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The UK Fashion Industry - Research Paper Example

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Among many reasons, high-in fashion brands’ quest is a leading one (Deloitte. 2014). UK shows highest growth in the sector among all EU countries in 2013 as presented below.
Further the industry is…
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The UK Fashion Industry
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A performance Analysis of UK Fashion Industry Contents 0Introduction and Rationale for industry choice 5 1. Aim and objectives 6 1 Aim 6 1.2. Objectives 7 2.0Rationale for chosen companies 7 Sports Direct Intl Plc. 7 2.1.Moss Bros Group plc 7 2.2.JD Sports Fashion Plc 7 2.3.Sports Direct Intl Plc 8 3.0Rationale for the choice of ratios 8 3.1. Profitability ratios 8 3.1.1. Gross profit margin 8 3.1.2. Net profit margin 9 3.2. Liquidityratios 9 3.2.1. Current ratio 9 3.2.2. Quick ratio 9 3.3. Efficiency ratios 9 3.3.1. Asset turnover 9 3.3.2. Inventory turnover 10 3.4. Financial leverage 10 3.4.1. Long term Debt / Equity 10 3.4.2 Interest cover 10 3.5. Investment ratio 11 3.5.1 Earnings per share 11 3.5.2 P / E ratio 11 3.6. Non-financial ratios 11 ...... 11 3.6.1. Share price 11 3.6.2. Sales / Employee 12 3.6.3. Like-for-like sales 12 5.0...Mini Literature Review 12 5.1.Porter’s five force analysis 12 5.1.1.Threat of new entrants (4- high) 13 5.1.2.Power of suppliers (3- Moderate) 13 5.1.3.Power of buyers (3.5- Moderate) 13 5.1.4.Threat of substitutes (3- Moderate) 14 5.1.5.Rivalry amongst competitors (4.5- High) 14 5.2. PEST analysis 14 5.2.1.Political 14 5.2.2.Economic 14 5.2.3.Social 17 One other major social preference change is the evidence of the men’s fashion industry growth during last five years as represented: 18 5.2.4. Technological 19 7.0Timetable 20 References 22 Appendix1. 27 1) Moss Bros Group plc 27 2) JD Sports Fashion Plc 27 3) Sports Direct Intl Plc 28 Appendix 2 29 2.0. Results of Chosen Ratios 29 2.1. Profitability ratios 29 2.1.1. Gross profit margin 29 2.1.2 Net profit margin 30 2.2. Liquidity ratios 30 2. 2.1. Current ratio 30 2.2. 2. Quick ratio 31 2.3. Efficiency ratios 31 2.3.1. Asset turnover 31 2.4. Financial leverage how much company takes as debt (percentage) 32 2.4.1. Long term Debt / Equity 32 2.5. Investment ratio 33 2.5.1 Earnings per share 33 2.5.2 P / E ratio 34 2.6. Non-financial ratios 34 2.6.1. Share price 34 2.6.2. Sales / Employee 35 2.6.3. Goodwill 35 Figure lists Figure 1: European clothing and footwear total sales by country 6 Figure 2: Summary of Five Forces of UK Apparel Retail Sector 13 Figure 3: Population estimates for the UK 15 Figure 4: Unemployment rate of the UK 16 Figure 5: Economic output (GVA) of the UK 16 Figure 6: Estimate for GVA 17 Figure 7: Population position of UK 18 Figure 8: Market Value of UK Clothing Industry 19 Figure 9: Gross profit margin of the chosen companies 29 Figure 10: Net profit margin of the chosen companies 30 Figure 11: Current ratio of the chosen companies 30 Figure 12: Quick ratio of the chosen companies 31 Figure 13: Asset turnover of the chosen companies 31 Figure 14: Inventory turnover of the chosen companies 32 Figure 15: Long term debt / Equity of the chosen companies 32 Figure 16: Interest cover of the chosen companies 33 Figure 17: Earnings per share of the chosen companies 33 Figure 18: P / E ratio of the chosen companies 34 Figure 19: Share prices of the chosen companies 34 Figure 20: Sales/Employee of chosen companies 35 Figure 21: Growth of like for like sales 35 1.0 Introduction and Rationale for industry choice The UK fashion industry has high growths and high competition (i2i, 2014). Among many reasons, high-in fashion brands’ quest is a leading one (Deloitte. 