Financial Ratio Analysis

The assignment presents a set of calculated financial ratios for a company across different categories. These include liquidity ratios such as the cash ratio, current ratio, quick ratio, receivable turnover, and inventory turnover. Additionally, it covers solvency ratios like times interest earned, cash coverage ratio, and debt-to-equity ratio. Finally, market-based ratios such as price/earnings ratio and dividend yield ratio are also included.

RUNNING HEAD: Financial analysis of Company
1
Name of the student-
Topic - Financial analysis of Company
University name-

Financial analysis of Company 2
Executive summary
This report is prepared with a view to analysis the financial problems and financial
decision making process of the investors. There are several financial tools such as ratio analysis,
capital budgeting tools, NPV, IRR and bottom up analysis. These financial tools are used to
evaluate the financial problems and identify the best suitable course of action to make effective
use of resources. It is evaluated that if company wants to discontinue its business then it should
consider all the internal and external factors such as its opportunity cost, investment capital and
loss to the organization. This report has reflected how organization should take investment
decision to create value on the invested capital. In addition to this, another part of the report
divulges the key financial performance of JB Hi-Fi Company throughout the time. It will give
brief idea to investors about how they could create value on their investment if they invest their
money in JB Hi-Fi Company.

Financial analysis of Company 3
Table of Contents
Executive summary............................................................................................................2
Introduction.......................................................................................................................4
Question-1......................................................................................................................... 5
Answer to question no-a................................................................................................5
Answer to question- b....................................................................................................7
Question no-2.................................................................................................................... 9
Introduction.......................................................................................................................9
Present description of company........................................................................................9
Financial analysis of the JB HI-FI company...................................................................10
Recommendation.........................................................................................................16
Finding and conclusion.................................................................................................17
References....................................................................................................................... 19
Appendix.......................................................................................................................... 22

Financial analysis of Company 4
Introduction
With the ramified economic changes and complex business structure, each and every
organization is making effective efforts to increase their overall earning. It is considered that
investors are more inclined towards investing their capital in company which provides short term
and long terms benefit to them at large. In the first part of the report, costing methods and
decision making to continue or discontinue particular project has been taken into consideration.
It is evaluated that management is in the mist to decide whether continued losses shown by the
round trampolines and wants a recommendation as to whether or not the line should be
discontinued. Therefore, costing technique has been used to make effective decision making. It
is evaluated that if company could gauge the possibility of short term and long term debts then it
will increase the overall productivity and earning of company. In addition to this, continue and
discontinue of the business is totally depends upon the contribution margin of company. If
company is having positive contribution margin in its value chain activities then it should surely
continue its business operation even if it is showing negative output in its business. The second
part of the report is based on the financial analysis of the business functioning of company. This
report has reflected the key understanding on the financial analysis of the company. In this
report, financial analysis tools such as Ratio analysis, top down analysis and bottom up analysis
have been used to gauge the performance of company. This part of the report is based on the
company name JB HI FI Company. It is the listed company running its business on international
level. It is considered that if investors want to make create value on his investment capital then
they needs to invest their money in value created company.

Financial analysis of Company 5
Question-1
Answer to question no-a
In this part of the question, there are following points are undertaken which are given as below
 All the production fixed cost has been allocated in different department on the basis of
sales.
 If production of round trampolines is stopped then equipment engaged in this will be of
no use.
 If production of round trampolines is stopped then there will be saving of line
supervisor’s salary.
 Company has no other use of these assets and working capacity to produce other
things. Therefore, it will be loss for the business if they discontinue production of round
trampolines.
These are the above factor which needs to be taken into consideration while undertaking
the production. After evaluating the various factors and key contribution factors in this part, it
is considered that round trampolines production is not profitable and not creating value for the
capital engaged in business. Therefore, it could be determined that management department
should stop the production of round trampolines at large. If management department of
company consider the other factors such as production capacity, opportunity cost then there
will be following recommendations.

