price to Book Value Ratio 675.5 924 872 630 540 650
2015 2016 2017
Pandora A/S 1.65 3.01 3.62
Georg Jensen -0.02 -0.02
-
0.01

10FINANCIAL ANALYSIS
The ROE of Pandora A/S is in a better position in compared to Georg Jensen. This is
evident with the increase of 1.65 in 2015, 3.01 in 2016 and 3.62 in 2017. On the other hand,
Georg Jensen has considerably struggled to maintain a good net income in terms of total asset
and total equity.
Dupont Analysis
Dupont Analysis
Pandora A/S Georg Jensen
Particulars 2017 2016 2015 2017 2016 2015
Net Income 5768 6025 3688 -35 -107 -111
Total Asset 2409.6 2566.8 2684.6 9556.437 9001.985 8587.064
Total
Equity 1595 1999.5 2241 6239 4798 5385
ROE 3.62 3.01 1.65 -0.01 -0.02 -0.02
The investigation of the ROE is performed in an extended manner with the use of du
point analysis which emphasizes on the scope of improvements which are seen to be associated
with the strength and weak point of company. It is also seen to be a requirement of Georg Jensen
to concentrate on increasing the income generated in terms of the total value of equity. In
addition to this, Pandora A/S should look forward to retain the optimum utilization of its assets
which is responsible for a stable ROE.
Financial Analysis
Operating management Ratios
Operating Performance Ratio
Pandora A/S Georg Jensen
2017 2016 2015 2017 2016 2015

11FINANCIAL ANALYSIS
Net Sales 22781 20281 16737 1089 1091 1144
Total Fixed Assets 2324 1767 1237 0 54.00 47.00
Total no. of employees 20904 17770 13971 1287
1352.0
0 1440.00
Days Inventory Outstanding 8 8 6 0 1.12 1.45
Days Sales Outstanding 62 56 46 3 3 3
Days Payable Outstanding 5 4 4 3 3 3
Operating Expense 9182 7819 6379 39 15.00 76.00
Fixed Asset Turnover Ratio 37.24 31.80 26.98 Nil 18.07 15.00
Sales/Revenue Per Employee 1.09 1.14 1.20 0.85 0.81 0.79
Operating Cycle 75 68 56 5.75 7.06 7.23
Operating Ratio 40% 39% 38% 4% 1% 7%
Some of the important ratios considered for the operating performance of the company
are identified as per the fixed asset turnover ratio, operating ratio, revenue per employee ratio
and operating cycle.
It needs to be discerned that the fixed assets turnover ratio for Pandora A/S has shown a
positive trend. However, the despite of the increasing performance of Georg Jensen in terms of
the Fixed Asset Turnover Ratio from 2015 to 2016, the company has not shown a favourable
performance in 2017.

12FINANCIAL ANALYSIS
2017 2016 2015
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00 37.24
31.80
26.98
0.00
18.07
15.00
Fixed Asset Turnver Ratio
Pandora A/S Georg Jensen
The sales per employee is also seen to be in a better position for Pandora A/S. Therefore,
Pandora A/S has efficiently made use of the amiable human resources to generate more revenues
for the business.
2017 2016 2015
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.09 1.14 1.20
0.85 0.81 0.79
Sales/Revenue Per Employee
Pandora A/S Georg Jensen

13FINANCIAL ANALYSIS
In addition to this, in terms of the operating ratio Pandora A/S has been able to generate
more revenues for the company by incurring a minimum amount of the operating expenses. It
needs to be further identified that the different type of the concerns associated to the performance
of the Georg Jensen are related to the increasing operating expenses.
2017 2016 2015
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
40% 39% 38%
4%
1%
7%
Operating Ratio
Pandora A/S Georg Jensen
The operating cycle ratio of Pandora A/S is considered to be maintaining better Days
Inventory Outstanding, Days Sales Outstanding and Days Payable Outstanding.
2017 2016 2015
0
10
20
30
40
50
60
70
80 75
68
56
65.75 7.06 7.23
Operating Cycle
Pandora A/S Georg Jensen

14FINANCIAL ANALYSIS
Investment management Ratio
Investment Management
Pandora A/S Georg Jensen
Particulars 2017 2016 2015 2017 2016 2015
Net Sales 22781 20281 16737 1089 1091 1144
Inventories 2729 2729 2357 3997 3592 3417
COGS 5815 5058 4544 5815 5058 4544
Accounts Receivable 1954 1673 1360 1076 1536 1665
Inventory Turnover Ratio 8.35 7.43 7.10 0.27 0.30 0.33
Days' Sales in Inventory 171.30 196.93 189.33 250.89 259.21 274.47
Average Collection Period 0.001%
0.001
% 0.002% 0.031% 0.022% 0.019%
Receivables Turnover (Times) 11.66 12.12 12.31 1.01 0.71 0.69
The main computation of some of the main ratio pertaining to the Investment
Management are identified with the computation of the asset’s turnover ratio, inventory turnover
ratio and days sales in inventory. In addition to this, there is a linear increase in the Inventory
Turnover Ratio for Pandora A/S. This is depicted with total inventory turnover ratio of 8.35
2017, 7.43 in 2016 and 7.10 in 2015. However, Georg Jensen significantly poor in terms of
inventory management. This is seen to be evident with 0.27 in 2017, 0.30 in 2016 and 0.33 in
2015.
Financial Leverage
Pandora A/S Georg Jensen
2017 2016 2015 2017 2016 2015
Total Liabilities 1195.8 1557.2 1309.6 4909 4941 4966
Total Assets 2957 3576 3744 9201 9676 9764
Total Equity 1595 1999.5 2241 4154 4576 4698
Debt Ratio 0.40 0.44 0.35 0.53 0.51 0.51
Debt to Equity Ratio 0.75 0.78 0.58 1.18 1.08 1.06
Equity Ratio 0.54 0.56 0.60 0.45 0.47 0.48
Equity Multiplier Ratio 1.9 1.8 1.7 2.2 2.1 2.1