2014). UK shows highest growth in the sector among all EU countries in 2013 as presented below. Figure 1: European clothing and footwear total sales by country Source: i2i(2014) Further the industry is forecasted to grow at compound annual growth rate (CAGR) 4.66% for the period of 2013-2018 (Global Business Browser, 2014d). It 190,000 registered business stores and 287,100 retail outlets across the country and 9% for the industry sales is accounted for online sales (i2i, 2014). On the other hand, Fashion also contributes value to the UK economy at rate of 22% and reached at £ 26 billion in 2014 and also supports around 797,000 jobs. Fashions contribution via indirect means of supporting industry supply chains and induced spending on wages increased 23% more than in 2009 (British Fashion Council, 2014). The facts define the potential of the industry to contribute in the forecasted UK GDP growth of 2.6% for upcoming year 2015 and an average of 2.4% for 2015-2019 (The Conference Board, 2015). All these contribute towards the selection of the fashion industry for analysis. High competition level of the industry and performance indicators of giant players that are positively contributing to the growth of the industry which in turns increasing gross value added (GVA) of the sector to the economy (Adler, 2004). 1.1. Aim and objectives 1.1.1. Aim Main aim of the paper is to analyze the competition level of the UK apparel retailing industry via analysing the performance indicators of huge players in order to develop review of the industry.. 1.1.2. Objectives The main objectives of the paper are: Financial performance analysis using financial ratios strategic analysis of external indicators for the industry 2.0 Rationale for chosen companies Listed below are the three of the reputed huge players of the UK fashion industry that are i selected in the industry to be analyzed: . Moss Bros Group plc JD Sports Fashion Plc Sports Direct Intl Plc. 1.0 2.0 2.1. Moss Bros Group plc Introduced in 1851, Moss Bros is now become a leading menswear specialist in the UK fashion industry and has complete range of men’s suiting, shoes and accessories, Moss Bros own over 135 retail stores all over UK with 2 stores in Eire and an internet retail site. Having strong heritage in menswear, Moss Bros is now focusing on youth market of the industry (Moss, 2015). According to Global Business Browser (2014a), the revenue of the group increased by 3.41% to £109.1m and the net income increased by amazing 50% to £3.6m (2014). However, operating cost has reported to increase by 4% in the first two quarters of financial year 2015 (Global Business Browser, 2014a). 2.2. JD Sports Fashion Plc John David Sports founded in 1981 is now emerged as JD group and is considered as the leading specialist in UK multiple fashion brands retailing. The company owns 800 stores and deals in casual and sports brand. Company’s main business is attributed to the young fashion and sports including sports accessories (JD Sports Plc, n.d.). Growth through acquisition is the strategy of the group, such as the acquisition of the ONETrueSaxon Brand and Certain Blacks Leisure Group plc in 2012 (Felsted and Wembridge, 2012). The sales of the group increased by 5.7% to £1330.6maccompany with an increase of 3.6% of growth of net profits in 2014 (Global Business Browser, 2014b). 2.3. Sports Direct Intl Plc Founded in 1982, company has now emerged as the leading European distributor of third party fashion brands etc with 420 sports brand stores only in UK, 130 lifestyle brand stores all over the country and also internet interface. With huge business size, the company owns large portfolio of internationally recognized brands (Sports Direct, 2014). The total revenue of the company increased by 23.8% to £2706m and its net income increased by 18.9% to £180.2m from 2013 to 2014 (Global Business Browser, 2014c). 3.0 Rationale for the choice of ratios ...... Different perspective of financial conduct of the business are discussed using different ratios in the section below: .. 