Financial analysis of Company 6
It is considered that if management department will stop the production of round
trampolines then it will result to saving of only line supervisor’s salary. In addition to this,
management department has to bear other losses like general factory overhead, depreciation
and advertisement expenses. Even if, company stops its production of round trampolines, it will
result to loss of 5, 11,000. This is the actual loss and company could save only 19,000 after
discontinue business.
Income/Expenses Total, RM Round, RM Traingular,
RM Square, RM
Sales 1,000,00
0 140,000 500,000 360,000
Less: Variable
expenses -410,000 -60,000 -200,000 -150,000
Contribution margin 590,000 80,000 300,000 210,000
After evaluating the details and data of these round trampolines, it is considered that
contribution margin of company is positive and showing 5, 90,000 amount of profit margin. It
shows that company has high amount of profit from its total sales of round trampolines.
In addition to this, if management department discontinue its business then it will have to
bear the following losses.
Advertising 216,000 41,000 110,000 65000
Depreciation 95,000 20,000 40,000 35,000
Line supervisor’s salary 19,000 6,000 7,000 6,000
Gen. factory overhead* 200,000 28,000 100,000 72,000
Total fixed expenses -
530,000 -95,000 -257,000 -1780000
Less Line supervisor's
salary 19,000 6,000 7,000 6,000
Total loss still face by
company
-
511,000 -101,000 -264,000 -172000

Financial analysis of Company 7
It is evaluated that management department should understand that even if this operation is
discontinue then it will have to face total loss of 5, 11,000 in its business. This business
operation has shown that if company wants to create value on its investment then it should not
discontinue its business operation. The main reason of the same is related to the contribution
margin from its business operation of RM. Company is having positive contribution margin in
tis total RM production that reflects the positive output. This has shown that if investors want
to increase its overall profit and business output then it should run its Total Rm production for
long run otherwise company will have to face destruction in its invested capital.
Now in the end, it could be inferred that manager needs to analyze the others factors of the
business before taking decision of discontinue of business. In this case, management
department should understand that earning contribution margin from the investment is the
valuable for the organization and organization if reduces its business operation then it will
eventually increase the overall cost of the production
Answer to question- b
Recast the above data in a format that would be more usable to management in assessing the
long-term profitability of the various models (Ondraczek, Komendantova, and Patt, 2015).
Income/Expenses 2016 20017 2018 2019
Sales 1,000,00
0 1500000 2000000 2500000
Less: Variable
expenses 410,000 615000 615000 461250
Contribution margin 590,000 885,000 1,385,000 2,038,750
Less: Fixed Expenses 1,060,000 1,060,000 1,060,000
Advertising 216,000 216,000 216,000 216,000
Depreciation 95,000 95,000 95,000 95,000
Line supervisor’s 19,000 19,000 19,000 19,000

Financial analysis of Company 8
salary
Gen. factory
overhead* 200,000 200,000 200,000 200,000
Total fixed expenses 530,000 530,000 530,000 530,000
Net profit 60,000 355,000 855,000 1,508,750
With the help of excel tool, there is following information has been extracted which reflects
that company will increase the sales and will also increase the variable cost at the same. In
addition to this, company should not discontinue its operation. It is considered that with the
increase in its sales company will also increase its profit and loss arise from the round material
will be compensated by the profit earned from other units of organization. This level of
measurement reflects that company or management department should run its RM production
business in long run. However, company might be facing loss in short term but in long run it will
result to saving good amount of profit at large (Yahoo finance, 2017).
This excel tool has been used to measure the profitabiltity of the total RM production of
organization and assumption has been taken that company will increase the sales of its total
RM by 5,00, 000 each year which will surely increase its profitability throughout the time. In
2016 company had profit of $ 60,000 which will increase to 3, 55,000 in 2017 if company
increases its sales by 5, 00,000. Moreover, this profit will increase each year if company will
increase its sales by 500000 each year on consistent basis (Bodie, 2013).

