Financial Performance Analysis of Harvey Norman Holdings Limited

REPORT

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
MAIN BODY...................................................................................................................................3
1. About the company and the industry in which this operates..................................................3
2. Evaluation of financial performance of above company on the basis of ratio analysis..........3
3. Valuation of above company's assets. ....................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

EXECUTIVE SUMMARY
The project report summarise about the analysis of financial performance of Harvey
Norman Holdings limited. Under the report, different types of ratios are calculated and
interpreted in order to assess efficiency of above company. The ratios which are computed are
current ratio, debt and interest earned ratio. In the end part of report, valuation of financial assets
of above company is done in an effective manner.
MAIN BODY
1. About the company and the industry in which this operates.
Overview of company – The Harvey Norman Holdings limited is a holding company for other
entities and operates in a 3rd party agreement. Basically, the it is based on international business
of furniture, bedding and many electronic products. This company has its headquarter in New
south Wales, Australia. It was founded by Gerry Harvey and Ian Norman in year 1982. As
accordance of financial year 2016, their net income was of $349 million and overall revenue was
of $5.3 billion in Australia (About over view of company, 2019.). This indicates that company is
performing very well in the context of generating revenues.
Industry in which the company operates – The company operates in the industry of computer,
electronic, furniture and bedding goods. They have large number of product portfolio in order to
provide needed products by their customers. There are about 194 Australian franchised
companies and 86 overseas companies.
2. Evaluation of financial performance of above company on the basis of ratio analysis.
Ratio analysis- It can be defined as type of technique that is used for making proper financial
analysis of companies. Under this method, vital range of ratios are calculated and interpreted. In
the context of above Harvey Norman Holdings limited company below mentioned ratios are
interpreted for assessing their overall performance :
 Current ratio = It is a type of ratio which is calculated in order to assess the liquidity
position of companies (Dehnavi, Aghdam, Pradhan & Varzandeh, 2015). This ratio
shows the relation between current assets and current liabilities. The ideal ratio is of 2:1.
Herein, below formula of computing current ratio is mentioned in such manner: