Elisa Guimaraes Francisco _ FRA09298346 Le Ngoc Thuan Nguyen _ NG 0929939!
09"09"2009
E#ecu$i%e &ummary
The report on Billabong Corporate provides an analysis of the company’s performance for the past 3 years, which gives insights into its sales trends, profitability, and also the shortcomings in its operation. The financial reports of this period of time, obtained from the annual publishment, are exploited in terms of three different functions in the corporate: perating, !inancing, and "nvesting activities. The #ey ratios as well as the changes in assets, profits, and debts are examined under the light of those activities. The company is a well developed one during the period with a large number of investment capital has been generated. $ffectiveness has been proved to be %uite steady& however, with the ac%uiring new assets of long term value, efficiency should be focused as to utilise in the next few year.
2
Ta'le o( )on$en$s
Executive Summary.......................................................................................................2 Business Overview.........................................................................................................4 Operating Activities.......................................................................................................5 Sales, Cost and ro!it "rends.....................................................................................5 Assets.........................................................................................................................# Accounts receiva$le...................................................................................................% &nventory....................................................................................................................% &nterest expense..........................................................................................................' (inancing activities.......................................................................................................)* +eturn on E,uity and +eturn on Assets...................................................................)* Capital Structure.......................................................................................................)) &nvesting activities........................................................................................................)2 C-anging o! non.current assets................................................................................)2 +eturn on Assets.......................................................................................................)/ Conclusion and +ecommendations..............................................................................)4 +e!erences....................................................................................................................)5 Appendix )...................................................................................................................)# Appendix 2...................................................................................................................)0
/
*usiness +%er%ie,
Billabong Corporate is an 'ustralian company with the core business on apparel, accessories, eyewear, and wetsuits in the board sports industry. (nder the corporate different brand names are utilised for different types of product lines, which diversifies and matches the company to different needs of the mar#et. The company first started in )old Coast in *+,3, experienced a %uic# expansion in the national surfing industry, and reached the outside world from the late *+-.s. /ater on, Billabong entered the boardsports with the new lines of s#ate and snow products. !or the period of more than 3. years, Billabong corporate has managed to be well founded with the distribution of a channel in more than *.. countries with approximately *.... outlets worldwide, including specialised boardsports retailers and its own retail stores.
4
+-era$ing Ac$i%i$ies
The operating activities involve all movements related to ac%uire and sell the business goods and services. 0evenues and expenses are the amounts the company expects to receive and consume in the selling process, conse%uently are the main contents of operating analysis. Sales, Cost and Profit Trends 's the financial reports informed, sales, profit and cost trends of the years 1..2, 1.., and 1..- increased 3'ppendix *4, although the ability to create profit from its sales decreased in 56 1..2 to 1.., and 5.76 1.., to 1..-, reducing earns in each dollar of the net profit.
!igure *. 8et profit margin ratios
!igure 1. )ross profit margin ratios
5
)ross profit margin increased among 1.., to 1..-, which meant the efficiency in the manufacturing and effectiveness converting merchandise to sales was improved, while it was mostly maintained between 1..2 and 1..,, with a low decrease converting the percentage to money. "n 1.., Billabong has the best performance in cost control comparing gross profit margin and net profit with the other years 3'ppendix *4. "t reveals that the decrease in net profit margin was not caused by a lac# in controlling the goods’ cost. movements of benefits. 'nalysing the efficiency Billabong had in controlling operating expenditures, other than cost of goods, the operating profit margin decreased. "t shows the impact operating profit margin caused in net profit results. The operating costs had *26 lac# of control among 1..2 to 1.., and few decrease in 1.., to 1..-.
!igure 3. perating profit margin
ther possibility for these results is exchange
Assets "n order to analyse the company performance in generating sales from their investments in assets we can verify the assets turnover. "n the first period 31..2 to 1..,4 the assets were well used, with an increase of -6 through year. 9owever, in the second period 31.., to 1..-4 it dropped 26, depicting that for each dollar spent on assets the amount of sales were less. This trend must change to a maintaining or increasing ratios for a long:term stability. #
!igure 5. 'ssets turnover
The operating performance in converting the profit received by assets in cash is measured in accrual and cash flow comparisons. The percentages were +6, ,6 and +6 for each year respectively 31..-, 1.., and 1..24. "t means that although the investments in assets increased each year, the cash generation decreased then increased in lower levels. !or each dollar invested , and + cents were received in cash. The return on assets e%uation is applicable to discover, in general, if Billabong has been controlling their costs and use of resources based on sales. The results for each year are: 1..2 ; *16, 1.., ; *16 and 1..- ; **6. The difference is not high, but still it is a drop. 'ccording to the !inancial 0eport, in 1..- the company invested in ac%uiring Billabong license in >www.billabongcorporate.com>about:billabong.php Billabong Corporate 1..+, Company 9istory, viewed on 'ugust 11 http:>>www.billabongcorporate.com>company:history.php Billabong Corporate 1..+, "nvestors 0eports, viewed on 'ugust 11 http:>>www.billabongcorporate.com>investors:reports.php Eahoo !inance 1..+, Consumer )oods biF.yahoo.com>p>3%pmu.html
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Consumer goods sector
09"09"2009
E#ecu$i%e &ummary
The report on Billabong Corporate provides an analysis of the company’s performance for the past 3 years, which gives insights into its sales trends, profitability, and also the shortcomings in its operation. The financial reports of this period of time, obtained from the annual publishment, are exploited in terms of three different functions in the corporate: perating, !inancing, and "nvesting activities. The #ey ratios as well as the changes in assets, profits, and debts are examined under the light of those activities. The company is a well developed one during the period with a large number of investment capital has been generated. $ffectiveness has been proved to be %uite steady& however, with the ac%uiring new assets of long term value, efficiency should be focused as to utilise in the next few year.
