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COMM1140 Group Assignment Report
Evidence Based Problem Solving (University of New South Wales)
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Evidence Based Problem Solving (University of New South Wales)
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GROUP ASSIGNMENT COVER SHEET
Course: COMM1140
Tutorial Time and Number:
2-4pm Tutor Name:
Harry Han
Company Name:
Harvey Norman
We declare that this assessment item is our own work, except where acknowledged, and has not been submitted
for academic credit elsewhere, and acknowledge that the assessor of this item may, for the purpose of assessing
this item:
Reproduce this assessment item and provide a copy to another member of the University; and/or,
Communicate a copy of this assessment item to a plagiarism checking service (which may then retain a copy
of the assessment item on its database for the purpose of future plagiarism checking).
We certify that we have read and understand the University Rules in respect of Student Academic
Misconduct.
zID
Name
Signed
Date
z5368005 Olivia Locke-Stevens
Olivia Locke-Stevens
8/11/2021
z5389846
Carmen Chit Kai Wen
Carmen
8/11/2021
z5368244
Jefrey Li
Jefrey
8/11/2021
z5362305 Sanjith De Silva
Sanjith
8/11/2021
z5359176
Paj Sae-lim
Paj Sae-lim
8/11/2021
This assignment cover sheet is valid only with your digital signature
. The cover sheet is to be provided with any
print or digital submission of the assignment. No marks will be released until a signed cover sheet is received.
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1.
Introduction
Operating as a subsidiary of Harvey Norman Holdings Ltd, Harvey Norman is an iconic Australian retailer which sells
consumer-grade electronics and audio-visual equipment. With over 193 physical locations around Australia. As of
2021, they have an EBITDA of $1.457 Billion, it has a strong presence in the competitive electronics retail market in
Australia. Emerging from the strong economic tailwinds of the 1990s, Harvey Norman adopted the unique “superstore” format of
retail found in the United States. By having multiple brands and options available to consumers, they began to rapidly
grow with sales in the double digits. Their success attracted direct investments and support from distributors such as
Merisel, Tech pacific and Dataflow. In 1905, vendors such as Microsoft, Corel and Symantec began to directly fund
and supply this growing tech retailer, giving them a price advantage over other competitors in the technology retail
sector. While Harvey Norman is a mostly ‘brick-and-mortar’ reliant company, it has begun diversifying into the online
retail sectors, as increasing market pressures from the online and direct-to-consumer models often adopted by
technology-oriented companies today have eaten away at Harvey Norman’s market share. 2.
Financial Analysis of Harvey Norman
Substantial demand for electronics and Harvey Norman’s adaptability to new market conditions drove the profits for
Harvey Norman upwards. To prove this, Harvey Norman in 2021 has produced a 30.59% profit margin, an immensely
impressive increase from 18.31% in 2019. This is impressive as when it is compared with the profit margin of
competitor JBHIFI in 2021, theirs is 5.67%. By noticing the return on equity ratios - 12.94% in 2018, and 21.75% in
2021, there is an indication of the level of efficiency that Harvey Norman possesses to generate income/growth from
the contributed shareholder investments. In the three-year period between 2018 and 2021, Harvey Norman’s ROE
(return on equity) almost doubled - indicating management’s utility of equity finance is succeeding in regard to self-
performance. However, by comparing this with JB HIFI, ROE of 38.68% in 2021 is found - outperforming Harvey
Norman. JBHIFI is carefully and strategically making use of their shareholders accumulated investments. The positive
data in these ratios indicate that Harvey Norman has reached a level of success regarding financial performance. The
coronavirus has impacted in favour to Harvey Norman. It’s ROE and profit margin have dramatically increased over
the 2020 and 2021 periods. The dramatic profit margin between JBHIFI and Harvey Norman may pertain to the wider
variety of goods sold by Harvey Norman (homewares, as well as electronics). Multiple market segments of goods are
highly saturated in terms of sales shortly following the onset of the coronavirus. Harvey Norman sells most of these
goods. Looking at the activity ratios for Harvey Norman, the movement of stock and inventory is shown to be much slower
than competitors in similar industries. Sitting at an average of 3.87 times over the four years, the asset turnover rate of
HVN paints a picture of Harvey Norman relying on higher prices rather than faster inventory turnover rates. This is
furthered when compared to the significantly higher turnover rates of 9.05 over two years from JB HIFI. This stark
difference between the two companies could be due to HVN’s wider variety of inventory of which have higher profit