15FINANCIAL ANALYSIS
The average collection period of Pandora A/S is seen to be comparatively much faster
than Georg Jensen in collecting the payment from the debtors.
2017 2016 2015
0.000%
0.005%
0.010%
0.015%
0.020%
0.025%
0.030%
0.035%
Average Collection Period
Pandora A/S Georg Jensen
The position of Georg Jensen is better in terms of maintaining a lower COGS in terms of
the inventories.
2017 2016 2015
0.00
50.00
100.00
150.00
200.00
250.00
300.00
Days' Sales in Inventory
Pandora A/S Georg Jensen

16FINANCIAL ANALYSIS
The time for the Receivables Turnover is clearly in a better position for Pandora A/S.
This shows it requires less time for collection of payment.
2017 2016 2015
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
11.66 12.12 12.31
1.01 0.71 0.69
Receivables Turnover (Times)
Pandora A/S Georg Jensen
Financial Leverage Ratios
The computation of the Financial Leverage is included with the ratios such as Debt Ratio,
Debt to Equity Ratio, Equity Ratio and Equity Multiplier Ratio.
The D/E ratio performance of Pandora A/S is clearly seen to be in a beater position with a
lower reliance on the long-term borrowings to finance the assets.

17FINANCIAL ANALYSIS
2017 2016 2015 2017 2016 2015
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.40 0.44
0.35
0.53 0.51 0.51
Debt Ratio
Pandora A/S Georg Jensen
The equity ratio performance of Pandora A/S is also better than Georg Jensen. This shows a
better utilization of the equity obtained from the shareholders by Pandora A/S.
2017 2016 2015 2017 2016 2015
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.54 0.56 0.60
0.45 0.47 0.48
Equity Ratio
Pandora A/S Georg Jensen
It can be recognised that Debt-to-equity ratio for Pandora A/S. is better than Georg Jensen.

18FINANCIAL ANALYSIS
2017 2016 2015 2017 2016 2015
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
0.75 0.78
0.58
1.18
1.08 1.06
Debt to Equity Ratio
Pandora A/S Georg Jensen
Cross-sectional analysis
The conduction of the time series analysis of Pandora A/S and Georg Jensen is discerned
with the changes in the ROE from 2015 to 2017. It can be seen that fall in the ROE in the recent
years may be a result of the macroeconomic changes which had significantly affected the
jewellery designers of Copenhagen.
2015 2016 2017
-0.50
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
Time Series Analysis
Pandora A/S Georg Jensen

19FINANCIAL ANALYSIS
Recommendations
As per the findings of several types of ratios, stock performance and WACC it needs to
be understood that Pandora A/S is in a much favourable position in terms of financial
performance compared to Georg Jensen. The overall findings further imply that the potential red
flag concerns are seen in terms of commodity, product development, Crafting and Supply Chain
Major Market. The potential red flag associated to the commodity is considered with the increase
in the cost of goods for the range of products offered by the company. In addition to this, the risk
areas are also seen to be evident in terms of the changes in the raw material cost especially gold
and silver. However, the increasing aspects such as equity ratio performance of Pandora A/S,
operating cycle ratio, prospective analysis and financial leverage ratio simply shows that the
company is in a much better position from investor’s perspective. Therefore, it can be concluded
that Pandora A/S has depicted an overall good result in all the financial parameters and it is a
good decision to invest in long-term with a medium risk.
Conclusion
The findings from the understanding the economy for the chosen Danish Jewellery
company is predominantly identified with market factors which influence the developments in
the company. These factors are considered to influence the competitors and market which
involve the appropriate and supplier. Moreover, in terms of the Identification of the Competitor
Company it needs to be seen that Pandora A/S has performed better in all aspects. The main form
of the competitive strengths of Pandora A/S needs to be identified as per the designs and quality
of jewellery as agility of the value chain and an improved focus on the sustainability. On the
contrary, Georg Jensen has taken continued initiative to modernise the overall retail business and
making improvement to the digital shopping capabilities however it has failed to retain the
customers due to increase price of the fashion jewellery. Some of the main aspects of the
corporate strategy are discerned as per Innovate affordable jewellery, Agile manufacturing,
Digitalised brand experience which are seen as the main contributing factor for its success in the
market.

