KMD Kathmandu Limited Company Analysis

Published: 2021-07-06 06:27:41
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Kathmandu holding Limited is an outdoor retailer specialist company which is involved in the retailing, designing and marketing of clothes and manufacture equipment both for traveling and adventurous trip. The Company is operational in Australia, New Zealand, and the UK. The Company is offering a variety of clothing which includes waterproof jackets, down jackets and other products. The Company has 108 operational stores in Australia, 45 operational stores in New Zealand and 5 operational stores in the U.K. The Company’s affiliates companies include Milford Group Holding Limited, Kathmandu Limited. Kathmandu Pty Limited and Kathmandu (UK) Limited respectively.Sales Analysis:Kathmandu Holdings Limited stated the sales of 425.59 million New Zealand Dollars (US$307.51 million) for the financial year finishing July of 2016. This signifies an increase of 4.0% then in 2015 when the company’s sales were 409.37 million New Zealand Dollars. Sales at Kathmandu Holdings Limited have improved during each of the preceding five years (and since 2011, sales have increased a total of 39%). This increase in sale results in the increase of share price, total assets and revenue for the company as shown in the below graph. (“Kathmandu Holdings Ltd, KMD: NZC financials – FT.com,” n.d.)Key Ratios of the Company:The Company is performing outstandingly in the last five years. Sales are increasing which results in the increase of share price and an overall increase of the assets. Below are few tables that are representing the key ratios of the company from 2014 to 2016.The Ratio of Sales of the CompanyMargins % of Sales2014-072015-072016-07Revenue100100100COGS36.8538.4737.41Gross Margin63.1561.5362.59SG&A62.97066.9R&D———Other-15.75-16.56-16.27Operating Margin16.018.111.96Net Int Inc & Other-0.82-0.66-0.84EBT Margin15.187.4311.12The ratio of the profit of the CompanyProfitability2014-072015-072016-07Tax Rate %29.3532.929.17Net Margin %10.734.997.88Asset Turnover (Average)10.981.01Return on Assets %10.754.877.95Financial Leverage (Average)1.351.371.34Return on Equity %14.146.6410.77Return on Invested Capital %12.945.949.78Interest Coverage13.38.2514.21Source: ( (“Results & Reports,” 2012)The Ratio of the balance sheet of the Company:Balance Sheet Items (in %)2014-072015-072016-07Total Current Assets28.130.7525.98Other Long-Term Assets1.590.922.49Total Assets100100100Short-Term Debt0.060.01—Other Short-Term Liabilities7.687.311.44Total Current Liabilities10.6410.6214.48Long-Term Debt15.316.4910.57Long-Term Liabilities0.050.110.15Total Liabilities2627.2125.2Total Stockholders’ Equity7472.7974.8Total Liabilities & Equity100100100Source: ((“OrotonGroup Ltd, ORL:ASX historical prices – FT.com,” n.d.)Ratio of the financial health of the companyLiquidity/Financial Health2014-072015-072016-07Current Ratio2.642.891.79Quick Ratio0.250.420.2Financial Leverage1.351.371.34Debt/Equity0.210.230.14Oroton Group LimitedOrotonGroup Limited is an Australian founded selling company. The Company’s segments include Oroton and Gap products. The Company is involved in the selling of leather products, fashion apparel, and other products under the OROTON product name. It is engaged in the selling of fashion clothing under the GAP label. It is also involved in certifying of the OROTON product name. The Company runs 80 stores in Singapore. China, Australia, New Zealand and Malaysia.(“OrotonGroup Limited – Retail,” n.d.)Key Ratios of the CompanyOroton Group has made a10 years of the franchise agreement with GAP in 2013 so that they can open new stores and could increase the share in casual clothing market of Australia.OrotonGroup’s GAP stores are in severe losses and lost an estimated amount of 1.3 million dollars in 2015 and 0.5 million dollars in 2016. It is expected that sales will decline by up to 10% in 2017 and the company has to bear the loss of 67.1 million dollars this year. This loss will mainly due to the low sales at stores at storesOroton’s same-store trades were declined for up to 11 per cent as compared to the 11 per cent increase in the previous corresponding period, while GAP same-store trades has fallen up to 12% as compared to 6.4 per cent increase in the previous year.Financial Summary of the Company 20162015 Year to 30 July 2016 – Reported$’000V000% changeStarting136.132.