margins but have lower turnover rates. While JB HIFI’s strict focus on electronic goods and accessory allow them to
shift inventory faster. This analysis is furthered by the difference between the days in inventory for both companies
with HVN averaging 94.25 days in inventory over the past four-year period. JB HIFI meanwhile has over half the
number of days in inventory for their stock with an average of 45 days over two years. This represents inefficiencies
when it comes to the movement of merchandise when it comes to sales, it is a crucial factor for HVN to consider in
future. These activity ratios could also indicate a different business model between the two stores whereby JB HIFI
prioritises high volumes of sales at a lower profit margin while Harvey Norman prioritises lower sales volumes but at a
higher profit margin. 2
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The financial positions of Harvey Norman can be analysed with financial structure and liquidity ratios. Firstly,
looking at liquidity ratios which tells how easily a company can convert its assets into cash, we see that Harvey
Norman has a current ratio of 1.59 over an average of four years. In 2021, the current ratio fell from 1.65 in 2020 to
1.51 indicating that the effects of the pandemic have not yet truly been overcome by the company as their assets have
become considerably less available. This also suggests that they have less cash available to cover their short-term
liabilities, such as interest and short-term loans. Compared to JB HIFI, which has an average current ratio of 0.31 over
the past the past two years indicates that Harvey Norman has an above average current ratio. In the retail industry
which usually has an average current ratio of 1.31 means that Harvey Norman has more cash tied up in current
assets. This gives Harvey Norman a competitive advantage when it comes to riding out economic uncertainty. JB
HIFI’s increasing current ratio from 0.29 in 2020 to 0.33 in 2021 indicates JB HIFI is prioritising a cash buffer for more
economic uncertainty. The acid test ratio shows a similar story, Harvey Norman’s four-year average of 1.048 indicates
that they can secure short term liabilities with liquid assets. Having a stable quick ratio of 1.05 in 2020 and 1.01 in
2021, Harvey Norman still could fully pay off any current liabilities in case of any economic uncertainty. Compared to
JB HIFI, which has an average quick ratio of 0.385 over two years further supports the idea that JB HIFI leans heavily
on the quick movement of inventory and the ideas of a just-in-time inventory system. Again, JB HIFI is tracking
towards having a bigger buffer against economic uncertainty as the acid test ratio has increased from 0.36 in 2020 to
0.41 in 2021. Overall, compared to industry peers such as JB HIFI, Harvey Norman has much healthier liquidity ratios,
allowing them to ride out disasters such as the Covid pandemic giving them flexibility and adaptability.
The financial position can further be analysed through calculating financial structure ratios. The solvency of
Harvey Norman here is found. The debt to asset ratio for Harvey Norman over 2018 to 2021 is 35.82%, 33.37%,
40.34% and 41.66% respectively. The company is shown to be increasing in its reliance on debt over equity, from
2018 to 2021 to fund assets and operations - indicating to financers that the payment of loans may fail. JBHIFI in 2020
had a very high debt to asset ratio of 93.47% and lowered to 60% in 2021. By comparing this with Harvey Norman,
their solvency is at a better position. The leverage ratio is an indicator of how much equity finances assets. Over the
four-year period, Harvey Norman’s leverage has slightly increased from 1.56 times in 2018 to 1.71 times in 2021.
These leverage ratios are at a low level. Harvey Norman does not regularly use debt financing to improve profitability.
JBHIFI has high points of leverage: 2.85 times in 2020 and 2.48 in 2021. This suggests that they use debt financing to
improve profitability at neither a low nor high level. Harvey Norman is at an advantageous financial position to JBHIFI
as there is lower risk to financial services regarding supplying loans. Harvey Norman has an extremely strong financial position when compared with competitors such as JB HIFI,
their focus on maintaining healthy financial ratios gives them the unique opportunity to ride out the current economic
instability. These financial ratios have also revealed a fundamentally different philosophy in business strategy for the
two companies, making comparisons not particularly illuminating on the true operations of the two businesses. JB HIFI
seems to follow a business strategy of just-in-time inventory management which depends on high movement of goods
and lower mark-ups for lower profit margins, while Harvey Norman which has higher inventory turnover rates focuses
on higher markups and profit margins/sale. However, it seems that both companies are moving to secure their
positions to prepare for future economic turmoil as both are moving towards higher cash buffers to future proof
themselves. 3.