2
Ta'le o( )on$en$s
Executive Summary.......................................................................................................2 Business Overview.........................................................................................................4 Operating Activities.......................................................................................................5 Sales, Cost and ro!it "rends.....................................................................................5 Assets.........................................................................................................................# Accounts receiva$le...................................................................................................% &nventory....................................................................................................................% &nterest expense..........................................................................................................' (inancing activities.......................................................................................................)* +eturn on E,uity and +eturn on Assets...................................................................)* Capital Structure.......................................................................................................)) &nvesting activities........................................................................................................)2 C-anging o! non.current assets................................................................................)2 +eturn on Assets.......................................................................................................)/ Conclusion and +ecommendations..............................................................................)4 +e!erences....................................................................................................................)5 Appendix )...................................................................................................................)# Appendix 2...................................................................................................................)0
/
*usiness +%er%ie,
Billabong Corporate is an 'ustralian company with the core business on apparel, accessories, eyewear, and wetsuits in the board sports industry. (nder the corporate different brand names are utilised for different types of product lines, which diversifies and matches the company to different needs of the mar#et. The company first started in )old Coast in *+,3, experienced a %uic# expansion in the national surfing industry, and reached the outside world from the late *+-.s. /ater on, Billabong entered the boardsports with the new lines of s#ate and snow products. !or the period of more than 3. years, Billabong corporate has managed to be well founded with the distribution of a channel in more than *.. countries with approximately *.... outlets worldwide, including specialised boardsports retailers and its own retail stores.
4
+-era$ing Ac$i%i$ies
The operating activities involve all movements related to ac%uire and sell the business goods and services. 0evenues and expenses are the amounts the company expects to receive and consume in the selling process, conse%uently are the main contents of operating analysis. Sales, Cost and Profit Trends 's the financial reports informed, sales, profit and cost trends of the years 1..2, 1.., and 1..- increased 3'ppendix *4, although the ability to create profit from its sales decreased in 56 1..2 to 1.., and 5.76 1.., to 1..-, reducing earns in each dollar of the net profit.
!igure *. 8et profit margin ratios
!igure 1. )ross profit margin ratios
5
)ross profit margin increased among 1.., to 1..-, which meant the efficiency in the manufacturing and effectiveness converting merchandise to sales was improved, while it was mostly maintained between 1..2 and 1..,, with a low decrease converting the percentage to money. "n 1.., Billabong has the best performance in cost control comparing gross profit margin and net profit with the other years 3'ppendix *4. "t reveals that the decrease in net profit margin was not caused by a lac# in controlling the goods’ cost. movements of benefits. 'nalysing the efficiency Billabong had in controlling operating expenditures, other than cost of goods, the operating profit margin decreased. "t shows the impact operating profit margin caused in net profit results. The operating costs had *26 lac# of control among 1..2 to 1.., and few decrease in 1.., to 1..-.
!igure 3. perating profit margin
ther possibility for these results is exchange
Assets "n order to analyse the company performance in generating sales from their investments in assets we can verify the assets turnover. "n the first period 31..2 to 1..,4 the assets were well used, with an increase of -6 through year. 9owever, in the second period 31.., to 1..-4 it dropped 26, depicting that for each dollar spent on assets the amount of sales were less. This trend must change to a maintaining or increasing ratios for a long:term stability. #
!igure 5. 'ssets turnover
The operating performance in converting the profit received by assets in cash is measured in accrual and cash flow comparisons. The percentages were +6, ,6 and +6 for each year respectively 31..-, 1.., and 1..24. "t means that although the investments in assets increased each year, the cash generation decreased then increased in lower levels. !or each dollar invested , and + cents were received in cash. The return on assets e%uation is applicable to discover, in general, if Billabong has been controlling their costs and use of resources based on sales. The results for each year are: 1..2 ; *16, 1.., ; *16 and 1..- ; **6. The difference is not high, but still it is a drop. 'ccording to the !inancial 0eport, in 1..- the company invested in ac%uiring Billabong license in >www.billabongcorporate.com>about:billabong.php Billabong Corporate 1..+, Company 9istory, viewed on 'ugust 11 http:>>www.billabongcorporate.com>company:history.php Billabong Corporate 1..+, "nvestors 0eports, viewed on 'ugust 11 http:>>www.billabongcorporate.com>investors:reports.php Eahoo !inance 1..+, Consumer )oods biF.yahoo.com>p>3%pmu.html
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Consumer goods sector