Kogan.com Capital Market Research: Share Price and Financial Review

This report presents a capital market research analysis of Kogan.com Ltd., an Australian retail company listed on the ASX. The analysis examines the company's share price fluctuations over the past two years, drawing insights from the historical data. It delves into key elements from Kogan.com's income statement and balance sheet for the financial years 2017 and 2018, providing detailed financial analysis. The report also reviews articles and news releases from the CEO, highlighting business strategies and market positioning. Finally, it offers recommendations based on the company's strengths and weaknesses, culminating in a comprehensive conclusion.

Running head: CAPITAL MARKET RESEARCH
Capital Market Research
Name of the Student
Name of the University
Student Number
Name of the Tutor
Author’s note

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Executive summary
The report aims to present an analysis on Kogan.com Ltd, which is a well-established
company of the retail industry of Australia. The company is listed in Australian Securities
Exchange. The report is structured into different segments in the discussion part. The change
in share prices of the company is analysed for last two years and suitable indications are
drawn from the results. Further the report comments on the particulars presented from the
income statement as well as the balance sheet of the company. The relevant data has been
extracted and suitable analysis has been provided in all the sections. After this the report
discusses about the different articles and news released by the CEO of the company which
summarises some of the business strategies. Finally recommendations are provided stating
the strengths and weaknesses of the company followed by a conclusion.

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Table of Contents
Executive summary....................................................................................................................1
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Overview of the Company.........................................................................................................2
Discussion of share price...........................................................................................................3
Review of general purpose financial report material.................................................................3
Review of the key elements of the balance sheet for Financial years 2017 and 2018...............4
Review of company released articles.........................................................................................5
Review of a news article released about the company...............................................................6
Recommendation........................................................................................................................6
Conclusion..................................................................................................................................7
References..................................................................................................................................8

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Introduction
The report focusses on a detailed discussion of the capital market research about a
corporation which is listed in Australian Securities Exchange. The selection organisation in
this report is Kogan.com LTD. In this report, the detailed analysis of the organisation is
presented by conducting a research on the materials of the organisation. The materials chosen
for this purpose are financial report materials which contain all the relevant financial
statements along with the share price information for the last two years. The other documents
used for this report are media and other relevant sources. It also highlights the different
materials that are released by the company. From all the above sources, the current position,
status, and financial highlights of the company are analysed and suitable recommendations
are provided based on the analysis.
Discussion
Overview of the Company
Kogan.com is a renowned retail company of Australia which is headquartered in
Melbourne. The company has a huge portfolio of business which constitutes of retailing and
other services. The different business segments of the company include retail business,
marketplace, mobile and internet services, insurance businesses, travel and money businesses
(Kogan.com 2019). The company has is efficient in incorporating digitalisation. Currently
due to its efficiency in digitalisation, the company is enjoying a price leadership in the
market. The main focus of the company is to make in-demand products for the customers.
The other objective of the company is to make the services affordable and accessible to the
customers. The company is listed is Australian securities exchange and it has a competitive
range in the market based on its financials and other elements.

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Discussion of share price
The share price highlights of the company for the last two years are presented below.
Considering the historical status the range of the share prices for 52 weeks, it has been
found that the range is from $2.61 to $7.29 (Kogancorporate.com 2019). Considering the
current range of the market prices for a day, it has been found that the range varies from
$4.91 to $5.01. The last traded price of the company currently is $4.95.
This has shown that the share price of the company has increased in recent years. This
has proved to be beneficial for the company as the company can float less amount of shares
in future to raise the same amount of money that they are in need. Through this the company
does not have to dilute the overall shares of the existing shareholders (Marian et al. 2014).
Rise in the price of shares can also signify that the company’s shares has high demand in the
market. This means that the selling stance of the shares is less that the demand stance. This
can prove to be a good signal for the company in the future.
Review of general purpose financial report material
Review of key elements of the income statement for Financial Years 2017 and 2018
Particulars (in million) FY18 FY17 Variance
Revenue 412.3 289.5 42.4%
Cost of sales 331.7 237.8 39.5%
Net profit 14.1 6.7 110.4%
Earnings per share 0.15 0.04 275%
(Source: Kogancorporate.com 2019)

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The above data focusses on the key elements taken from the financial statement of
Kogan.com. The revenue figure has shown an upward trend from Financial Year 2017 to
2018. The rise in sales has been a sharp one from 289.5 to 412.4 millions. This shows that the
company’s performance has been tremendously good in the past 1 year. This can be due to
high rise of demand for company’s services. The cost expenses have also increased in the last
one year but the rise is slightly more. Increase in sales has led to increase in the net profit
margin as well as earnings per share of the company (Mani, Kesavan and Swaminathan
2015).
Review of the key elements of the balance sheet for Financial years 2017 and 2018
Particulars (in million) FY 18 FY 17
Current Assets 99.0 74.4
Total Assets 106.0 80.3
Current Liabilities 57.4 37.6
Total Liabilities 58.2 37.7
(Source: Kogancorporate.com 2019)
The above data is based on the financial report presented by the company for the year
ended at 30th June 2017 and 2018. The data has been extracted from the balance sheet of the
company. The current asset figure shows an upward trend from 74.4 million to 99.0 million
from financial years 2017 to 2018. This has led to increase of total assets from 80.3 millions
to 106.0 millions from Financial years 2017 to 2018. The results show that the company has
acquired enough assets or quick cash in hand which would be required to meet up its short-
term liabilities. Nobanee, H. and Abraham, J., 2015. The liquidity of the company has
increased in the last 1 year. Similarly, the liability figure has shown an increase but the rise