20FINANCIAL ANALYSIS
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Fleisher, C. S., & Bensoussan, B. E. 2015. Business and competitive analysis: effective
application of new and classic methods. FT Press.
Giannakis, M. and Papadopoulos, T., 2016. Supply chain sustainability: A risk management
approach. International Journal of Production Economics, 171, pp.455-470.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Hill, C. W., Jones, G. R., & Schilling, M. A. 2014. Strategic management: theory: an integrated
approach. Cengage Learning.

21FINANCIAL ANALYSIS
Jun, L.I.U., LIU, J.Y., ZHANG, N., YANG, Q.H. and Xia, B.I., 2017. Analysis and Evaluation
of Economic Activities in Power Enterprise Based on Project Management. DEStech
Transactions on Environment, Energy and Earth Sciences, (eesd).
Karadag, H., 2015. Financial management challenges in small and medium-sized enterprises: A
strategic management approach. EMAJ: Emerging Markets Journal, 5(1), pp.26-40.
Prause, G., 2014. A green corridor balanced scorecard. Transport and Telecommunication
Journal, 15(4), pp.299-307.
Renz, D.O., 2016. The Jossey-Bass handbook of nonprofit leadership and management. John
Wiley & Sons.

22FINANCIAL ANALYSIS
List of Appendix
Comprehensive Income
Accounting Analysis
Pandora A/S
STATEMENT OF COMPREHENSIVE INCOME 2015 2016 2017
TOTAL REVENUE 16,737 20,281 22,781
Charms 10,833 11,991 12,920
Silver and gold bracelets 1,923 3,672 3,965
Rings 2,066 2,643 3,161
Other J ewellery 1,915 1,975 2,735
TOTAL EXPENSES 11,476 12,959 15,312
Sales, distribution and marketing expenses 4,722 5,838 7,045
Administrative expenses 1,657 1,981 2,137
Cost of Sales 4,544 5,058 5,815
Finance Cost 553 82 315
Profit before net investment income and tax 5,261 7,322 7,469
Finance Income 84 328 198
PROFIT BEFORE INCOME TAX 5,345 7,650 7,667
Income tax expenses 1,671 1,625 1,899
PROFIT AFTER TAX FOR THE YEAR 3,674 6,025 5,768
Dividends Paid -1,088 -1,507 -3,995
Retained earnins for the year after dividends paid 2,586 4,518 1,773
Retained earnings previous year 6,537 7,635 8,823
Transfers upon sale of properties 35 31 12
Other comprehensive income 3,968 4,897 9485
Accumulates retained earnings 13,126 17,081 20,093
-12,103 -15,900 -19,171

23FINANCIAL ANALYSIS
Georg J enson
STATEMENT OF COMPREHENSIVE INCOME 0 0 0
TOTAL REVENUE 9,744 10,914 10,886
Revenue from sales 9,744 10,914 10,886
0 0 0
0 0 0
TOTAL EXPENSES 11,039 11,791 11,224
Cost of sales 4,245 4,429 4,131
Sales and distribution expenses 5,130 5,460 5,071
Administration Expenses 1,678 1,926 2,032
Other operating items -14 -24 -10
Profit before net investment income and tax -1,295 -877 -338
Financial items net -154 -166 -289
PROFIT BEFORE INCOME TAX -1,449 -1,043 -627
Income tax expenses -22 -25 -183
PROFIT AFTER TAX FOR THE YEAR -1,427 -1,018 -444
Dividends Paid -1,088 -1,507 -3,995
Retained earnins for the year after dividends paid -2,515 -2,525 -4,439
Retained earnings previous year 6,537 7,635 8,823
Transfers upon sale of properties 35 31 12
Other comprehensive income 3,968 4,897 9485
Accumulates retained earnings 8,025 10,038 13,881

24FINANCIAL ANALYSIS
Financial Position
Accounting Analysis
Pandora A/S
STATEMENT OF FINANCIAL POSITION 2015 2016 2017
DKK Million
TOTAL ASSETS 13,311 15,085 17,240
TOTAL CURRENT ASSETS 5,587 6,356 6,744
Inventories 889 2,729 2,729
Derivative financial instruments 2,357 161 153
Trade receivables 65 1,673 1,954
Income tax receivable 1,360 142 143
Other receivables 113 754 772
Cash 803 897 993
TOTAL NON-CURRENT ASSETS 7,724 8,729 10,496
Intangible assets 5,449 5,766 6,999
Property, plant and equipment 1,237 1,767 2,324
Deferred tax Assets 879 946 884
Other Financial Assets 159 250 289
0 0
0 0
TOTAL LIABILITIES 7,172 8,291 10,726
TOTAL CURRENT LIABILITIES 4,082 4,396 4,311
Provisions 971 1,004 649
Loans and borrowings 257 3 164
Derivative financial instruments 214 256 143
Trade Payables 1,329 1,622 1,706
Income Tax payable 306 547 572
Other payables 1,005 964 1,077
TOTAL NON-CURRENT LIABILITIES 3,090 3,895 6,415
Provisions 97 101 150
Loans and borrowings 2,350 3,008 5,283
Deferred tax liabilities 394 393 501
Other payables 249 393 481
TOTAL STOCKHOLDER EQUITY 6,139 6,794 6,514
Share capital 122 117 113
Treasury shares -4,152 -4,334 -1,999
Reserves 1,023 1,181 922
Dividend proposed 1,511 1,007 987
Retained earnings 7,635 8,823 6,491
TOTAL LIABILITY +EQUITY 13,311 15,085 17,240