Financial analysis of Company 9
Question no-2
Introduction
Financial analysis is the important step which investors should adopt while making
investment decision in particular company. In this report, JB HI-FI Company has been
undertaken to identify its growth, business performance and financial capacity of company. It is
evaluated that investors need to analyze the financial performance and capital structure of JB Hi-
Fi Company (Vogel, 2014).
Present description of company
It is an Australian and New Zealand Retailers Company selling consumer goods,
specializing in video games, DVD and electronic home appliance, Company is fastest growing
most successful business of its kind. This company has been running its business on international
level. This company has shown high amount of increment of profit in its business functioning
and effective sustainable future (Damodaran, 2016).
Vision of company
The main vision of company is to increase its overall market share to 40% including
domestic and international market with the help of its product differenciation strategies.
Mission of company

Financial analysis of Company 10
The main mission of company is to implement new process system in its business and
customize its products and services for the better satisfaction of clients (JB Hi FI Company
2016).
Value of the company
The main value of company is to increase its production by following ethical means and
create employees oriented value chain activities (Kou, Peng, and Wang, 2014).
Objective of study
This report is prepared to evaluate the financial performance of company and how proper
financial tools could be used to assess the growth and business functioning of company. There
are financial analysis tools such as Ratio analysis, top down analysis and bottom up analysis
have been used that will help reader to identify all the ups and down and trend of company. The
main objective of this study is to learn the key performance measures of company (Gitman,
Juchau and Flanagan, 2015).
Financial analysis of the JB HI-FI company
The Financial analysis of the JB HI-FI company is implemented with a view to analyzing
the business performance and growth trend of company. Ratio analysis has been used to evaluate
the business performance and capital structure of company. However, annual report of company
has shown that company has high profitability and sustainable business practice. In addition to
this, investors should keep his money in JB Hi-Fi Company in long run (Baños-Caballero,
García-Teruel and Martínez-Solano, 2014).
Ratio analysis

Financial analysis of Company 11
This ratio analysis helps in determining the relation between two associated factors of the
financial statement of company and establish interlink between these factors. There are five types
of ratio such as liquidity, efficiency, profitability, investment and debt structure of company.
This ratio analysis will showcase the trend and financial performance of company throughout the
time (Brigham and Ehrhardt, 2013).
Liquidity ratio of company
This ratio reflects company’s ability to pay off its current liabilities with the help of its
current assets. This ratio has shown how well company has maintained its liquidity cash to run
its operating activities in determined approach.
Current ratio
This ratio depicts company’s ability to pay off its current liabilities with the help of its
current assets. Company has maintained effective stable current ratio since last five years with
less fluctuation. In 2013, JB Hi-Fi Company had 1.38 current ratio which increased to 1.32 in
2017. This shows that company has maintained strong current ratio and increased its current
assets (Vernimmen, et al 2014).
Description Formula JB Hi-Fi Limited
2017 2016 2015 2014 2013
Current ratio
Current
assets/current
liabilities
1.3
2
1.5
7
1.6
2
1.6
4
1.2
8
Quick Ratio
Current assets-
Inventory/current
liabilities
0.3
5
0.3
5
0.3
6
0.3
4
0.3
1

Financial analysis of Company 12
Quick ratio- This ratio divulges company’s ability to pay off its current liabilities with the
help of its quick assets. JB Hi-Fi had .31 quick ratios which increased to .35 and shown that
company has increased its investment in keeping more inventory in its value chain activities.
This quick ratio is high as compared to market industry player therefore, investors should
evaluate whether company has establish optimum cash blockage to run its business effectively
(Ehrhardt and Brigham, 2016).
Profitability ratio
This ratio reflects the relation between total turnover and earning of company. It has been
observed that there are following sub ratio which divulges the profitability of company. After
evaluating the net profit shown in the annual report of company, it is evaluated that company has
stable profitable earning capacity and has increased its overall turnover throughout the time. The
main considered point of profitability ratio is that company has maintained stable profitability in
it business (Duchin and Sosyura, 2014)
Return on equity- In this ratio, return available to equity shareholders and total revenue of
company has been considered (Bloomberg, 2017). Company has decreased its return on equity to
.030 returns on equity in 2017 as compared to .035 data shown in 2013. It reflects that company
has decreased its efficiency to earn profit. It is further observed that company is not paying much
interest on its debts which resulted to availability of dividend to shareholders (Zhu, 2014).
Return on assets- It establishes the relation between return earned by company and assets
investment. It has shown that company has decreased its return on assets from .47 to .201 in
2017 since last five years. This level of decrease in its net profit has shown that company
reduced its earning throughout the time and resulted to non-effective business. In addition to this,

