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Financial Statement Analysis of Kathmandu Holdings Limited
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Added on 2019-10-30
Financial Statement Analysis of Kathmandu Holdings Limited
Added on 2019-10-30
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FINANCIAL STATEMENT ANALYSIS1
Table of contents1) Brief introduction of Kathmandu Holdings Limited...................................................................32) Identifying the key aspect of the annual report...........................................................................33) Identifying the key directors and analyzing the directors report.................................................44) Defining auditors, their opinion and discussing the summary of auditor's report.......................45) Comparative analysis of sales for the year 2017 and 2016 and explaining the reason behind thechanges............................................................................................................................................56) Discussion on net cash flows of the company.............................................................................67) Discussing the debt and equity structure of the company...........................................................78) Computation of the financial ratios for identifying the financial health of the company...........7Reference list.................................................................................................................................112
1) Brief introduction of Kathmandu Holdings LimitedKathmandu Holding Limited is the professional outdoor wholesaler. It was established in1987.The company is hooked in designing, marketing, wholesaling of clothes and material fortravel and adventure. The company’s sector consists of the country’s like New Zealand,Australia, and the United Kingdom. It offers a range of garments like fleece jacket, waterproofjacket, shirt pants and footwear and socks. It also provides equipment consist of bags, sleepingbag, tents, camping accessories and travel accessories. The company works approximately 110stores in Australia, over 46 stores in New Zealand and approximately 4 in the United Kingdom.The company’s subdivision includes Kathmandu (U.K) Limited, Kathmandu Ply Limited,Kathmandu Limited, and Milford Group Holding Limited (www.kathmanduholdings.com,2017).2) Identifying the key aspect of the annual reportAnnual report of any company includes all the relevant and compulsory information for the users(both internal and external) of the report. The annual report specifically includes, directorsreport, interim report, media announcement, strategic performance report, etc. However, theinterim report is the most dominating section of the annual report, followed by the director’sreport and media announcement (Zadek et al. 2013).Similarly, interim report is the most dominating section of the annual report of KathmanduHoldings Limited. Financial statement and Auditor's report are the most significant part of it,since it brings material and required information for the users of the report. Here it has beenfound that the PWC has audited the financial statement of the company, stating that the companyhas followed the guidelines of AASB and the statement is showing true and fair view (de Villierset al. 2014).The report has made individually to the company’s shareholder. The audit work has beentackled so that it might shape to the company’s shareholders the matter which are required tostate to the shareholders for the review report and for no other desire. To the fullest extensionallowed by the law, the company do not accept or guess the duty anyone other than theshareholder. 3
3) Identifying the key directors and analyzing the directors reportThe director is the prime of the organization, they are either appointed or elected, who mostlyhas the power and duties link to administration and management (Cassim, 2016). The three-significant director of this company are David Kirk, Xavier Simonet and John Harvey.The directors report analysis that majority of Kathmandu’s year ended sale are obtained fromthree major sales promotions each year appearing in the part of the months of March and April(Autumn), June and July (Winter) and December and January (Christmas). Among these threedevelopments the Largest sales is Winter sale and the remaining two sales occur in the secondhalf of the financial year. As the outcome, in the second half of every financial year the largestproportion of the Kathmandu sales and EBITDA is obtained. However, the fee structure of thedirectors is represented below in a diagram.Figure 1: Directors remuneration(source: www.kathmanduholdings.com, 2017)4) Defining auditors, their opinion and discussing the summary of auditor'sreportAuditor is someone who is responsible for calculating the validity and security of a company's ormanagement’s financial statements (Tang et al. 2017). The only financial statement which was occurred by the Group that are estimated at the fair valueare over the counter derivatives. These derivatives have all been resolve to be in the level two ofthe fair value position. As all the powerful inputs are needed to find out the fair value of thesederivatives. Pwc has audited the financial statements of the company and found that the reporthas been prepared in relationship with group interest and accounting guidelines. Thus, theAccounting firm, Pwc has given unqualified report. The report is individually made to thecompany’s shareholder as a body (Christ et al. 2015). The audit work has been so that it mightstate to the company’s shareholder, the matter which are required to state to the shareholder for4
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