JB Hifi Marketing Analysis Essay Oz Assignments

JB Hifi Marketing Analysis Essay Oz Assignments

JB Hifi Marketing Analysis Essay Oz Assignments

Part A

Sr no.

Particulars

Amount

1

Cash and cash equivalents

72.8

2

Inventories

859.9

3

Sales revenue

562.8

4

Other income

2.0

5

Plant and Equipment

208.2

6

Interest Expense (finance costs)

10.7

7

Sales and marketing expense

580.1

8

Occupancy expenses

248.6

9

Trade and other payables

647.8

10

Borrowings (non-current)

558.8

 

 

2. 

Sr no.

Particulars

Normal Balance

Effect due to decrease

1

Cash and cash equivalents

23.5

DEBIT

2

Inventories

257.2

DEBIT

3

Sales revenue

4383.2

CREDIT

4

Other income

6.4

CREDIT

5

Plant and Equipment

35.2

DEBIT

6

Interest Expense (finance costs)

10.5

DEBIT

7

Sales and marketing expense

546.6

DEBIT

8

Occupancy expenses

183.5

DEBIT

9

Trade and other payables

322.6

CREDIT

10

Borrowings (non-current)

7.9

CREDIT

 

(Source: JB HI FI, 2018)

Part B

1 The different types of revenues generated by the consolidated group are through the sale of the goods industrial marketing and the services, commissions made by the group and rendering of the services to the clients and the customers. The current value of these types of the revenues is 5628 and the other income includes the amount of the 1230.5 (JB HI FI, 2018).

2 The group assets are classified as current assets and non-current assets. The bifurcation of the assets is outlined below with respect to its current values (Frino, Hill and Chen, 2015).

BIFURCATION OF THE ASSETS

 

2017

Current assets

 

 

 

Cash and the Cash equivalents

72.8

Trade and other receivables

 

196.6

Inventories

 

 

859.9

Other current assets

 

41.4

 

 

 

 

1170.7

Non-current assets

 

 

 

Plant and Equipment

 

208.2

Differed tax Assets

 

 

-

Intangible assets

 

 

1026.6

Other non-current assets

 

46.8

 

 

 

 

1281.6

 

 

 

 

 

3 The major categories that are listed among the group’s equity are as follows. The ordinary shares of the JB hi-fi Limited at the end of the financial year are $105572 which is fully paid ordinary shares and the executive share options $322105.

Shareholders’ Equity

Amount

Contributed Equity

 

438.7

Reserves

 

 

33.2

Retained Earnings

 

381.6

 

 

 

 

Total Shareholders’ Equity

853.5

 

 

   

(Source JB HI FI, 2018)

The current liability of the group is 885.8.

B The final dividend declared by the JB Hi fi is 118 cents per share amongst which the fully franked dividend is 46 cents per share. Therefore if only 100 shares of ordinary nature are owned in the JB HI FI Limited than the amount of the dividend will be 46 cents per share (JB HI FI, 2018).

C If the amount of the interim dividend is added to the current year’s dividend per share the total amount of the dividend is summation of (63+46) which equals to 109 per share (CHEN, 2017).

D The last year dividend which is paid in the current year period is 72 per share (CHEN, 2017).

E The dividend per share of the JB HI FI is 46 per share and the earnings per share of the company are given below. The earnings per share ratio gauges how profitable the company is per share of the stock and the dividend per share determines the amount of the dividends received per share basis (JB HI FI, 2018).

Earnings per share

 

 

2017

 

 

 

 

 

Net Income

 

 

 

172.4

Weighted Average Equity shareholders

619.75

 

 

 

 

0.28

 

 

 

 

 
 

Dividend Pay-out Ratio

2017

 

 

 

 

Dividends

 

 

46

Net Income

 

172.4

 

 

 

 

 

 

 

27%

 

 

 

 

The dividend pay-out ratio of the company is 27%.

Part C

1 The subsidiary company of the JB HI FI Group is The good guys.

2 The value of the group sales revenue for the current and the previous year is outlines below.

Sales Value

2016

2017

% change

 

 

3.95

5.63

43%

 

 

 

 

 

3 The value of the group’s final profit revenue for the current and the previous year is outlines below.

Final Profit

2016

2017

% change

 

 

152.2

172.4

13%

 

 

 

 

 

4 After analysing the comparison the final profit of the company has increased only because of the revenue increased from 3.95 to 5.63 in the year 2017. The percentage change of the 43% in the change of the revenue is because the JB HI FI is engaged in innovation and the diversification of the products and this approach provides the opportunities for the company to increase the revenues and the profits. The company has also increased the volume of sales through the opening up of the stores (Vasarhelyi, Kogan and Tuttle, 2015).

5 The inventories of the financial year of 2016 and the year 2017 are presented below.

Inventories

2016

2017

% change

 

 

546.4

859.9

57%

 

 

 

 

 

The percentage change in the value of the inventories is 57% and the same has been reported due to the purchase of the more goods and the products. Moreover the higher bunch of the inventory indicates the out flow of the cash and hence the company needs to sell out the stock more which will not only improve the revenue but also enhance the productivity of the organisation (Mainini, and Moretto, 2017).

6 The profit margin ratio of the JB hi fi company is 31% and the return on equity is 41% which is a major crystal of the company and hence the company is performing outstandingly (Joshi, 2015).

Profit margin ratio

 

2017

 

Net profit

 

17240000

 

 

Sales

 

56300000

31%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventory turnover ratio

 

 

Inventory * 365

8599000

55.7484

 

Sales

 

56300000

 

 

 

 

 

 

 

Profitability ratios

 

 

2013

 

 

 

 

 

Profit margin ratio

 

 

 

 

 

 

 

 

Net profit

 

 

11640000

35%

Sales

 

 

33100000

 

 

 

 

 

 

Return on Equity

 

 

 

 

 

 

 

 

Net Income - Dividends

11640000

41%

Shareholders’ Equity

28090000

 

 

 

 

 

 

References

1. Benson, P., (2014) Sharing is caring. Electrical Connection, (Autumn 2014), p.132.
2. CHEN, Y., (2017) Estimation of Stock Price: A Case Study of JB Hi-Fi Limited. DEStech Transactions on Social Science, Education and Human Science, (msie). pp. 36-42.
3. Frino, A., Hill, A. and Chen, Z., (2015) Introduction to corporate finance. London: Pearson Higher Education AU.
4. JB HI FI, (2018) Annual report [Online] Available from file:///C:/Users/Manita/Downloads/2666012_1244948281_Annual-Report-2017%20(2).pdf [Accessed on 27th September 2018]
5. Joshi, M., (2015)Divergence between Operating Profit and EBIT. United States: John Wiley & sons
6. Mainini, A. and Moretto, E., (2017)Extending Yagil exchange ratio determination model to the case of stochastic dividends. New York: Springer
7. Vasarhelyi, M.A., Kogan, A. and Tuttle, B.M., (2015)Big Data Management in accounting: An overview. Accounting Horizons29(2), pp.381-396.