Based on the rising revenues and margin data, it is possible to conclude that Inditex is at the growth phase of the life cycle, while Benetton, the GAP, and H&M are at maturity and stability phase, as their revenues and margins are declining. Financial Ratio Analysis - Inditex Profitability Gross profit margin of the company is fairly high – 59%, which implies that the company has effective outsourcing manufacturing strategy and has good relationships with suppliers. Both factors have positive impact on cost reduction. Operating profit margin is 18%, which means that the company makes 0,18 cents for every Euro of sales (before taxes). Net profit margin is 14% and it means that the company has good control over its costs. ROA ratio which is 19% means that the company is effectively using its investment, converting it into profit. ROE Liquidity Current ratio of the company is 2,0 suggests that the company has a good ability to pay back its short-term liabilities with the short-term assets it has. This means that Inditex is capable to continue its business expansion strategy and to avoid insolvency during the slower growth phases. The quick ratio of 1,5 means that Inditex position has enough liquid assets to cover its current liabilities. Thus, the company can implement its strategy of fast fashion being capable to pay quickly for its orders and to kepp short inventory turnover. Leverage Debt-to-Equity ratio (0.42) indicates that the company’s debt used to finance its operations is not so high and is a positive sign of strong financial position of the Inditex. This indicates that the company is financially strong enough to grow its business due to its profits rather than debts. Long-term debt-to-equity ratio is relatively low and indicates on the company’s financial stability. Activity Inventory turnover at 4,50 indicates that the company has efficient supply chain and can continue taking its course of fast fashion retailer. Days of inventory ratio is equal to average 81.0 days. This indicator seems to be fairly high for the company focusing on fast fashion strategy. Average collection period is 13,4 days, which is quite low and therefore optimal for Inditex to continue its aggressive business development strategy. Financial Analysis has shown that Zara’s overall financial position is very strong and enabling for implementing its strategy of future sales and stores’ growth. SWOT Analysis Strengths The company’s strategy is based on aggressive multichannel global business expansion which is implemented due to its flexible business model based on having the right fashions at the right time at affordable prices. Financial state of the company rated as “healthy” allows the company to have enough capital for future growth and investments. Global expansion of Zara’s stores and its responsive marketing strategy increase global brand awareness. All these result in strong sales and revenue growth. Effective supply chain management allows the company to be competitive on the market balancing the quality of its goods and affordable prices for mass market consumers. Excellent human resource management is another strategic strength of the company which enables the company to grow its sales and gain positive reputation. Design of new stores in
Company Situation Analysis Introduction Company Situation Analysis Section provides an overview of Zara’s financial and overall business performance. For this purpose, analysis of key financial ratios and SWOT analysis were conducted, respectively. Financial Analysis Calculation of the historical data of operation revenues of Inditex (see Appendix, Table 1) has shown 24% overall sales growth within the two- year period from 2010 to 2012…
In this scenario, e-commerce is the latest emerging trend in the field of information technology that is changing the world of the business. This paper presents a detailed analysis of some of the major aspects of new organizational e-business strategy specification for Panfore electronics (www.panfore.com).
Humana delivers insurance products and healthcare programs for its customers. Humana also supports charitable actions to encourage healthy lives and communities. The situation analysis of Humana reveals that Humana understands its customers’ needs and develops its products according to customers’ needs and preferences.
According to the case study, the company has achieved a favourable position among its customers and suppliers with all the efforts. However, this does not guarantee a company's strength and potential in terms of investment. To evaluate and analyse this aspect of the company's position, certain financial ratios have also been used in the report.
In this documentation, you would find solution templates that could be applied by the administrators of the business to improve the procedures of knowledge management thus providing the entire organization a chance to further improve both internally and externally for the best ways of serving the values of the members of the organization and the clients that are being served in the market.
Chairman statement in an annual report is like an index of the contents of the report. One can say that Chairman statement sets the tone of the report and provides an overview of the performance of the
This paper presents a detailed analysis of some of the major aspects of new organizational e-business strategy specification for Panfore electronics (www.panfore.com). The company has a web site which provides an overview of the business but it does not encompass any
Due to the flaws in the approach, some scholars have argued that implementing it in the market place is detrimental to the business.
It is important to evaluate a Company’s Resources and its competitive position. There are five most common areas used to analyze
SWOT is regularly incorporated into the strategic planning procedure (Böhm, 2009). At a glance, a SWOT analysis is a basic model that is simple to implement; however, to do a comprehensive SWOT examination that is both compelling and
7 pages (1750 words)Essay
Get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Apply my DISCOUNT
Got a tricky question? Receive an answer from students like you!Try us!
Didn't find an essay?
Contact us via Live Chat, call us at +16312120006or send an email to firstname.lastname@example.org