25FINANCIAL ANALYSIS
Georg J enson
STATEMENT OF COMPREHENSIVE INCOME 0 0 0
TOTAL REVENUE 9,744 10,914 10,886
Revenue from sales 9,744 10,914 10,886
0 0 0
0 0 0
TOTAL EXPENSES 11,039 11,791 11,224
Cost of sales 4,245 4,429 4,131
Sales and distribution expenses 5,130 5,460 5,071
Administration Expenses 1,678 1,926 2,032
Other operating items -14 -24 -10
Profit before net investment income and tax -1,295 -877 -338
Financial items net -154 -166 -289
PROFIT BEFORE INCOME TAX -1,449 -1,043 -627
Income tax expenses -22 -25 -183
PROFIT AFTER TAX FOR THE YEAR -1,427 -1,018 -444
Dividends Paid -1,088 -1,507 -3,995
Retained earnins for the year after dividends paid -2,515 -2,525 -4,439
Retained earnings previous year 6,537 7,635 8,823
Transfers upon sale of properties 35 31 12
Other comprehensive income 3,968 4,897 9485
Accumulates retained earnings 8,025 10,038 13,881

26FINANCIAL ANALYSIS
Dupont Method
Financial Analysis
Pandora A/S Georg J ensen
DUPOINT METHOD 2015 2016 2017 DUPOINT METHOD 2015 2016 2017
Sales 16,737 20,281 22,781 Sales 9,744 10,914 10,886
Cost of Goods 6,379 7,819 9,182 Cost of Goods 9,375 9,889 9,202
Gross Profit 10,358 12,462 13,599 Gross Profit 369 1,025 1,684
Gross Profit Margin 61.89% 61.45% 59.69% Gross Profit Margin 3.79% 9.39% 15.47%
Variable expenses 5,097 5,140 6,130 Variable expenses 1,664 1,902 2,022
Finance Income 84 328 198 Net investment income -154 -166 -289
Income tax expenses 1,671 1,625 1,899 Income tax expenses -22 -25 -183
PROFIT AFTER TAX 3,674 6,025 5,768 PROFIT AFTER TAX -1,427 -1,018 -444
Net Profit Margin / Return on Sales 21.95% 29.71% 25.32% Net Profit Margin / Return on Sales -14.64% -9.33% -4.08%
TOTAL ASSETS 13,311 15,085 17,240 TOTAL ASSETS 8,955 9,327 8,898
Sales 16,737 20,281 22,781 Sales 9,744 10,914 10,886
Total Asstests Turnover 1.26 1.34 1.32 Total Asstests Turnover 1.09 1.17 1.22
Return on Assets 27.60% 39.94% 33.46% Return on Assets -15.94% -10.91% -4.99%
TOTAL STOCKHOLDER EQUITY 6,139 6,794 6,514 TOTAL STOCKHOLDER EQUITY 4,572 4,727 4,292
TOTAL ASSETS 13,311 15,085 17,240 TOTAL ASSETS 8,955 9,327 8,898
Financial Leverage 2.168 2.220 2.647 Financial Leverage 1.959 1.973 2.073
Return on Equity - ROE 59.85% 88.68% 88.55% Return on Equity - ROE -31.21% -21.54% -10.34%

