Financial Statement Analysis of Dunelm Group Plc

Added on - 21 Jul 2020

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Financial StatementAnalysis
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK...............................................................................................................................................1Analyzing financial performance ofDunelmandHalfordsGroup Plcwith the help of internaland external factors......................................................................................................................1CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................16
INTRODUCTIONFinancial statement analysis is a process undertaken by business unit and its stakeholderswith the motive to evaluate business position as well as performance. Such analysis is highlysignificant which in turn provides high level of assistance to the management team of businessunit in developing strategic and competent framework. Along with this, generation of high returnis the main objective of investors behind making investments. Thus, by making evaluation offinal accounts,investors can decide whether they should invest money in the securities ofconcerned unit or not. The present report is based onDunelm andHalfordsGroup Plc which isone the leading companies that comes under the category of UK retail sector. Dunelm Group Plcis a leading British home furnishing retailer that has approximately 250 stores in the UK. In thisreport, the extent to which financial position of Dunelm is sound over Halfords Group Plcthrough the means of ratio analysis will be analysed.TASKAnalyzing financial performance ofDunelm andHalfordsGroup Plc with the help of internaland external factorsIn order to evaluate the financial aspects and position of Dunelm Group Plc, SWOTanalysis has been conducted to assess both internal as well as external factors. Main reasonsbehind these internal and external factors closely affect the customer base as well as profitabilityof firm.Internal and external analysisSWOT analysis ofDunelm Group PlcInternal analysisStrengthsStrong brand equity and attractivelocationOfferingawide range of homefurnishing products or servicesLargest home ware retailer: One stopshopGives high value for moneyWeaknessesPrices charged by Dunelm is higher ascompared to supermarketPoor merchandising standardsLack of enough spaceExternal analysis
OpportunitiesFocusingon increasing target groupthroughprovidinginnovative productsExpanding network,selectingproductselection and reachingvia establishingflagship storesOpportunities pertaining topersonalized furnishing in line withPrestoThreatsHigh competitionLack of large scale development due tocompetition law (Dunelm Group SWOTAnalysis, USP & Competitors,2017)SWOT analysis ofHalfords Group PlcStrengthsCustomer centric policies and highquality offeringsFree customerdelivery system andonline sales serviceOffering high discountsFree car checks in stores (HalfordsSWOT Analysis, USP & Competitors,2017)WeaknessesFails to expand business outside UKand IrelandDistribution system is limited to UKOpportunitiesMaximization of sales throughimproving post sales customer servicesystemCreation of efficient distribution systemExplore business operations indeveloping countriesThreatsDecline in customer’s demand forbicyclesIntense competitionDecreasing purchasing power ofcustomers due to financial crisisFinancial statement analysisMethodology:To analyze and interpret financial statements,ratio analysis tool has beenselected as well as applied. Such tool assists in summarizing and evaluating the position of firmfrom various perspectives such as profitability, liquidity, solvency, efficiency and investment. Bymaking assessment of all such aspects, one can easily determine whether financial condition ofthe concerned organization is good or not (Fabregat-Sanjuan, Ferrando and De la Flor,2015).Further, by using the tool of ratio analysis,firm can measure performance over the yearsand in against to the rival firms. However, on the critical note, it can be presented thatdifferent
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