•3.3%EBITDA°’13.11.+18.6%EBITQl6.6.+10.5%Net profit after taxation3.2.620+31.4%Earnings per share (EPS) (cents)8.6.+31.5%Dividend per share (cents)9.006.50+38.5%Net (debt) / cash2816(6.) Source: ( (“OrotonGroup Ltd, ORL:ASX historical prices – FT.com,” n.d.)Total Assets of the Company:Note Consolidated 2015 $10002016 $’000Assets Current assets  Cash and cash equivalents 73.2.Trade and other receivables 85.7.Inventories 931.38.Derivative financial instruments 109899.Tax receivable 11381140Total current assets40,28856,393Non-current assets  Receivables 12 2.Derivative financial instruments 13 4.Property, plant and equipment 1410,81415.Intangibles 151,070671Deferred tax 163,542 Total non-current assets15.22.Total assets55,71478.150The Company earning and growing ratios:  EarningsP/E RatioP/B RatioP/E GrowthCompany05.410.950Market1.12171.481.78Sector0.5414.21.521.88     Comparisons of KMD Kathmandu and Oroton Group Limited:KMID Kathmandu is financially very strong as compare to Oroton Group Limited because its sales are continuously increasing for the last five years (5% increase of sale in last year), It assets are continuously increasing with the increase of sales whereas the sales of Oroton Group Limited is declining for the last many years. Company’s earnings are 0 and there sales ‘strategy is miserable failed which results in the loss of the company. The company is making new sale’s strategy with new products to attract young customers and introducing colorful and less expensive handbags,  jewelry, watches, key chains, fragrances and other products.The main focus of the company is to grow the Oroton brand by rebalancing outlet stores and by resetting the GAP brand and supporting the growth of Oroton’newest business.AppendixNet ProfitThe Net profit of a company is the total profit gained by the company after all the expenses including interests; taxes and depreciation are deducted from the total revenue. It is also referred as net income or net earnings. The formula to calculate the net profit is shown belowNet Profit = (Net Income) / (Sales Revenue)Asset turnover ratioThe assets turnover ratio is a ratio that measures the ability of the company to makes sales from its assets while comparing the net sales with the average of entire assets. It can also be defined as the how efficiently the company has the ability to use its assets to generate the sales.Asset Turnover Ratio = (Total sales of the company) / (Average Total Assets).The current ratioThe current ratio is the ratio that is used to analyses and examine the liquidity of the company and to measure the payable short term liabilities and the total short term assets. This financial ratio is used by the investors and analysts.Current Ratio = (Total current assets of the company) / (Total Current Liabilities)The quick ratioThe quick ratio is defined as the liquidity ratio that examines and measures how much is the company capable of paying the current liability. Quick assets are the assets that cannot be cashed in 90 days or in short period of time.Quick Ratio = (Total Cash + Total Cash Equivalents + total short term investments + total Current Receivables) / (total Current liabilities of the company).Debt ratioDebt ratio is the ratio that defines the fraction of company’s assets that are provided by mean of debt or loanDebt ratio = (Total Debts) / (Total Assets)BibliographyKathmandu Holdings Ltd, KMD: NZC financials – FT.com [WWW Document], n.d. URL https://markets.ft.com/data/equities/tearsheet/financials?s=KMD:NZC (accessed 8.30.17).OrotonGroup Limited – Retail [WWW Document], n.d. URL https://www.ibisworld.com.au/australian-company-research-reports/retail-trade/orotongroup-limited-company.html (accessed 8.30.17).OrotonGroup Ltd, ORL:ASX historical prices – FT.com [WWW Document], n.d. URL https://markets.ft.com/data/equities/tearsheet/historical?s=ORL:ASX (accessed 8.30.17).Results & Reports, 2012. Kathmandu Invest. Cent.

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