Financial analysis of Company 13
it will also decrease the overall return on capital employed by the company (Ongore. and Kusa,
2013).
Description Formula JB Hi-Fi Limited
2017 2016 2015 2014 2013
Profitability
Return on equity Net profit/revenues
0.030561
5
0.038442
1
0.037513
7
0.036739
4
0.0350
7
Return on assets Net profit/Equity
0.201405
2
0.375308
6
0.399416
9
0.433898
3
0.4773
7
Financial leverage
EBIT / EBIT -
Interest
1.042801
6
1.018433
2
1.030769
2
1.049450
5
1.0595
2
Asset turnover
total assets / total
sales *365 159.0876
91.66540
2
89.45098
6
90.09758
9
93.015
4
Earnings per share
Net income – pref.
div / shares
outstanding
0.391799
5
3.102040
8
2.403508
8
2.206896
6
1.8412
7
Financial leverage ratio- This ratio has shown how company could cover its fixed interest
expenses from its earning. Company has maintained stable interest coverage ratio of 1.04 since
last five years. It reflects company’s standards financial planning to reduce the overall financial
leverage. This leverage ratio reflects that company should decrease its debt structure to reduce
the interest payment to increase its sustainability (Bloomberg, 2017).
Earnings per share- It reflects relation between earning net income earned and equity share of
company. Company has shown downfall in its earning per share from 1.84 to .39 since last five
years. However, in 2016, JB Hi-Fi had good amount of earning per share of 3.1 which decreased
to .39 in 2017 (Flannery, 2016).
Efficiency ratio of JB Hi-Fi Company

Financial analysis of Company 14
Receivable turnover ratio- This ratio reflects how well company has been maintained 29.31 in
2017. It has increased its receivable turnover by 2 points since last five years. This shows that
company has reduced its investment in operating capital in and increased its return on capital
employed. Company needs to maintain effective receivable turnover with a view to reduce its
cash blockage and increase the overall productivity in determined approach (Evans and Mathur,
2014).

Financial analysis of Company 15
Description Formula JB Hi-Fi Limited
2017 2016 2015 2014 2013
Receivable turnover
Receivables/ Total
sales*365
29.3
1
36.0
2
33.0
3
30.1
3
27.7
1
Inventory turnover
Inventory / cost of
goods sold *365
71.3
7
64.5
2
61.2
6
61.0
3
59.5
7
Inventory turnover- This ratio reflects the relation between total cost of goods sold and
average inventory of JB Hi- Fi Company. It has increased its inventory turnover by 12 points in
2017 as compared to last five year data. This has shown how company has increased its overall
inventory efficiency by reducing overall cost of capital and increasing the rotation of the same in
business (Lundholm, and Sloan, 2013).
Capital structure of company
It is evaluated that JB Hi-Fi Company has maintained highly effective interest coverage ratio of
24.36 in 2017 which is 7% high as compared to last five years data. It has shown how interest
payment of company is covered from the earning of the company. This capital structure of
company reflects that company has maintained effective capital structure and company needs to
evaluate all the possible pros and cons while maintain high debt potion in its business. The
capital structure of company should be like that it could increase the overall return on capital and
employed and financial leverage at large. It is further observed that JB Hi-Fi Company should
have arranged all of its finance in stable manner. In order to maintain its financial leverage, it
should reduce its debt portion by 3 points which will reduce the financial risk and increase the
overall return on capital employed at large (Altman, 2008).
Description Formula JB Hi-Fi Limited
2017 2016 2015 2014 2013
Times interest EBIT / Interest 24.36363 55.25 33.5 21.22222 17.8