3.1. Profitability ratios 3.1.1. Gross profit margin GP margin indicates the ability of the company to generate profits on the cost of goods sold over a certain period (Atrill and McLaney, 2011). It explains the direct cost management ability of selected firms and is calculated as follows: (Ross, Westerfield, and Jordan, 2009) .......... 3.1.2. Net profit margin NP margin compares the final earnings of the firm with total sales including taxes impact (Atrill and McLaney, 2011). The ratio is measured with the given expression (Charles, 2001): . 3.2. Liquidityratios 3.2.1. Current ratio Current ratio measure the liquidity of the firm by using current assets to payoff liabilities (McLaney, 2009). According to Ross, Westerfield, and Jordan, (2009), the current ratio is calculated as follows: 3.2.2. Quick ratio The ratio measures the ability of the firms’ current assets to cover its current liabilities excluding inventories (Atrill and McLaney, 2011). The ratio is employed to reveal the standing ability of the firms within current uncertain economic scenario and is measured as follows (Ross, Westerfield, and Jordan, 2009): 3.3. Efficiency ratios 3.3.1. Asset turnover The efficiency of the firms to utilize their assets for generating revenues is done through asset turnover ratio. It helps in understanding internal processes efficiency in comparison with competitors and is measured with following expression ((Ross, Westerfield, and Jordan, 2009): 3.3.2. Inventory turnover The ratio examines inventory against sales and is implied here to compare the inventory turnover ability of the firm. The higher inventory ratio reflects a good level of company sales and inventory flow (Atrill and McLaney, 2011). It is calculated as follows (Besley, & Brigham, 2007): . 3.4. Financial leverage 3.4.1. Long term Debt / Equity The ratio is used to analyze the selected firms’ approach of growth via debt or equity The ratio is obtained by dividing long-term debt by total stockholders activity (Atrill and McLaney, 2011). It is calculated as follows (Besley, & Brigham, 2007): 3.4.2 Interest cover When firms are more inclined toward growth via debt, interest expense payments are comes into consideration. The ratio is employed to measure the underlying firms’ ease to pay the interest on the debt acquired by the firms (Pike, and Neale, 2009). The ratio is measured as follows (Gitman, 2003): 3.5. Investment ratio 3.5.1 Earnings per share The ratio is considered as most important indicator of determining actual share prices and is utilized for generating per share valuation of firms’ profitability and is measured as follows (Atrill and McLaney, 2011): 3.5.2 P / E ratio To assess market value viability of the firms’ shares, the ratio is employed. The ratio as presented below measures the growth of the earnings per share against its market value of price of shares (Atrill and McLaney, 2011): 3.6. Non-financial ratios ...... 3.6.1. Share price Share price assessment against its earnings per share is done to analyze the future growth potential of the shares of the firms’ with in the financial markets. 3.6.2. Sales / Employee Retail industry is more of people driven business type and the ratio provide measure to analyze the efficiency level of business for generating sales per person(Atrill and McLaney, 2011). It is measured as follows (Gildersleeve, 1999): 3.6.3. Like-for-like sales The ratio excludes all other business ventures and measures the performance against sales growth of the company year-by-year (Vause, 2009)). 5.0 ...Mini Literature Review 5.1. Porter’s five force analysis Porter’s five forces is utilized to analyze the growth potential of the UK apparel industry in a highly competitive environment against rating 1 to 5 for five forces indicated by Michael Porter. Figure 2: Summary of Five Forces of UK Apparel Retail Sector Source: Global Business Browser (2014d) 1. 