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has not been sharp. But the rise in assets has been able to cope up for the increase in
liabilities.
Review of company released articles
The CEO of the company Ruslan Kogan has shared his opinions related to flourishing
of business and technology through his guest articles which were published by various
leading publications (Vinning 2014). Some of those articles are about giving the best advice
about business ideas, secrets of linking up business in China, growing business without
sacrificing the culture and about the success formula of his retail business which could be
something more than making decent websites.
The article which discussed about the best ideas of business states that the best ideas
at the first hand gets rejected which is obvious (Linkedin.com 2015). Such rejected ideas
could pave way for success of the business. The factor which comes into play at this moment
is persistence. The CEO clearly stated in this article that entrepreneurs with new business
ideas have failure in first stages. This can be due to lack of vision by other people. In this
article he shares stories of McDonald’s Australia, car rental companies and discussions with
Roger Federer in relation to this topic.
The other article discusses about advantages of expanding the business portfolio
through linking up with China. In this article the CEO has discussed about his dealings with
China by which he had learnt many key statements of success in this regard. Some of those
statements are about money which could mitigate the language barrier, dealing directly with
the factory without using any middleman, keeping the competition prominent between
competitors, and having excellent network relationships with China to boost up the business
(Lattemann et al. 2017). Other statements that were significant in his article were constant

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follow up and reminder and giving a priority to the number 8, which has been considered as
the lucky number of the Chinese.
The article about growing business without sacrificing the culture discusses about two
important points. One of such points is to make sure that people are engaged in the right jobs
which would be suitable according to their expertise (Noe et al. 2017). Failure in this factor
could lead to burden or malfunctioning of the business. It is important to ensure that there are
processes to detect underperformed workers and then it could be improved through
collaborative work. Another statement is about encouraging entrepreneurship within the
organisation culture which would be promotion and rewards or recognitions to the top
performers. This similar culture is followed in Kogan.
Review of a news article released about the company
A recent news article has been published about the company which illustrates a sort of
comparative analysis between Amazon and Kogan on their online retail business (Spring
2018). Through this news article it has been predicted that Kogan has identified the online
business strategy way before Amazon was launched in Australia. From this identification the
CEO stated that online shopping would teach people a new way of shopping and a new way
of brand distribution.
Recommendation
Kogan.com is presently the one of the significant companies in the retail industry of
Australia. The financial highlights indicate a promising future for the company in terms of
revenue as well as assets. The share price of the company has increased in the current year
and the range has shifted upwards. This tend to signify greater demands for the company’s
services in the market. Focussing on the weaknesses of the business some of the

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recommendations could be provided like diversification of product line, renovations in the
business model, investment in new technologies and improvement in marketing strategies.
Conclusion
From the above report it can be concluded that Kogan.com currently is in a good state
financially. The particulars of income statement and balance sheet show high liquidity of the
company as well as high demand for its services. Through the news and articles it can be
concluded that the company, though has achieved a good stage, still needs to go a long way
further. Through the suitable recommendations the company could achieve its desired results
and could focus on its long term goals.

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References
Kogan.com 2019. Australia, K.| Australia's Premier Shopping Destination. [online] Kogan
Australia. Available at: kogan.com/au/ [Accessed 31 Jul. 2019].
Kogancorporate.com. 2019. [online] Available at:
kogancorporate.com/document/a9caacf937444d1b88dd7c14d3574c16/KOG0006%20Kogan
%20AR18_PFO2_web.pdf [Accessed 31 Jul. 2019].
Lattemann, C., Alon, I., Spigarelli, F. and Marinova, S.T., 2017. Dynamic embeddedness in
Chinese firm internationalization. Thunderbird International Business Review, 59(4), pp.547-
559.
Linkedin.com. (2015). Best Advice: If Your Ideas Get Rejected, You’re on the Right Track.
[online] Available at: linkedin.com/pulse/best-advice-your-ideas-get-rejected-youre-right-
track-ruslan-kogan?trk=mp-reader-card [Accessed 31 Jul. 2019].
Mani, V., Kesavan, S. and Swaminathan, J.M., 2015. Estimating the impact of understaffing
on sales and profitability in retail stores. Production and Operations Management, 24(2),
pp.201-218.
Marian, L., Chrysochou, P., Krystallis, A. and Thøgersen, J., 2014. The role of price as a
product attribute in the organic food context: An exploration based on actual purchase
data. Food Quality and Preference, 37, pp.52-60.
Nobanee, H. and Abraham, J., 2015. Current assets management of small
enterprises. Journal of Economic Studies, 42(4), pp.549-560.
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2017. Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.

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Spring, A. (2018). Amazon and cheap TVs: Ruslan Kogan on the new world of retail. [online]
the Guardian. Available at:
https://www.theguardian.com/australia-news/2018/jan/05/waiting-amazon-moment-
entrepreneur-change-australian-shopping [Accessed 31 Jul. 2019].
Vinning, B., 2014. Forget physical property it's now all about ideas and intellectual
property. Government News, 34(4), p.551.