27FINANCIAL ANALYSIS
Cross Functional Analysis
Financial Analysis
Pandora A/S Georg J ensen
STATEMENT OF FINANCIAL POSITION 2015 2016 2017 STATEMENT OF FINANCIAL POSITION 2015 2016 2017
TOTAL ASSETS 100.00% 100.00% 100.00% TOTAL ASSETS 8955.00 9327.00 8898.00
TOTAL CURRENT ASSETS 41.97% 42.13% 39.12% TOTAL CURRENT ASSETS 6293.00 6607.00 6519.00
Cash and cash equivalents 6.68% 18.09% 15.83% Inventories 3468.00 3592.00 3997.00
Trade and other receivables 17.71% 1.07% 0.89% Trade Receivables 1423.00 1536.00 1076.00
Financial assets at fair value through profit or loss 0.49% 11.09% 11.33% Receivables from groeup enterprisses 65.00 87.00 114.00
Deferred acquisition costs 10.22% 0.94% 0.83% Other Receivables 197.00 197.00 75.00
Other current assets 0.85% 5.00% 4.48% Deferred tax assets 785.00 781.00 1032.00
Assets held for sale 6.03% 5.95% 5.76% Prepayments 355.00 414.00 225.00
TOTAL NON-CURRENT ASSETS 58.03% 57.87% 60.88% TOTAL NON-CURRENT ASSETS 2662.00 2720.00 2379.00
Property plant and equipment 40.94% 38.22% 40.60% Intangible assets 974.00 984.00 999.00
Accumulated depreciation and impairments PPE 9.29% 11.71% 13.48% Tangible assets 1356.00 1397.00 1093.00
Intangible assets 6.60% 6.27% 5.13% Financial assets 332.00 339.00 287.00
Accumulated depreciation and impairments IA 1.19% 1.66% 1.68%
Deferred adquisitions costs 0.00%
Other assets 0.00%
########
TOTAL LIABILITIES 53.88% 54.96% 62.22% TOTAL LIABILITIES #REF! #REF! #REF!
TOTAL CURRENT LIABILITIES 30.67% 29.14% 25.01% TOTAL CURRENT LIABILITIES 3259.00 3331.00 3847.00
Trade and other payables 7.29% 6.66% 3.76% Payable to group enterprises 560.00 582.00 1526.00
Claims liabilities 1.93% 0.02% 0.95% Provision under insurance contracts issued 1054.00 1076.00 1011.00
Unerned premium liability 1.61% 1.70% 0.83% Borrowing subordinated and other interest liabilities 75.00 81.00 69.00
Tax liabilities 9.98% 10.75% 9.90% Tax liabilities 10.00 20.00 18.00
Provisione and employee entitlements 2.30% 3.63% 3.32% Other Liabilities 1560.00 1572.00 1223.00
7.55% 6.39% 6.25%
TOTAL NON-CURRENT LIABILITIES 23.21% 25.82% 37.21% TOTAL NON-CURRENT LIABILITIES 560.00 582.00 1526.00
Trade and other payables 0.73% 0.67% 0.87% Credit institutions 560.00 582.00 1526.00
Claims liabilities 17.65% 19.94% 30.64%
Unerned premium liability 2.96% 2.61% 2.91%
Deferred tax liabilies 1.87% 2.61% 2.79%
Provisione and employee entitlements 0.00%
TOTAL STOCKHOLDER EQUITY 46.12% 45.04% 37.78% TOTAL STOCKHOLDER EQUITY 4572.00 4727.00 4292.00
Contributed equity 0.92% 0.78% 0.66% Equity 4,432 4,576 4,154
Reserves -31.19% -28.73% -11.60% Provisions 140 151 138
Retained earnings 7.69% 7.83% 5.35%
TOTAL LIABILITY +EQUITY TOTAL LIABILITY +EQUITY
STATEMENT OF COMPREHENSIVE INCOME 2015 2016 2017 STATEMENT OF COMPREHENSIVE INCOME 2015 2016 2017
TOTAL REVENUE 100.00% 100.00% 100.00% TOTAL REVENUE 9744.00 10914.00 10886.00
Health insurance premium revenue 64.72% 59.12% 56.71% Revenue from sales 9744.00 10914.00 10886.00
Medibank Health revenue 11.49% 18.11% 17.40%
Other Income 12.34% 13.03% 13.88%
TOTAL EXPENSES 68.57% 63.90% 67.21% TOTAL EXPENSES #REF! #REF! #REF!
Claims expense 28.21% 28.79% 30.92% Cost of sales 4245.00 4429.00 4131.00
Medical service expense 9.90% 9.77% 9.38% Sales and distribution expenses 5130.00 5460.00 5071.00
Employee benefits expeneses 27.15% 24.94% 25.53% Administration Expenses 1678.00 1926.00 2032.00
Office and adminsitration expense 3.30% 0.40% 1.38% Other operating items -14.00 -24.00 -10.00
Marketing expense
Information service expense
Profesional service expense
Lease expense
Depreciation and amortisation expense
Other expense
Profit before net investment income and tax 31.43% 36.10% 32.79% Profit before net investment income and tax -1295.00 -877.00 -338.00
Net investment income 0.50% 1.62% 0.87% Net investment income -154.00 -166.00 -289.00
PROFIT BEFORE INCOME TAX 31.94% 37.72% 33.66% PROFIT BEFORE INCOME TAX -1449.00 -1043.00 -627.00
Income tax expenses 9.98% 8.01% 8.34% Income tax expenses -22.00 -25.00 -183.00
PROFIT AFTER TAX FOR THE YEAR 21.95% 29.71% 25.32% PROFIT AFTER TAX FOR THE YEAR -1427.00 -1018.00 -444.00