Financial analysis of Company 16
earned expenses 6 2
Cash coverage ratio
EBIT + non-cash
expenses / interest
expenses
269.0
0
222.0
0
202.0
0
192.0
0
179.0
0
Debt to Equity Ratio Debt/ Equity
1.8
7
1.4
5
1.6
1
1.9
2
2.4
7
Debt to equity ratio- This ratio reflects how well company has managed its debt to equity. It has
divulged that company has decreased its debt to equity by increasing its equity partition and
decreasing its debt portion in its capital structure. This will reduce the financial leverage and
increase the overall cost of capital of company. Therefore, it could be inferred that if company
wants to maintain effective business functioning in this sluggish market condition then it will
have to maintain optimum capital structure. Ideally, company cannot determine the optimum
capital structure but it should be like debt portion equal to 30 % of the total capital and 70% part
of the capital should be consist of equity capital (Demirgüç-Kunt and Maksimovic, 2008).
Recommendation
There are several points to consider in the business functioning of JB Hi-Fi which
showcase the profitability and value creation opportunity for investors. It is considered that JB
Hi-Fi Company has shown stable growth and if investors want to invest their money in JB Hi-Fi
business functioning then they should consider their investment in long run. In addition to this,
sluggish market condition and increasing competition in these technologies filed, company,
investors needs to analyze the business performance of industry and how far company has made
positive efforts in its business. This has shown that if investors who could invest their capital in
JB Hi-Fi company then they should invest for long run only. If they invest their money in short
run then it will surely result to no increment in the investment of their invested capital. In

Financial analysis of Company 17
addition to this, investment for long term in JB Hi-Fi will help investors to increase the value of
their invested capital (Gupta, 2009).
Finding and conclusion
After evaluating the annual report and financial statement of company, it is considered
that company has not made much change in its financial performance and maintained stable
business performance; there are no such changes in the financial performance of company and
shown overall stable earning. For instance, total revenue of JB Hi-Fi has increased by 70% in last
five years. In 2017 company had AUD $ 5628 million investment which is 70% more as
compared to total turnover of company in 2013. In addition to this, if investors want to earn
return on investment then they should invest their money in long run. JB Hi-Fi has adopted
sustainable business practice in which it has planned to increase its overall turnover and earning
slowly throughout the time. Company has been facing problems and issues while introducing
new technologies and customization of its products and services in its business (Dalen, Kuzey,
and Uyar, 2013). Company has also followed LIFO method in its inventory management which
reduces the overall cost of capital and increase the efficiency of business. In addition to this, ratio
analysis of JB Hi-Fi has shown that company has increased its overall turnover and earning
throughout the time. Company has also reduced its debt to equity capital with a view to face
sluggish market condition. The investment decision of investors should be based on the data
collected through ratio analysis, top down analysis and other financial tools. Investment in JB
Hi-Fi should be for long run if investors want to create value on their investment. Company has
shown very slight increment in its overall earning but in long run company will divulge high
value creation to its shareholders. Therefore, investors who could keep their money looked in for

Financial analysis of Company 18
longer time period in JB Hi-Fi Company then it will help them to create value on their
investment capital (Damodaran, 2016).
JB HI FI LTD (JBH) Cash flow of INCOME STATEMENT
Fiscal year ends in June. AUD in millions except per
share data.
2017
-06
2016
-06
2015
-06
2014
-06
2013
-06
Revenue 5628 3954 3652 3484 3308
In addition to this, cash flow from operating financial, investment activities and financial
activities of JB Hi-Fi Company has shown that company has increased the value of the
investment. Furthermore, it is evaluated that investors should invest their capital only after 2020
in JB Hi-Fi for the short term purpose; the trend analysis on the financial performance of JB Hi-
Fi has shown that company will be having high increment in its total turnover. Now in the end,
it could be inferred that if company could increase the overall production and reduce the overall
effectiveness of the business. It will increase the overall functioning and productivity of the
organization. Now in the end, it could be inferred that if CEO wants to invest capital in JB Hi-Fi
then it should invest his money for long run. Investment for short term purpose in JB Hi-Fi will
destruct the value of the investors.

