Zara Case

MZ 530. Financial Systems & Supply Chain Management Homework #4 Deadline: See Stellar website Instructions: • Each team should submit only one file (pdf format) with one solution. The name of the file submitted should be “MZ530 HW4 Name1 Name 2” • • Tasks: The goal of this problem is to compare two firms using information from financial statements to assess similarities and differences regarding operations competitive strategies. The two firms are H&M and Inditex, two of the largest firms in the fashion industry in the world. If you are not familiar with these firms’ competitive strategy, you may want to devote some time to find out about their basic strategy, focusing on what they do differently, especially at the operations level. Then try to see if operations strategy is somehow reflected in the financial statements. You will have to find Inditex and H&M’s annual report for the last 3-4 years (do not spend money on that, though). Attach to the write-up the financial statements that you use. If you do not obtain better information, assume that VAT = 16%. Use the guidelines/questions provided below as reference. 1. Calculate and compare growth for both firms. 2. Compare basic ratios, as Inventory Turns, WC, WCR, CCC, ROE, ROA, GMROI. 3. Perform break-up analyses for ROE, ROA, GMROI. Do break-ups provide additional information? 4. Specifically, compare the sourcing strategy and their implications (e.g., lead-time) for both firms. Can you find evidence of the differences using information from the financial statements (e.g. ratios)? 5. Draw your conclusions. Teams for this homework: See Stellar website Length of the write-up should not exceed 1,000 words. You may attach as many exhibits as you want. PLEASE WRITE YOUR NAMES AT THE BEGINNING OF THE WRITE-UP