Financial Analysis Report: Assessing Noni Limited's Performance

This report provides a comprehensive financial analysis of Noni Limited, an Australian-based fashion company. The analysis focuses on key financial statements, including the balance sheet and income statement, identifying crucial accounts like cash, long-term liabilities, sales, and cost of expenses. The report delves into ratio analysis, evaluating liquidity (current and quick ratios), profitability (net profit margin and asset turnover), solvency (debt-to-equity and debt-to-total assets), and market value ratios (earnings per share and P/E ratio). The analysis compares Noni Limited's performance over time and against industry benchmarks, highlighting areas of strength and weakness, and offering insights into the company's overall financial health and market attractiveness. The report also includes references to the sources used for the analysis.

Running Head: ACCOUNTING FINANCIAL ANALYSIS 1
ACCOUNTING FINANCIAL ANALYSIS

ACCOUNTING FINANCIAL ANALYSIS 2
Table of Contents
Noni Limited Overview...............................................................................................................................3
Two Accounts Selection: Balance Sheet.....................................................................................................3
Two Accounts Selection: Income Statement...............................................................................................3
Analysis of Ratios.......................................................................................................................................4
Liquidity..................................................................................................................................................4
Profitability..............................................................................................................................................4
Solvency..................................................................................................................................................4
Market value ratios..................................................................................................................................5
References...................................................................................................................................................6

ACCOUNTING FINANCIAL ANALYSIS 3
Noni Limited Overview
NONI B Limited is an Australian based company which is best known for the women fashion
and apparels. The company sells its product by the way of the national boutique and stores under
the name Noni B limited. Currently the company has 213 stores and covers every state and
territory. It offers various types of dresses such as day dresses, evening dresses, maxi dresses,
prints dresses, outwear such as T-shirts, shirts, jackets, coats and shrugs. Currently the company
is operating at the revenue of $311 and $369. The net income on the other hand has been $34.25
for the current year 2018.
Two Accounts Selection: Balance Sheet
The two accounts that are of utmost importance in the balance sheet are the cash and the long
term liabilities. The entire position of the company is dependent on these two factors as the
liquidity position of the company can be determined easily. The cash of the Noni B Limited is
58.7 in the current year and in terms of the vertical analysis saw an increase by 25% over 16%
from the previous year1. The cash determines the entire position of how well the company will be
able to pay the liabilities. The second account is the long term liabilities that will govern whether
the company is in financial leverage or not. The long term liabilities of the company were 47.57
whereas in the current year the same is 43.55. Therefore these two accounts are the most
important account that is to be considered form the perspective of the balance sheet2.
Two Accounts Selection: Income Statement
The two items that are important in case of the income statement are the value of the sales and
the cost of the expenses. These two accounts are to be handled majorly because the sales volume
is the ultimate reason as the increase in volume will give the higher return to the organizations in
terms of the net profits3. The cost of expenses go parallel in case of the income statement as, cost
of expenses needs immediate review as it can affect the financial performance of the business4.
1 ("Balance Sheet For Noni B Ltd (N2N) From Morningstar.Com" 2019)
2 (“Staff, Motley” 2019)
3 ("2 Ways To Analyze An Income Statement" 2019)

ACCOUNTING FINANCIAL ANALYSIS 4
Analysis of Ratios
The ratio analysis of the Noni B limited, have been carried out and the overall analysis is
presented below the category wise.
Liquidity
The liquidity ratios include the current as well as the quick ratio which determines how well the
company is able to take cash from the receivables and pay back the creditors. The current ratio is
0.87 and it increased to 1.33 in the year 2018, whereas the quick ratio is 0.46 and it increased to
0.78. This suggests that though the company is moving in the positive direction yet it is way far
from the benchmark of the industry5. The liquidity ratios of SFG are sounder than the Noni B
limited in terms of the current ratio being 4.11 and the quick ratio being 2.11.
Profitability
The profitability of the company is determined by the net profit margin and the Asset turnover
ratio. The net profit margin has increased from 5% to 9% and the asset turnover ratio decreased
from 1.72 to 1.56 and this determines the fact that at one point the company is performing sound
that the margins are increased and on the other hand the assets were being utilized efficiently in
the earlier stages, however now it reduced to 1.56 which can be improved by getting rid of the
obsolete nature assets6. The profitability of the company is 31% and 29% respectively in
comparison to Noni B limited which indicates that the company is not able to make enough
margin and needs to buckle up to be in the competition.
Solvency
The solvency of the company is reflected via, debt to equity as well as the debt to the total assets
and this in fact can be observed from the overall analysis that the debt to equity ratio was 1.89 in
the earlier years whereas the same saw a fell and it reached to 1.15. This reflects that the
solvency position of the company has improved a bit. The debt to total assets on the other hand
has also reduced due to the reduction in the long term liabilities by 8%. This indicates the
4 ("Income Statement For Noni B Ltd (N2N) From Morningstar.Com" 2019)
5 ("2017 Annual Report - Noni B" 2019)
6 ("Ratio Analysis" 2019)

ACCOUNTING FINANCIAL ANALYSIS 5
company is working on the positive upfront. The solvency is very low in case of SFG as the debt
to equity ratio is 0.22 and 0.19, whereas the Asset turnover ratio is 1.17 and 1.35 respectively.
Market value ratios
The market value ratios are also calculated to determine the market attractiveness of the
company. The earnings per share and the P/E ratio are calculated for the purpose of this scenario.
The earning per share of the company is 0.23 and it increased to 0.32 and the P/E ratio on the
other hand decreased from 49.59 to 36.27. This indicates the company has the mixed results and
therefore the overall performance of the company is favorable7. The market value ratio of the
SFG on the other hand suggests that the EPS is 0.53 and 0.58 higher than the Noni B Limited,
whereas the P/E ratio is 23.36 and 21.53 in the year 2018 respectively. Overall SFG is
performing well then the Noni B limited.
7 ("2017 Annual Report - Noni B" 2019)

ACCOUNTING FINANCIAL ANALYSIS 6
References
"2 Ways To Analyze An Income Statement". 2019. Business Insider.
https://www.businessinsider.com/horizontal-and-vertical-analysis-of-income-statements-2017-3?
IR=T.
"2017 Annual Report - Noni B". 2019. Nonib.Com.Au. https://www.nonib.com.au/2017-annual-
report.
"Balance Sheet For Noni B Ltd (N2N) From Morningstar.Com".
2019. Financials.Morningstar.Com. http://financials.morningstar.com/balance-sheet/bs.html?
t=XBER:N2N&region=deu&culture=en-US.
"Income Statement For Noni B Ltd (N2N) From Morningstar.Com".
2019. Financials.Morningstar.Com. http://financials.morningstar.com/income-statement/is.html?
t=XBER:N2N&region=deu&culture=en-US.
"Ratio Analysis". 2019. Zenwealth.Com.
http://www.zenwealth.com/businessfinanceonline/RA/RatioAnalysis.html.
Staff, Motley. 2019. "How To Interpret The Vertical Analysis Of A Balance Sheet And Income
Statement -- The Motley Fool". The Motley Fool. https://www.fool.com/knowledge-center/how-
to-interpret-the-vertical-analysis-of-a-balanc.aspx.