Financial analysis of Company 19
References
Altman, E.I., 2008. Financial ratios, discriminant analysis and the prediction of corporate
bankruptcy. The journal of finance, 23(4), pp.589-609.
Baños-Caballero, S., García-Teruel, P.J. and Martínez-Solano, P., 2014. Working capital
management, corporate performance, and financial constraints. Journal of Business
Research, 67(3), pp.332-338.
Bloomberg, 2017 retrieved on 16th October, 2017 from www.bloomberg.com.au
Bloomberg, 2017, government security retrieved on 16th October, 2017
https://www.bloomberg.com/markets/rates-bonds/government-bonds/australia
Bodie, Z., 2013. Investments. McGraw-Hill.
Brigham, E.F. and Ehrhardt, M.C., 2013. Financial management: Theory & practice. Cengage
Learning.
Damodaran, A., 2016. Damodaran on valuation: security analysis for investment and corporate
finance (Vol. 324). John Wiley & Sons.
Damodaran, A., 2016. Damodaran on valuation: security analysis for investment and corporate
finance (Vol. 324). John Wiley & Sons.
Delen, D., Kuzey, C. and Uyar, A., 2013. Measuring firm performance using financial ratios: A
decision tree approach. Expert Systems with Applications, 40(10), pp.3970-3983.

Financial analysis of Company 20
Demirgüç-Kunt, A. and Maksimovic, V., 2008. Law, finance, and firm growth. The Journal of
Finance, 53(6), pp.2107-2137.
Duchin, R. and Sosyura, D., 2014. Safer ratios, riskier portfolios: Banks׳ response to government
aid. Journal of Financial Economics, 113(1), pp.1-28.
Ehrhardt, M.C. and Brigham, E.F., 2016. Corporate finance: A focused approach. Cengage
learning.
Evans, J.R. and Mathur, A., 2014. Retailing and the period leading up to the Great Recession: a
model and a 25-year financial ratio analysis of US retailing. The International Review of Retail,
Distribution and Consumer Research, 24(1), pp.30-58.
Flannery, M.J., 2016. Stabilizing large financial institutions with contingent capital
certificates. Quarterly Journal of Finance, 6(02), p.1650006.
Gitman, L.J., Juchau, R. and Flanagan, J., 2015. Principles of managerial finance. Pearson
Higher Education AU.
Gupta, M.C., 2009. The effect of size, growth, and industry on the financial structure of
manufacturing companies. The Journal of Finance, 24(3), pp.517-529.
JB Hi FI Company 2016, annual report, retrieved on 25th October, 2017 from
https://www.jbhifi.com.au/Documents/2017%20Annual%20Report.pdf
Kou, G., Peng, Y. and Wang, G., 2014. Evaluation of clustering algorithms for financial risk
analysis using MCDM methods. Information Sciences, 275, pp.1-12.

Financial analysis of Company 21
Lundholm, R.J. and Sloan, R.G., 2013. Equity valuation and analysis with eVal. McGraw-Hill
Irwin.
Ondraczek, J., Komendantova, N. and Patt, A., 2015. WACC the dog: The effect of financing
costs on the levelized cost of solar PV power. Renewable Energy, 75, pp.888-898.
Ongore, V.O. and Kusa, G.B., 2013. Determinants of financial performance of commercial banks
in Kenya. International Journal of Economics and Financial Issues, 3(1), p.237.
Vernimmen, P., Quiry, P., Dallocchio, M., Le Fur, Y. and Salvi, A., 2014. Corporate finance:
theory and practice. John Wiley & Sons.
Vogel, H.L., 2014. Entertainment industry economics: A guide for financial analysis. Cambridge
University Press.
Yahoo finance, 2017 retrieved on 16th October, 2017 from https://in.finance.yahoo.com/
Zhu, J., 2014. Quantitative models for performance evaluation and benchmarking: data
envelopment analysis with spreadsheets (Vol. 213). Springer.

