Submitted by: Submitted by ashleyjia
Views: 400
Words: 3058
Pages: 13
Category: Business and Industry
Date Submitted: 07/07/2011 08:59 AM
Executive Summary
The report provides a comprehensive analysis of financial performance for the Reject Shop. The first part is the analysis of financial ratios which are relative to the business, including profitability, efficiency, liquidity, financial leverage ratios. In addition, non-financial indicators such as share price or environmental element are also provided for investors while making decision. The following part is strength and weakness of the report and the recommendation of investing TRS as a medium-term would be in the last part.
1. Introduction
The first Reject Shop was opened in Melbourne in 1981 and rapidly grown to 200 stores in New South Wales, South Australia, Victoria, Queensland, Tasmania and Western Australia. The Reject Shop locates stores in convenient locations such as shopping centres and offer various discounted goods including everyday essentials, kitchen essentials, bed& bath, home & entertainment and gardening items. Customers who enjoyed bargains attracted by convenient locations, lower prices and mixed category. To be one of the most successful retail store in Australia, The Reject Shop focus on growth, profitability and customer satisfaction. To ensure whether The Reject Shop is worth to invest in $500,000, the report would provide performance analyse by financial ratios, a comparison of last three years’ performance, vertical and horizontal analysis and also the comment on the strength and weakness of the report at the end.
2. Analysis of Financial Ratios
2.1 Profitability Ratio
2.11 Gross profit margin
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According to the annual reports, total sales income of The Reject Shop for last three years is $ 353,266, 000, $ 412,328,000 (Annual Report, 2009,p.28 )and $ 470,826,000 (Annual Report, 2010, p. 31)) respectively. The cost of goods sold in 2008 is $ 184,857,000, $ 221,994,000 for year 2009 and $ 249,774,000 for year 2010. Then we can calculate that The Reject Shop has the highest gross profit margin in 2008 which...