Compose a 1250 words assignment on financial analysis of goodrington plc. Needs to be plagiarism free! Goodrington group plc belongs to the fashion retailing industry in the United Kingdom. It comprises three popular brands of retailing in the country that are Goodrington, Newton, and Churston. These three brands provide several retail products to different target groups of consumers in the United Kingdom.
Goodrington caters to customers ranging from the young-to-middle aged consumers by providing different items such as fashion clothing, footwear, and homeware.
Newton has its target market catering to the female consumers aged 45 and over by selling clothing items to them.
Churston caters to the consumers with an instinct for fine fragrances and perfumes. It attracts its target consumers with the help of a brightly lit and decorated store interior that is highly appealing to the people with an artistic sense.
The most significant change concerning the company’s operations, as reflected in the company’s annual report, is the acquisition of a subsidiary costing the company 4,350,000 in 2005.
The Gross Profit ratio analyses the company’s profit margin before accounting for various operating costs (Mcmenamin Jim, 1999). The gross profit ratio for Goodrington plc shows that the company is earning about 20% out of the total sales revenue after having accounted for the cost of sales. This also shows that the company loses almost 80% of the total sales revenue on production and distribution expenses. The company’s gross profit ratio has been stable over the last two years.
The net profit ratio analyses a company’s profitability after taking into account all the operating costs and interest expense etc (Mcmenamin Jim, 1999). An analysis of the company’s net profit ratio reveals that the company only manages to retain about 6% of the total sales revenue after accounting for various operating costs. The difference between gross profit and net profit ratio shows that the company loses about 15% of gross profit on selling, general, and administrative expenses.
The current ratio measure’s a company’s ability to pay off its short-term liabilities (Meigs & Meigs, 1993). An analysis of this ratio shows that the company has maintained the same level of the current ratio for the last two years.
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