This article analyzes the performance gap between Kering and LVMH groups based on ratio calculations and financial statements. It explores the differences in sales, inventory turnover, and profit.
Contribute Materials
Your contribution can guide someone’s learning journey. Share your
documents today.
PROBING THE PERFORMANCE GAP
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
Fixed assets1826 0 1849 9 1848 6 1798 1 4752 2 4022 4 3865 1 3525 2 The ratio calculation above shows a comparison between the two companies that are Kering and LVMH group. It can be seen that the firm sales to cost ratio of both the firm has been evaluated in which itcanbe seen that cost of good sold within the company has decreasedfor boththe firm from the preceding years. Currentlyboth of the companies has the same of amount of cost which they incur in selling one unit of product. The turnover rations of the other handshowthat Kering has a better inventory turnover ratio where LVMG hasbetter- fixedasset turnover. This shows that inventory has been used in the operations of Kering whereas Fixed asset such as plants,machineryandequipmenthave more participation in the operational activitiesofLVMH. The year 2017 for the organisation selected issues considerable differences in the financial statement presented. The financial statement has provided information related to the income statement, balance sheet and other financial information that justify how the organisation have operated in their the financial year. When considering the total gross margin that was provided in income statement we see that the organisation the Kering group have experienced a fall in the gross margin from 2017 from 2016. It is clear that the changes in response to the self of the organisation are quite alarming because the organisation must have operated in somewhat non-expressible manner. The sales for the organisation LVMH for the year ending 2014 is 30638 which when compared to that of Kerring we see a huge difference. The sales amount for the organisation LVMH for the ending 2017 is 42636 which is higher than compared to 15478 of Kerring Group in 2017. The year 2016 for the organisation Kering Group shows 12385 of Total sales which are again less than that of the total revenue of LVMH in 2016. The different approach of selling the product by the organisation selected resulted in the differences of total sales for every Year from 2014 till 2017. The considerable amount of changes that the sales value can justify says that the Kerring group sufficed the requirement of the employees through compensation plan but did not work along with the requirement of the products that could help in increasing the sales from 2014 till 2017 as that of LVMH.The concerning factor regarding the changes in marketing structure and sales alignment also hampered the sales value of the organisation the Kerring group from 2014 till 2017.
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
2. Insight on the profit and changes In response to the concerning profit as mentioned in the case study, we understand that there has been acquisition by the organisation the Kering Group. The value of the deposition from the year 1999 till 2017 has directly impacted the profit. The prophet value of the organisation has started changing from 1999 with an acquisition of 42% of Gucci group which letter increasesto 100%. Considerable value in the sales of printeps printed and acquisition of Puman by 62% in 2006 and 2007 respectively have hugely boosted the profit.The divestment presented by the organisation in terms of Fnac in the year 2012 presented a concerning factor to the organisation overall development. The availability of profit within the organisation was not a present table in terms of a stronger unit since there were completed with proper organisational operation management.Theconcerning factor of the organisation as per the case study is also directed towards the acquisition of Cobra and Volcom which includes sports material andequipment. Which joint venture with Yoonx in online sales for the luxury brand has also boosted the profit securing position of the organisation. Repositioning of the ownership of Gucci increment to 99.4% in 2004, did have a positive impact over the profit. However, the sale of facet and Rexel made critical times for the earning of profit in a fluent manner. From the above analysis, we can now justify that the changes in the managerial group and the ideas for the organisation the Kering Group have been the Prime result for the alarming situation of traffic in some of the Year passed. The concerning Fact and inside gathered is that the organisation from your 2014 to 2017 have stabilizer operation which can be justified with the increasing growth of sales value but not as fast as that of LMVH which could have been possible if there were no instability from the year 1999 to 2012.