Financial analysis of Company 22
Appendix
Computation of investmetn of mangement
Income/Expenses Total,
RM Round, RM Traingular,
RM Square,RM
Sales 1,000,00
0 140,000 500,000 360,000
Less: Variable expenses -410,000 -60,000 -200,000 -150,000
Contribution margin 590,000 80,000 300,000 210,000
Less: Fixed Expenses
Advertising 216,000 41,000 110,000 65000
Depreciation 95,000 20,000 40,000 35,000
Line supervisor’s salary 19,000 6,000 7,000 6,000
Gen. factory overhead* 200,000 28,000 100,000 72,000
Total fixed expenses -530,000 -95,000 -257,000 178000
Less Line supervisor's
salary 19,000 6,000 7,000 6,000
Total loss still face by
company -549,000 -101,000 -264,000 172,000
Income/Expenses 2016 2017 2018 2019
Sales 1,000,00
0 1500000 2000000 2500000
Less: Variable expenses 410,000 615000 615000 461250
Contribution margin 590,000 885,000 1,385,000 2,038,750
Less: Fixed Expenses 1,060,000 1,060,000 1,060,000
Advertising 216,000 216,000 216,000 216,000
Depreciation 95,000 95,000 95,000 95,000
Line supervisor’s salary 19,000 19,000 19,000 19,000
Gen. factory overhead* 200,000 200,000 200,000 200,000
Total fixed expenses 530,000 530,000 530,000 530,000
Net profit 60,000 355,000 855,000 1,508,750

Financial analysis of Company 23
Computation of financial data
Details (JB HI_FI financial data AUD $ in million)
2017 2016 2015 2014 2013
Total
revenue 5628 3954 3652 3484 3308
Cost of
goods sold 4398 3089 2854 2745 2610
Gross profit 1230 865 798 739 698
Operating
profit 268 221 201 191 178
Net profit 172 152 137 128 116
Interest 11 4 6 9 10
Inventory 860 546 479 459 426
Current
assets 1171 703 617 578 564
Cash and
cash
equivalents 73 52 49 43 67
Receivables 197 98 81 71 64
Current
liabilities 886 447 380 352 442
Payables 584 302 254 244 335
Shares
outstadning 439 49 57 58 63
Equity 854 405 343 295 243
Total
liabilities 1599 588 552 565 600
Total assets 2453 993 895 860 843
Market
share price 23.86
Description Formula JB Hi-Fi Limited

Financial analysis of Company 24
2017 2016 2015 2014 2013
Profitabilit
y
Rqturn on
equity Net profit/revenues
0.03056
15
0.03844
21
0.03751
37
0.03673
94
0.035
07
Return on
assets Net profit/Equity
0.20140
52
0.37530
86
0.39941
69
0.43389
83
0.477
37
Financial
leverage EBIT / EBIT - Interest
1.04280
16
1.01843
32
1.03076
92
1.04945
05
1.059
52
Asset
turnover
total assets / total sales
*365
159.087
6
91.6654
02
89.4509
86
90.0975
89
93.01
54
Earkings
per share
Net income - pref div /
shares outstanding
0.39179
95
3.10204
08
2.40350
88
2.20689
66
1.841
27
Liquidity
cash ratio
cash equivalents +
cash / current
liabilities
0.08239
28
0.11633
11
0.12894
74
0.12215
91
0.151
58
Current
ratio
Current assets/current
liabilities 1.32 1.57 1.62 1.64 1.28
Quick Ratio
Current assets-
Inventory/current
liabilities 0.35 0.35 0.36 0.34 0.31
Receivable
turnover
Receivables/ Total
sales*365 29.31 36.02 33.03 30.13 27.71

Financial analysis of Company 25
Inventory
turnover
Inventory / cost of
goods sold *365 71.37 64.52 61.26 61.03 59.57
Market
based
ratios
Price /
earings ratio
Market value per share
/ earnings per share 60.90
Dividend
yield ratio
dividend / current
share price 4.99
Solvency
Times
inteest
earned
EBIT / Interest
expenses
24.3636
36 55.25 33.5
21.2222
22 17.8
Cash
coverage
ratio
EBIT + non cash
expenses / interest
expenses 269.00 222.00 202.00 192.00
179.0
0
Debt to
Equity
Ratio Debt/ Equity 1.87 1.45 1.61 1.92 2.47

Financial analysis of Company 26