BUSINESS PLAN

Warehouse

The Ware House

Introduction

The “Ware House” is one of the largest retailers in New Zealand. The company is widely known for its broad range of products ranging from, entertainment, clothing, sporting, technology gardening, grocery to music and many others. The company has a long history of serving the people since the year 1982. The company is currently operating 86 retails stores throughout New Zealand with a team of more than 8500 employees. The company reported a profit of $85.2 million and sales of $1.72 billion for the 53rd week ended on 2nd august 2009.

Discussion

Financial ratios are the numbers that have certain connotations in the analysis of financial statements. These ratios are calculated by dividing two numbers (two items) were present in the financial statements. These figures May be taken numbers from the budget or income statement or cash flow statement or taken a number from the list, and the other figure is taken from another list. It is rare that the figures are taken from the list of shareholders1. These figures are used to determine the company's profitability and financial capacity over a period of time. Financial ratios are useful marker of a firm's act of leading, performance and monetary state of affairs. Most ratios can be considered from sequence and data information provided by the statements at the year end. Financial ratios can be interpreted to examine trends and to evaluate the firm's financial to folks. In some cases, ratio analysis can predict future bankruptcy.

Profitability Ratios

Return on Assets Ratio

=

Net Income

 

 

Average Total Assets

 

 

 

Return on Equity Ratio

=

Net Income

 

 

Average Owners' Equity

 

 

 

Profit Margin Ratio

=

Net Income

 

 

Total Sales

 

 

 

Basic Earnings Power Ratio

=

Earnings Before Interest and Taxes

 

Total Assets

 

 

 

Earnings per Share Ratio

=

Net Income

 

 

Average Number of Common Shares

(2009)

(2010)

Return on Assets Ratio

0.09

0.12

 

 

 

Return on Equity Ratio

0.2

0.29

 

 

 

Profit Margin Ratio

0.04

0.04

 

 

 

Basic Earnings Power Ratio

0.19

0.18

 

 

 

Earnings per Share Ratio

2.42

3.08

The profitability analysis of the company's financial performance of the year 2010 and 2009 has shown a slight decline with decrease in different ratios. The return on assets ratio of the company has decreased from 0.12 to 0.069 which is a negative aspect for the company. The return on equity ratio has also decreased from 0.29 to 0.2 whereas the profit margin for the year 2010 is unchanged at 0.04. The basic earnings power ratio has also increased from 0.18 to 0.19 which is a positive outlook. The earnings per share ratio of the company have also decreased from 3.08 to 2.42.

Liquidity Ratios

 

 

 

Current Ratio

=

Current Assets

 

 

Current Liabilities

 

 

 

Quick Ratio

=

Current Assets - ...