Risks from Key Management Personnel Report According to the Directors and CEO reports, three small-format franchised complexes were closed in Australia
during FY21 in West Wyalong (Sep-20), Coburg (Jan-21), and Cleveland (Jun-21), and this can be identified as a
market risk possessed by Harvey Norman. Market risk is the possibility that an entity will experience losses as a result
of factors affecting the overall performance of investments in financial markets on a macroeconomy level, which in this
3
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case could be the emergence of the Covid-19 global pandemic, which has limited the ability of local or overseas
stores to trade at normal capacity. The spontaneous temporary government-imposed closures and restrictions on
consumer mobility, as well as strict social distancing measures, may continue to impede trade facilitation, resulting in a
decrease in Harvey Norman's sales revenue and retained profit. In this context, these complexes typically have to
reduce the price of their products in order to clear their stocks, leading to a decrease in profit margin and gross
margin, taking into account the necessary costs to produce their goods and services. This indicates that the company
is making less money per dollar of sales, which reduces both the value of net profit and gross profit on the income
statement. As a result, Harvey Norman's financial performance will suffer at the hands of the perception that the firm is
not maximizing the use of its assets available from its primary mode of business to generate revenues, which might
also influence investor decisions as to the general well-being and economic health of Harvey Norman is heavily
influenced. Liquidity risk, on the other hand, is identified in the report, where the Chairman acknowledged a strong freehold
investment property portfolio and joint venture assets during FY21. Harvey Norman may face equity price risk; the risk
that arises from portfolio price volatility that may result in a decline in the portfolio value particularly during these times
of global economic downturn as well as interest rate risk that may reduce the equity in the company. Due to such risk,
it must consider its financial capabilities to keep up with repayments as well as other maintenance and reimbursement
costs. Therefore, its current ratio and quick ratio will decline as it may face the issue of paying its short-term liabilities
by equipping the assets that are readily convertible into cash. Moreover, a significant increase in the net asset value
signifies that Harvey Norman may have a large cash surplus. Although it makes sense for a business to maintain
some liquid assets on hand, the rest of its earnings should be put to better use, such as strengthening and expansion
of the company. A large cash balance could also be used to pay off debts or make investments that will pay off in the
future. As a result of HVN's financial management risk, the value of return on equity and asset turnover ratio will be
reduced.
4.
Enterprise Value & Equity Multiples of Harvey Norman, JB Hi-Fi & Nick Scali
a)
The valuation range found through comparable analysis by using EV and Equity multiplies determined that the
firm's market value is $461.73M to $12,528M. This results in a share price range of $0.37 to $10.05. As a result, this
analysis determined a midpoint valuation of $6,494.87M with a share price of $5.21. All data were collected through
Yahoo Finance with supplementary data collected through the individual company's annual reports. Figures all related
to FY2021 in order to ensure the reliability and consistency of the comparable analysis. b)
To determine the two most similar companies - between Harvey Norman, JBHI-FI and Nick Scali - a comparison of
EV/Equity and EV/EBITDA multiples, market capitalization and other factors such as management, marketing,
customer base and demographic must be considered. To initiate, we start comparing at the most fundamental yet important level, the market capitalization. Harvey
Norman has the highest of the three at $6.36B, closely followed by JBHIFI at $5.77B, and Nick Scali with $1.25 billion
- 22% of JB HI FI. This big disparity of their market cap, despite their relatively similar stage in the business growth
cycle, due to their close establishment date; with Harvey Norman established in 1982; JBHIFI established in 1974;
Nick Scali established in 1962; provides insight on the reputational growth that these companies have been able to
garner over the decades, with Nick Scali’s relatively small market capitalization of $1.25B heavily indicating it was still
in its growth stage, despite approaching 60 years of operations. This large disparity in market capitalization can also
be further attributed to the goods and services they offer, where over the past decade, technological demands has
been ever increasing. As such, unlike Harvey Norman or JB HI FI, who expanded into electronic goods and services,
Nick Scali remained solely in the furniture industry, thus preventing them from tapping into this booming sector.
4
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Additionally, this limited product line offering has led Nick Scali to target the middle to older aged demographic, where
spending is less frequent and in much smaller increments.