2. 3. 4. 5. 5.1.1. Threat of new entrants (4- high) The reasons contributing are the technological innovation and growth of online retailing which reduces cost. Also governmental relaxing policies for FDI and UKTI are also increasing threat (Fernie, Sparks, and McKinnon, 2010). Also changes in the consumer buying behaviour and demand for local and international designer wear. 5.1.2. Power of suppliers (3- Moderate) . Relaxing trade policy allows retailers to import goods from low-wage countries where cost of productions while meeting standards makes the power moderate (Global Business Browser, 2014d). 5.1.3. Power of buyers (3.5- Moderate) Economic downturn has shrunken the power of consumers considerably; while, competitive pricing, replica and cheaper options has further reduced switching costs. This has raised sensitivity of the market towards brand loyalty. Overall, the bargaining power of buyer is moderate (Global Business Browser, 2014d). 5.1.4. Threat of substitutes (3- Moderate) Brand selection, replica and cheaper option availability and price war of retailers create substitute for buyer to switch. Further, virtual markets and buying from manufacturer increase the ability of buyers to switch. (Global Business Browser, 2014d). 1.0 2.0 3.0 4.0 5.0 5.1. 5.2. 5.3. 5.4. 5.1.5. Rivalry amongst competitors (4.5- High) Large number of players such as H & M, ZARA, Top Shop, etc has increased competition for retail in addition to pressure from wholesalers, manufacturers for forward integration (Global Business Browser, 2014d). 5.2. PEST analysis 1.0 2.0 3.0 4.0 5.0 6.0 5.2.1. Political UK political environment is comparatively peaceful. UK also attracted highest FDI’s on record mainly through support and relaxation for the laws to invest (Gov UK, 2014). The policy helps create in new jobs and aid in increasing GDP. Strategy for future retail revealed in October 2013 by UK trade and Investment (UKTI) supports the industry to grow locally and internationally. Further EU policies, plan and Directive for labour moving around and other relaxation is also leading changing industry towards success (Gov UK, 2013). Online retailing accounting for 228,000 retailers (i2i, 2014) and relaxation and support in tariff and taxes also encourages retail businesses to expand globally (Gov UK, n.d.).However, supplires mainly in Asian countries pose threat of law and order situation (Key note, 2014b). Also, relaxing policies of the government for FDI for making UK a hub for operating business in the European countries increases level of competition from international players as well small new international investors (Key note, 2014a). 5.2.2. Economic Economic downturn of 2008 had and is still having bad EU economy including UK. The recovery has started but it is still sluggish and creating challenge. Role of population and employment rate, percentage of young generation and inclination towards fashion apparel are affecting the industry. Estimation of increase in the population of the country is presented below. Figure 3: Population estimates for the UK Source: ONS(2014) The phenomenon of employment indicates an increase in the buying power of the consumers. Figure 4: Unemployment rate of the UK Source: BBCNews (2014) The relation of economic growth and retail sector including fashion industry is twofold as both contribute to the growth of each other. Retail sector is also one of the major contributor industries in UK GDP growth and for GVA of 16% in 2012. Below presented is a snapshot of economic output of the sector in comparison with economy. Figure 5: Economic output (GVA) of the UK Source:Rhodes (2014) Industry also contributes positively in the other growth indicators including employment as mentioned in the introduction. One major sub-sector of the industry is considered as fashion retailing, The fashion industry itself contribute high in economic growth of the country and also considered as a major retail contribution generators as depicted below for 2009. Figure 6: Estimate for GVA Source: British Fashion Council(2012) Looking at the scenario, it can be concluded that although country is facing stagnant growth after shock but providing evidence of steady economic growth. All the players including selected companies of apparel industry will have the growth opportunity to be exploited by catering new emerging markets due to population increase and income level increase. 