28FINANCIAL ANALYSIS
Financial Ratios
Pandora A/S Georg J ensen
OPERARING MANAGEMENT 2015 2016 2017 OPERARING MANAGEMENT 2015 2016 2017
Profitability 2015 2016 2017 Profitability 2015 2016 2017
EBIT 5,345 7,650 7,667 EBIT -1,449 -1,043 -627
EBITDA 5,345 7,650 7,667 EBITDA -1,449 -1,043 -627
EBIT Magin 31.94% 37.72% 33.66% EBIT Magin -14.87% -9.56% -5.76%
EBITDA Margin 31.94% 37.72% 33.66% EBITDA Margin -14.87% -9.56% -5.76%
Gross Profit Margin 31.43% 36.10% 32.79% Gross Profit Margin -13.29% -8.04% -3.10%
Net Profit Margin 21.95% 29.71% 25.32% Net Profit Margin -14.64% -9.33% -4.08%
ROE 59.85% 98.14% 93.96% ROE -31.21% -21.54% -10.34%
ROS 21.95% 29.71% 25.32% ROS -14.64% -9.33% -4.08%
ROA 27.60% 39.94% 33.46% ROA -15.94% -10.91% -4.99%
INVESTMENT MANAGEMENT INVESTMENT MANAGEMENT
Working Capital Management 2015 2016 2017 Working Capital Management 2015 2016 2017
Operating working capital 616 -769 -296 Operating working capital -434 -316 -1,325
Operating working capital to sales ratio 0.04 -0.04 -0.01 Operating working capital to sales ratio -0.04 -0.03 -0.12
Operating working capital to turnover - times per year 27.17 -26.37 -76.96 Operating working capital to turnover - times per year-22.45 -34.54 -8.22
Accounts Receivables turnover - times per year 7 126 149 Accounts Receivables turnover - times per year 7 7 10
Accounts Payables turnover - times per year 5 8 11.29 Accounts Payables turnover - times per year 19.74 20.30 7.36
Days Receivables 51.40 2.90 2.45 Days Receivables 53.30 51.37 36.08
Days Payables 70.26 47.01 32.32 Days Payables 18.49 17.98 49.58
Cash operating Cycle - days -19 -44 -30 Cash operating Cycle - days 35 33 -14
Working Capital Management 2015 2016 2017 Working Capital Management 2015 2016 2017
Net long/term assets 4,634 4,834 4,081 Net long/term assets 1,604 1,102 1,317
Net long/term assets turnover - times per year 4 4 6 Net long/term assets turnover - times per year 6 10 8
PPE Turnover - times per year 2 2 2 PPE Turnover - times per year 4 4 5
FINANCING STRATEGY / LIQUIDITY AND SOLVENCY FINANCING STRATEGY / LIQUIDITY AND SOLVENCY
Liquidity Ratios 2015 2016 2017 Liquidity Ratios 2015 2016 2017
Current ratio 1.37 1.45 1.56 Current ratio 1.93 1.98 1.69
Quick ratio 0.80 0.66 0.67 Quick ratio 1.50 1.54 1.32
Cash rato 0.22 0.62 0.63 Cash rato 1.06 1.08 1.04
Solvency Ratios 2015 2016 2017 Solvency Ratios 2015 2016 2017
D/E Ratio / Debt-to-Equity Ratio 1.17 1.22 1.65 D/E Ratio / Debt-to-Equity Ratio 0.94 1.05 1.14
Net-Debt-to-Equity Ratio 1.02 0.82 1.23 Net-Debt-to-Equity Ratio 0.19 0.29 0.21
D/A Ratio / Debt-to-capital Ratio 0.54 0.55 0.62 D/A Ratio / Debt-to-capital Ratio 0.48 0.53 0.55
Net-Debt-to-Net Capital Ratio 0.63 0.51 0.37 Net-Debt-to-Net Capital Ratio 0.51 0.41 0.22
Interesest Coverage (erning Basis) / Lease Coverage 1.23 1.65 1.77 Interesest Coverage (erning Basis) / Lease Coverage 0.23 0.56 0.77
DIVIDEND POLICY
MARKET STOCK DATA
No of outstanding shares 8,23,567 18,647 28,782