To further discern which are the two companies are most similar, a deeper analysis must be made through a
comparable valuation analysis. By using the P/E multiple, we can compare the firm’s ability for earnings to generate
market value for equity holders. Where a high P/E ratio indicates a possible over-evaluation or a high expectancy of
good growth in the future. Utilising JB HIFI’s P/E multiple of 11.3, we can attain a market cap of $9.5B for Harvey
Norman. Whereas utilising Nick Scali’s P/E multiple of 14.9, Harvey Norman’s market cap rises to $12.5B. With
Harvey Normans market cap being 6.36B, the large disparities in market capitalization highlights how different Nick
Scali is from Harvey Norman, with its market capitalization prediction being more than twice as different as JBHIFI’s.
Furthermore, the similarity between Harvey Norman and JBHIFI can be seen when comparing their respective
EV/EBITDA multiple, with JBHIFI attaining a multiple of 6.1, and Harvey Norman achieving a multiple of 6.4. This
emphasises the similarities between these two companies and not to Nick Scali, where it’s EV/EBITDA multiple sits at
9.0. Thus, through the EV/EBITDA multiple and the relative difference between JBHIFI and Nick Scali’s Market cap
using their own P/E multiple, we can establish that between the three companies, JBHIFI and Harvey Norman are
most alike.
It is important however to consider a comparison in the management and operative structure of these
companies in order to draw further degrees of similarities and dissimilarities between them. Nick Scali and JB HIFI
utilises a chain-store model whereas Harvey Norman utilises a franchise model - in which franchisees are required to
pay the franchising fee along with the internal operative costs (goods and services). However, despite these
differences, they all participate within online marketing and services too, where the full range of products are still
available for purchase from at home. It is important to note, however, that Nick Scali's “online” presence has only been
available during 2020 and after, in which they had launched their online store, relatively late compared to other stores
and to Harvey Norman and JB HI FI. As such, based on the analysis of market capitalization and relative market capitalisation based on the PE ratio,
management and operational structures and its customer base alongside product offerings, Harvey Norman and JB HI
FI can be concluded to be the most similar between the three. This is then supported by the very similar EV/EBITA
ratio indicating the similar valuation of both JB HI FI and Harvey Norman.
c)
From the comparison done in part B it is clear that Harvey Norman is more similar to JB Hi-Fi than Nick Scali since
they are in the same industry and that their current market caps are very similar. Thus, to improve the accuracy of the
valuation it would be beneficial to remove Nick Scali’s figures from the valuation. However, despite the similarities
between Harvey Norman and Jb Hi-Fi there are some notable differences between the two companies. Harvey
Norman has a more diverse product range including outdoor goods, furniture, and barbeques, as well as operating in
6 more countries than JB Hi-Fi. This diversification in product range and more globalised reach allows Harvey Norman
to attract a wider target market, generating $2.13 Billion in offshore revenue, accounting for 25% of its sales. As a
result of this diversification, markets will view Harvey Norman as being a better investment with a higher growth
potential and thus would value it above JB Hi-Fi. To reflect this, it is reasonable to increase JB Hi-Fi’s multiples by 25%
to create a more appropriate valuation for Harvey Norman. After applying this the valuation range for Harvey Norman
is $577.16M to $12,011.19M with respective share prices of $0.46 to $9.61. This results in a midpoint valuation of
$6,294.18 with a share price of $5.04. This midpoint figure is very similar to Harvey Norman’s current market cap of
$6,350M.
5.
Recommendation 5
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Harvey Norman, which has been heavily impacted by the global pandemic, has seen its current ratio and quick ratio
decline in FY21. However, Harvey Norman's EBITDA rises by $512.5 million to $1.5 billion in FY21, while the PBT
reported soars to $1.18B in FY21 from $6661,288 million in FY20. This signifies that Harvey Norman can cover its
operating costs and still have a decent amount of revenue left over, which can be used to repay the loan provided by
Felicity Trust. Furthermore, an increase in cash flow directed toward investing activities such as the purchase of
property, plant, and equipment implies that Harvey Norman will receive a higher payoff in terms of sales revenue and
net profit in the future because it provides the company with the resources needed to manufacture its products. An
increase of its debt-to-equity ratio and a rise in its offshore retailed PBT also shows that Harvey Norman maintains a
sustainable and strong financial performance and position, as well as its high creditworthiness in FY21. As a result of
its strong financial health, Felicity Trust should continue to provide loans to Harvey Norman in 2022.