5.2.3. Social Social factors of a country represent cultural values and preferences of the society by means of the indication of well-being of the country (Applegate, & Johnsen, 2006). Shopping is now emerged as a leisure time activity for the consumers in UK and UK fashion brands keep the status of trend setter for rest of the world (i2i, 2014). Due to recession the dress code of most of the UK organization is relaxed to “smart-casual”, which also contributed to change social buying preferences for the apparel industry (Euro Monitor, 2014). The scenario favours growth of industry and open many opportunities for players to get competitive advantage over the industry. The birth rate and aging hierarchy of the population of country is another indicator that represents the growing opportunity of young fashion brands. A snapshot UK population is presented below. The area marked blue represent a wider section of population is now in the section of 15-25 ages, who are the main buyers for the mentioned young fashion and sport brands sector. Figure 7: Population position of UK Source: ONS(2014). 1. 2. 3. 4. 4.1. 4.2. 4.3. One other major social preference change is the evidence of the men’s fashion industry growth during last five years as represented: Figure 8: Market Value of UK Clothing Industry Source: Key Note (2014a) All the three players focused in the report mainly deals in the menswear or sport, main target audience for both the divisions are men and children, as depicted by above graphic continuous growth in men section is a highly rated opportunities for the companies to expand. However, still lower income levels and unemployment rate indicates high competition level within the industry on the grounds of pricing is possible. 5.2.4. Technological Technological boost is not out of scope for the industry growth. Critics highly attribute industry growth with technological support of online retailing and across the border value sharing (i2i, 2014). The break-through innovation and boost of online retailing is one of the key drivers for the industry to not only disseminate information and bridge far gaps but also to generate huge revenues with cheaper process costs. UK is highly intended to support the industry via R&D facilities. UKTI developed a strategic plan specially to support creative industry of UK including technology and designer fashion, which in turn help UK to attract more FDI and trade globally (UK Trade & Investment, 2014). On the hand, the technology in the form of media channels including fashion and sports TV channels, news, entertainment and infotainments programs are aiding positively for the industry. Companies’ web portals, social media advertising, other retail stores and technology based faster logistics will contribute positively for the industry growth. Further, indirectly technological support in the manufacturing, procurements and import/export is providing the boosting capability to the industry. However, the impact of the technological change can develop damaging scenario for the industry if not tackled and exploited correctly as it is increasing the chances of overseas players in the market via internet portal as well as physically. 