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Financal Statement Analysis
Pages 8 (2008 words)
Financial Statement Analysis Table of Contents Introduction 3 Corporate Failure Models for Inditex SA and Gap Inc 3 Evaluation of Share Price Movements for Inditex SA and Gap Inc 6 The impact of Credit Crunch on Inditex SA and Gap Inc 9 Corporate Governance Issues of Inditex SA and Gap Inc 10 Recommendation and Conclusion 11 References 13 Introduction This study encompassed a relative examination of two major fashion retail companies across the world, the Inditex SA and Gap Inc.
Consequent to this, the share price movements of Inditex SA and Gap Inc over the past one year are analysed, following which the impact of credit crunch on both the retail firms are discussed. It also confers on their corporate governance issues in detail. Finally, the paper offers recommendations for both Inditex SA and Gap Inc with the purpose of improving their financial as well as operational situation in the upcoming years. Corporate Failure Models for Inditex SA and Gap Inc The findings from the previously conducted financial statement analysis of Inditex SA and Gap Inc suggest that both the companies are financially stable and fit. However, though the present financial position of both the retail companies is stable in comparison to the overall retail industry, it is imperative to assess the susceptibility of these companies to corporate failure or bankruptcy. This can be accomplished by computing the Altman’s Z-score of Inditex and Gap. This is because the Z-scores of the business organizations enable one to forecast the extent of financial distress encountered by the business. It also assists in assessing whether a particular organization is vulnerable to bankruptcy in the upcoming years. ...
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