29FINANCIAL ANALYSIS
Financial Figures
Pandora A/S Georg J ensen
OPERARING MANAGEMENT 2015 2016 2017 OPERARING MANAGEMENT 2015 2016 2017
Profitability 2015 2016 2017 Profitability 2015 2016 2017
EBITDA Margin Medibank 31.94% 37.72% 33.66% EBITDA Margin Bupa -14.87% -9.56% -5.76%
Gross Profit Margin Medibank 31.43% 36.10% 32.79% Gross Profit Margin Bupa -13.29% -8.04% -3.10%
ROE Medibank 59.85% 98.14% 93.96% ROE Georg J ensen -31.21% -21.54% -10.34%
INVESTMENT MANAGEMENT INVESTMENT MANAGEMENT
Working Capital Management 2015 2016 2017 Working Capital Management 2015 2016 2017
Operating working capital 616 -769 -296 Operating working capital -434 -316 -1,325
Operating working capital to sales ratio 0.04 -0.04 -0.01 Operating working capital to sales ratio -0.04 -0.03 -0.12
Operating working capital to turnover - times per year27.17 -26.37 -76.96 Operating working capital to turnover - times per year-22.45 -34.54 -8.22
Accounts Receivables turnover - times per year 7 126 149 Accounts Receivables turnover - times per year 7 7 10
Accounts Payables turnover - times per year 5 8 11.29 Accounts Payables turnover - times per year 19.74 20.30 7.36
Days Receivables 51.40 2.90 2.45 Days Receivables 53.30 51.37 36.08
Days Payables 70.26 47.01 32.32 Days Payables 18.49 17.98 49.58
Cash operating Cycle - days -19 -44 -30 Cash operating Cycle - days 35 33 -14
Working Capital Management 2015 2016 2017 Working Capital Management 2015 2016 2017
Net long/term assets 4,634 4,834 4,081 Net long/term assets 1,604 1,102 1,317
Net long/term assets turnover - times per year 4 4 6 Net long/term assets turnover - times per year 6 10 8
PPE Turnover - times per year 2 2 2 PPE Turnover - times per year 4 4 5
FINANCING STRATEGY / LIQUIDITY AND SOLVENCY FINANCING STRATEGY / LIQUIDITY AND SOLVENCY
Liquidity Ratios 2015 2016 2017 Liquidity Ratios 2015 2016 2017
Current ratio Pandora A/S 1.37 1.45 1.56 Current ratio Bupa 1.93 1.98 1.69
Quick ratio Georg J ensen 0.80 0.66 0.67 Quick ratio Bupa 1.50 1.54 1.32
Cash rato 0.22 0.62 0.63 Cash rato 1.06 1.08 1.04
Solvency Ratios 2015 2016 2017 Solvency Ratios 2015 2016 2017
D/E Ratio / Debt-to-Equity Ratio 1.17 1.22 1.65 D/E Ratio / Debt-to-Equity Ratio 0.94 1.05 1.14
D/A Ratio / Debt-to-capital Ratio 0.54 0.55 0.62 D/A Ratio / Debt-to-capital Ratio 0.48 0.53 0.55
Interesest Coverage (erning Basis) / Lease Coverage1.23 1.65 1.77 Interesest Coverage (erning Basis) / Lease Coverage 0.23 0.56 0.77
Prospective Analysis
Pandora A/S
MARKET STOCK DATA
MONTHLY CLOSING PRICE
(AUD) Market Value
Earnings per
Share P/E Ratio
Book Value
per share Pandora A/S 2015 2016 2017
31-01-2015 608.5 30.9 19.6926 0.0075 No of outstanding shares 8,23,567 18,647 28,782
28-02-2015 633.5 30.9 20.5016 0.0075 PROFIT AFTER TAX FOR THE YEAR 3,674 6,025 5,768
31-03-2015 689.5 30.9 22.3139 0.0075 EPS 0.0045$ 0.32$ 0.20$
30-04-2015 683 30.9 22.1036 0.0075 Market value 917.00 901.50 677.50
31-05-2015 719 30.9 23.2686 0.0075 P/E Ratio 2,05,555.51 2,790.09 3,380.69
30-06-2015 764 30.9 24.7249 0.0075 Dividends Paid 1,088 1,507 3,995
31-07-2015 768.5 30.9 24.8706 0.0075 Dividends per Share 0.13% 8.08% 13.88%
31-08-2015 779 30.9 25.2104 0.0075 Earning Yield Ratio 0.00% 0.04% 0.03%
30-09-2015 782.5 30.9 25.3236 0.0075 Total Assets 13,311 15,085 17,240
31-10-2015 837 30.9 27.0874 0.0075 Total Liabilities 7,172 8,291 10,726
30-11-2015 872 30.9 28.2201 0.0075 Net Assets 6,139 6,794 6,514
31-12-2015 917 30.9 29.6764 0.0075 No of outstanding shares 8,23,567 18,647 28,782
31-01-2016 869 52.8 16.4583 0.3643 Book Value of shares 0.01$ 0.36$ 0.23$
29-02-2016 857.5 52.8 16.2405 0.3643
31-03-2016 844 52.8 15.9848 0.3643 ROE Medibank 59.85% 98.14% 93.96%
30-04-2016 993.5 52.8 18.8163 0.3643
31-05-2016 907 52.8 17.1780 0.3643 Value per share - Valuation residual income model0.00% 0.00% 0.02
30-06-2016 866 52.8 16.4015 0.3643
31-07-2016 830 52.8 15.7197 0.3643
31-08-2016 801 52.8 15.1705 0.3643
30-09-2016 882 52.8 16.7045 0.3643
31-10-2016 835.5 52.8 15.8239 0.3643
30-11-2016 838 52.8 15.8712 0.3643
31-12-2016 901.5 52.8 17.0739 0.3643
31-01-2017 800 52 15.3846 0.2263
28-02-2017 772 52 14.8462 0.2263
31-03-2017 738 52 14.1923 0.2263
30-04-2017 627.5 52 12.0673 0.2263
31-05-2017 607.5 52 11.6827 0.2263
30-06-2017 723 52 13.9038 0.2263
31-07-2017 664 52 12.7692 0.2263
31-08-2017 621.5 52 11.9519 0.2263
30-09-2017 603 52 11.5962 0.2263
31-10-2017 626.5 52 12.0481 0.2263
30-11-2017 675.5 52 12.9904 0.2263
31-12-2017 677.5 52 13.0288 0.2263
Porspective Analysis