7.0 Timetable References Adler, U. (2004) Structural change: The dominant feature in the economic development of the German textile and clothing industries. Journal of Fashion Marketing and Management,8 (3),pp.300-319. Applegate, E., & Johnsen, A. (2006) Cases in Advertising and Marketing Management: Real Situations for Tomorrows Managers. Rowman & Littlefield Publishers. Atrill, P. and McLaney, E. (2011) Accounting and Finance for non-specialists. 7th ed. Harlow: Financial Times Prentice Hall. BBC News. (2014)Economy tracker: Unemployment[online]. Available from:http://www.bbc.com/news/10604117[Accessed on: 4th January, 2015]. Besley, S., & Brigham, E. (2007). Essentials of Managerial Finance, 14 edn. USA: Thomson Higher Education. Besley, S., & Brigham, E. (2007). Essentials of Managerial Finance, 14 edn. USA: Thomson Higher Education. British Fashion Council. (2012). The value of UK Fashion Industry[online]. Available from:http://www.ukft.org/documents/industryinformation/The%20Value%20of%20Fashion.pdf[Accessed on: 4th January, 2015]. British Fashion Council. (2014). Facts & Figures AW14[online]. Available from:http://www.britishfashioncouncil.org.uk/news/623/Facts--Figures-AW14[Accessed on: 4th January, 2015]. Charles, G. H. (2001). Financial Reporting and Analysis: Using financial accounting information. South-Western College Publishing. Deloitte. (2014). Global Power of Luxury Goods in the Hands of the Consumer. online]. Available from: http://www.britishfashioncouncil.org.uk/news/623/Facts--Figures-AW14[Accessed on: 15th January, 2015]. Euro Monitor. (2014). Apparel and Footwear in the United Kingdom [online]. Available from: http://www.euromonitor.com/apparel-and-footwear-in-the-united-kingdom/report[Accessed on: 4th January, 2015]. Felsted, A. and Wembridge, M. (2012) JJB Sports calls time as shares are suspended: GENERAL RETAILERS. Financial Times [London (UK)], 25 Sep 2012, p. 24. Fernie, J., Sparks, L., and McKinnon, A.C. (2010) Retail logistics in the UK: past, present and future. International Journal of Retail & Distribution Management,38 (11/12)pp. 894-914. Gildersleeve, R. (1999). Winning business: how to use financial analysis and benchmarks to outscore your competition (Vol. 1). Gulf Professional Publishing. Gitman, L. (2003). Principles of Managerial Finance. Boston: Addison-Wesley Publishing Global Business Browser. (2014a) Moss Bros Group plc [online]. Available from: http://globalbb.onesource.com/web/Reports/ReportMain.aspx?KeyID=89923&Process=CP&Report=RATIOS [Accessed on: 4th January, 2015]. Global Business Browser. (2014b) JD Sports Fashion Plc [online]. Available from: http://globalbb.onesource.com/web/Reports/ReportMain.aspx?KeyID=42202176&Process=CP&Report=RATIOCOMPS [Accessed on: 4th January, 2015]. Global Business Browser. (2014c) Sports Direct Intl Plc [online]. Available from: http://globalbb.onesource.com/web/Reports/ReportMain.aspx?KeyID=95505721&Process=CP&Report=RATIOS [Accessed on: 4th January, 2015]. Global Business Browser. (2014d) Apparel Retail in the United Kingdom [online]. Available from: http://globalbb.onesource.com/Web/Reports/ReportMainIndustry.aspx?SicCodeID=29&Report=ALLMARKETRESEARCHREPORTS&Process=IP&Type=GetReport&FileFormat=PDF&ReportID=62430&FileName=0183-2005-2013.pdf&VendorName=Datamonitor [Accessed on: 26 December 2014]. Gov UK. (2013). Industry and Government delivering in Partnership[online]. Available from:https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/252383/bis-13-1204-a-strategy-for-future-retail-industry-and-government-delivering-in-partnership.pdf[Accessed on: 4th January, 2015]. Gov UK. (2014). UK attracts highest levels of inward investment on record[online]. Available from:https://www.gov.uk/government/news/uk-attracts-highest-levels-of-inward-investment-on-record[Accessed on: 4th January, 2015]. Gov UK. (n.d.)Classification of goods[online]. Available from:https://www.gov.uk/browse/business/imports-exports/classification-of-goods[Accessed on: 4th January, 2015]. i2i. (2014). The UK Fashion Market Opportunity[online]. Available from:http://www.i2ieventsgroup.com/sites/www.i2ieventsgroup.com/files/reports/UK%20Fashion%20Market%20Report.pdf[Accessed on: 4th January, 2015]. Jd Plc. (n.d.). History[online]. Available from:http://www.jdplc.com/company-information/history.aspx[Accessed on: 4th January, 2015]. Key Note. (2014a) Clothing Retailing Market Update 2014 [online]. Available from: https://www.keynote.co.uk/market-intelligence/view/product/10958/clothing-retailing?medium=download [Accessed on: 26 December 2014]. Key Note. (2014b) Youth Fashionwear Market Report 2014 [online]. Available from: https://www.keynote.co.uk/market-intelligence/view/product/10943/youth-fashionwear?medium=download [Accessed on: 26 December 2014]. London Stock Exchange. (2014a) Moss Bros Group plc [online]. Available from: http://www.londonstockexchange.com/exchange/prices/stocks/summary/fundamentals.html?fourWayKey=GB0006056104GBGBXSSMM [Accessed on: 4th January, 2015]. London Stock Exchange. (2014b) JD Sports Fashion Plc [online]. Available from: http://www.londonstockexchange.com/exchange/prices/stocks/summary/fundamentals.html?fourWayKey=GB00BMNQZP86GBGBXSTMM [Accessed on: 4th January, 2015]. London Stock Exchange. (2014c) Sports Direct Intl Plc [online]. Available from: http://www.londonstockexchange.com/exchange/prices/stocks/summary/fundamentals.html?fourWayKey=GB00B1QH8P22GBGBXSET1 [Accessed on: 4th January, 2015]. McLaney, E. (2009). Business Finance: Theory and Practice. Pearson Education, New Jersey. Moss. (2015). About us[online]. Available from:http://www.moss.co.uk/about-us[Accessed on: 4th January, 2015]. ONS. (2014). Mid-year population estimates for the UK 2013[online]. Available from:http://www.ons.gov.uk/ons/rel/pop-estimate/population-estimates-for-uk--england-and-wales--scotland-and-northern-ireland/2013/info-population-estimates.html[Accessed on: 4th January, 2015]. Pike, R., and  Neale, B. (2009). Corporate Finance and Investment: Decisions and Strategies. 6th Edition. Harlow: FT Prentice Hall. Rhodes, C. (2014) The retail industry: statistics and policy - Parliament UK [online]. Available from:https://www.google.com.hk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CB8QFjAA&url=http%3A%2F%2Fwww.parliament.uk%2Fbriefing-papers%2Fsn06186.pdf&ei=GaOqVLzhHYSrU_-Ag-AL&usg=AFQjCNGYOKEJHOsxpwFOYTkutDkGqUEDqQ[Accessed on: 4th January, 2015]. Ross, S., Westerfield, R., and Jordan, B. (2009). Fundamentals Of Corporate Finance Standard Edition. New York, McGraw-Hill. Ross, S., Westerfield, R., and Jordan, B. (2009). Fundamentals Of Corporate Finance Standard Edition. New York, McGraw-Hill. Sports Direct. (2014). Sports Direct at a Glance[online]. Available from:http://www.sportsdirectplc.com/about-us/at-a-glance.aspx[Accessed on: 4th January, 2015]. The Conference Board. (2015). Global Economic Oulook 2015 - Charts & Tables[online]. Available from https://www.conference-board.org/data/globaloutlook/index.cfm?id=27451[Accessed on: 4th January, 2015]. UK Trade & Investment. (2014). UK Creative Industries – International Strategy[online]. 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Appendix1. 1) Moss Bros Group plc   2014 2013 2012 2011 2010 Industry Profitability ratios             Gross profit margin 59.03% 59.90% 59.72% 58.73% 55.15% 50.01% Net profit margin 3.28% 2.26% 1.53% -8.03% -4.48% 6.40% Liquidity ratios             Current ratios 2.59 2.79 2.6 1.52 1.74 2.17 Quick ratios 1.62 1.66 1.48 0.34 0.41 1.32 Efficiency ratios             Asset turnover 1.8 1.83 1.84 1.64 2.23 1.43 Inventory turnover 3.28 3.03 2.47 2.02 3.57 4.46 Financial leverage             Long term debt / Equity 0 0 0 0 0 30.1 Interest cover 138.77% 0.00% 7.75% 0.00% 0.00% 5.19% Investment ratios             Earnings per share p 3.76 2.52 7.27 -20.84 -6.10   P/E ratio 24.73 30.47 21.32 -4.67 -3.48 17.26 Non-financial ratios             Sales/Employee 115738 110689 103638 75480 116619 427424 Growth of like for like sales 