30FINANCIAL ANALYSIS
Pandora A/S
2015 2016 2017 FORCASTING Assumptions
FORCASTING Financial
Statements
Forcasted
year
Terminal
year
FORCASTING Financial
Statements
Forcasted
year
Terminal
year
Sales 16,737 20,281 22,781 2018 2019 Income statement 2018 Financial Position 2018 2019
Annual Sales Growth Rate 21.17% 12.33% Annual Sales Growth Rate 14.03% 10.52% Sales 25,977 28,709 net working capital -338 -373
Net Operating profit after tax3,674 6,025 5,768 Net Operating profit after tax 6,577 7,269 net long-term assets 11,969 13,227
NOPAT margin 21.95% 29.71% 25.32% NOPAT margin 25.32% 25.32% Net operating assets 11,631 12,854
Working capital 616 -769 -296 Net interest expense after tax - - Net Debt 6,043 6,679
Working capital to sales 3.68% -3.79% -1.30% Working capital to sales -1.30% -1.30% Opening equity 6,514 9,096
Long term assets 7,724 8,729 10,496 Net income 6,577 7,269 Profit 6,577 7,269
Long-term assets to sales 46.15% 43.04% 46.07% Long-term assets to sales 46.07% 46.07% Dividends paid -3,995 -5,579
TOTAL LIABILITIES 7,172 8,291 10,726 Closing equity 9,096 10,786
TOTAL CURRENT ASSETS5,587 6,356 6,744 Debt ratio 1.925 1.925 Net capital (closing) 26,771 30,320
Net Debt 1,585 1,935 3,982
Net Operating assets 2,018 1,883 2,069 After-tax cost of debt - - Valuation with abnormal earnings method
Debt ratio 0.785 1.028 1.925 Equity valuation
Net interest expense after tax - - - Dividend rate 61.3% 61.3% Cost of equity 0.27% 0.27%
After-tax cost of debt 0.00% 0.00% 0.00% Abnormal earnings 6,552 7,239
Dividends 1,088 1,507 3,995
Opening equity 6,139 6,794 6,514 Residual Income model: Valuation
Dividend rate 17.72% 22.18% 61.33% Opening equity 2017 6,514
PV of forecast 2018 (abnormal earnings) 6,534
PV of terminal year 2019 (abnormal earnings) 7,220
Firm Value 20,268
. No of outstanding shares 8,23,567
Value per share - Valuation residual income model 0.02
Porspective Analysis
MEDIBANK MARKET STOCK DATA
Cost of equity
MONTHLY CLOSING PRICE
(AUD)
Market Value
Medibank
Percentage
Monthly Change
Copenhagen
Real Time
Price
Percentage
Monthly
Change
Treasury bond rate (risk free rate) 0.45% 31-01-2015 608.50 570.5
Beta -0.040 28-02-2015 633.50 4% 578.5 1%
Risk premium 4.45% 31-03-2015 689.50 9% 607 5%
Cost of equity 0.27% 30-04-2015 683.00 -1% 624.5 3%
31-05-2015 719.00 5% 607.5 -3%
30-06-2015 764.00 6% 599.5 -1%
Capital structure 31-07-2015 768.50 1% 505.5 -16%
% net debt 62.22% 31-08-2015 779.00 1% 512.5 1%
% equity 37.78% 30-09-2015 782.50 0% 556 8%
Cost of capital 31-10-2015 837.00 7% 588 6%
Debt % 0.0% 30-11-2015 872.00 4% 612.5 4%
Equity % 0.27% 31-12-2015 917.00 5% 594 -3%
WACC % 0.10% 31-01-2016 869.00 -5% 593.5 0%
29-02-2016 857.50 -1% 624 5%
31-03-2016 844.00 -2% 633 1%
30-04-2016 993.50 18% 645 2%
31-05-2016 907.00 -9% 634.5 -2%
30-06-2016 866.00 -5% 644 1%
31-07-2016 830.00 -4% 625.5 -3%
31-08-2016 801.00 -3% 632 1%
30-09-2016 882.00 10% 608.5 -4%
31-10-2016 835.50 -5% 597 -2%
30-11-2016 838.00 0% 605.5 1%
31-12-2016 901.50 8% 615.5 2%
31-01-2017 800.00 -11% 616.5 0%
28-02-2017 772.00 -4% 644 4%
31-03-2017 738.00 -4% 681.5 6%
30-04-2017 627.50 -15% 721 6%
31-05-2017 607.50 -3% 695.5 -4%
30-06-2017 723.00 19% 698.5 0%
31-07-2017 664.00 -8% 717 3%
31-08-2017 621.50 -6% 689 -4%
30-09-2017 603.00 -3% 729.5 6%
31-10-2017 626.50 4% 740.5 2%
30-11-2017 675.50 8% 745 1%
31-12-2017 677.50 0% 746.00 0%
Porspective Analysis