4.20% 3.90% 12.50% 10.70% -0.40%   Source: Global Business Browser, (2014a); London Stock Exchange (2014a) 2) JD Sports Fashion Plc   2014 2013 2012 2011 2010 Industry Profitability ratios             Gross profit margin 48.48% 48.73% 49.16% 49.45% 49.30% 50.01% Net profit margin 3.02% 3.08% 4.42% 6.32% 5.57% 6.40% Liquidity ratios             Current ratios 1.15 1.21 1.19 1.45 1.29 2.17 Quick ratios 0.34 0.34 0.41 0.72 0.58 1.32 Efficiency ratios             Asset turnover 2.41 2.54 2.48 2.62 2.92 1.43 Inventory turnover 4.12 4.61 4.95 5.62 5.88 4.46 Financial leverage             Long term debt / Equity 0 0 0.01 0.01 0.01 30.1 Interest cover 33.10% 37.24% 63.72% 166.25% 75.34% 5.19% Investment ratios             Earnings per share p 82.52 79.71 96.27 114.84 88.16   P/E ratio 13.78 8.64 6.75 7.43 6.29 17.26 Non-financial ratios             Sales/Employee 126625 120699 117451 130740 125618 427424 Growth of like for like sales 6.70% 1.20% 0.30% 5.60% 2.50%   Source: Global Business Browser, (2014b); London Stock Exchange (2014b) 3) Sports Direct Intl Plc   2014 2013 2012 2011 2010 Industry Profitability ratios             Gross profit margin 42.68% 40.94% 40.54% 41.20% 40.58% 50.01% Net profit margin 6.66% 6.94% 5.79% 5.26% 6.16% 6.40% Liquidity ratios             Current ratios 1.06 1.64 1.44 1.29 0.63 2.17 Quick ratios 0.3 0.5 0.39 0.4 0.18 1.32 Efficiency ratios             Asset turnover 1.74 1.72 1.79 1.7 1.5 1.43 Inventory turnover 3.06 3.38 4.08 4.31 3.59 4.46 Financial leverage             Long term debt / Equity 0.01 0.38 0.45 0.59 0.01 30.1 Interest cover 12.55% 18.30% 11.12% 7.31% 5.51% 5.19% Investment ratios             Earnings per share p 30.8 26.6 18.68 14.8 15.73   P/E ratio 24.28 17.37 15.35 11.69 9.04 17.26 Non-financial ratios             Sales/Employee 157644 155270 151153 154980 132945 427424 Growth of like for like sales 10.50% 10.60% 0.70% 6.60% 3.40%   Source: Global Business Browser, (2014c); London Stock Exchange (2014c) Appendix 2 2.0. Results of Chosen Ratios 2.1. Profitability ratios 2.1.1. Gross profit margin Figure 9: Gross profit margin of the chosen companies 2.1.2 Net profit margin Figure 10: Net profit margin of the chosen companies 2.2. Liquidity ratios 2. 2.1. Current ratio Figure 11: Current ratio of the chosen companies 2.2. 2. Quick ratio Figure 12: Quick ratio of the chosen companies 2.3. Efficiency ratios 2.3.1. Asset turnover Figure 13: Asset turnover of the chosen companies 2.3.2. Inventory turnover Figure 14: Inventory turnover of the chosen companies 2.4. Financial leverage how much company takes as debt (percentage) 2.4.1. Long term Debt / Equity Figure 15: Long term debt / Equity of the chosen companies 2.4.2 Interest cover Figure 16: Interest cover of the chosen companies 2.5. Investment ratio 2.5.1 Earnings per share Figure 17: Earnings per share of the chosen companies 2.5.2 P / E ratio Figure 18: P / E ratio of the chosen companies 2.6. Non-financial ratios 2.6.1. Share price Figure 19: Share prices of the chosen companies (Yahoo Finance, 2014) 2.6.2. Sales / Employee Figure 20: Sales/Employee of chosen companies 2.6.3. Goodwill Figure 21: Growth of like for like sales Read More
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Competition and performance of UK Apparel Retailer Sector 1241 Essay. https://studentshare.org/finance-accounting/1855060-competition-and-performance-of-uk-apparel-retailer-sector-1241
(Competition and Performance of UK Apparel Retailer Sector 1241 Essay)
Competition and Performance of UK Apparel Retailer Sector 1241 Essay. https://studentshare.org/finance-accounting/1855060-competition-and-performance-of-uk-apparel-retailer-sector-1241.
“Competition and Performance of UK Apparel Retailer Sector 1241 Essay”. https://studentshare.org/finance-accounting/1855060-competition-and-performance-of-uk-apparel-retailer-sector-1241.
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