References:
Corporate
Finance
Institute.
2021.
Return
on
Equity
(ROE)
.
[online]
Available
at:
<https://corporatefinanceinstitute.com/resources/knowledge/finance/what-is-return-on-equity-roe/>
[Accessed
11
November 2021].
Investopedia.
2021.
Market
Risk
Definition
.
[online]
Available
at:
<https://www.investopedia.com/terms/m/marketrisk.asp> [Accessed 11 November 2021].
Investors.jbhifi.com.au.
2021.
Appendix
4E
Preliminary
Final
Report
.
[online]
Available
at:
<https://investors.jbhifi.com.au/wp-content/uploads/2021/08/Appendix-4E-and-Financial-Report-2021-Full-Year.pdf
>
[Accessed 14 November 2021].
Finance.yahoo.com. 2021.
Yahoo is part of the Yahoo family of brands
. [online] Available at:
<https://finance.yahoo.com/quote/hvn.ax/key-statistics?p=HVN.AX> [Accessed 12 November 2021].
Finance.yahoo.com. 2021.
Yahoo is part of the Yahoo family of brands
. [online] Available at:
<https://finance.yahoo.com/quote/JBH.AX?ltr=1> [Accessed 12 November 2021].
Finance.yahoo.com. 2021.
Yahoo is part of the Yahoo family of brands
. [online] Available at:
<https://finance.yahoo.com/quote/NCK.AX?p=NCK.AX&.tsrc=fin-srch> [Accessed 12 November 2021].
My Accounting Course. 2021. What is Property, Plant, and Equipment (PP&E)? - Definition | Meaning | Example
.
[online] Available at: <https://www.myaccountingcourse.com/accounting-dictionary/property-plant-and-equipment>
[Accessed 14 November 2021].
Nick
Scali
Limited.
2021.
2021
ANNUAL
REPORT
.
[online]
Available
at:
<https://www.nickscali.com.au/media/wysiwyg/Investor_Info/NCK_AnnualReport_2021_1.pdf>
[Accessed
10
November 2021].
Static1.squarespace.com.
2021.
2021
ANNUAL
REPORT
.
[online]
Available
at:
<https://static1.squarespace.com/static/54803162e4b08e1b8a472201/t/6155022c17c58265bebc3353/163296116742
2/Annual+Report+to+Shareholders+2021.pdf
> [Accessed 10 November 2021].
6
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Static1.squarespace.com.
2019.
2019
ANNUAL
REPORT
.
[online]
Available
at:
<https://static1.squarespace.com/static/54803162e4b08e1b8a472201/t/5dac405a64fbcd1ae7b3bd58/1571569849947
/HVN+2019+Annual+Report.pdf
> [Accessed 10 November 2021].
Treece, K., 2021. 5 Personal Loan Requirements To Know Before Applying
. [online] Forbes Advisor. Available at:
<https://www.forbes.com/advisor/personal-loans/personal-loan-requirements/> [Accessed 14 November 2021].
Appendix:
Table 1: Harvey Norman Ratio Calculations
Ratio
Year
Calculation
Ratio
Year
Calculation
Return on equity
(Profit after tax
/ total equity)
2021
= 846845000 / 3893019000
= 0.21752912071
21.75%
≅
Gross margin
(Gross profit / sales of products to customer
s)
2021
= 929963000 / 2768328000
= 0.33592948523
33.59%
≅
2020
= 486023000 / 3477325000
= 0.13976921915
13.98%
≅
2020
= 739642000 / 2294913000
= 0.32229631362
32.23%
≅
2019
= 409002000 / 3197793000
= 0.12790133695
12.79%
≅
2019
= 723385000 / 2234118000
= 0.32378996991
32.38 %
≅
2018
= 380050000 / 2937932000
= 0.12935969927
12.94%
≅
2018
= 667421000 / 1993760000
= 0.33475493539
33.48 %
≅
Return on assets
(Profit after tax
/ total assets)
2021
= 846845000 / 6672934000
= 0.12690744431
12.69%
≅
Profit margin
(Profit after tax/sales of products to customer
s)
2021
= 846845000 / 2768328000
= 0.30590486387
30.59%
≅
2020
= 486023000 / 5828602000
= 0.08338586165
8.34%
≅
2020
= 486023000 / 2294913000
= 0.21178275603 21.18%
≅
2019
= 409002000 / 4798744000
= 0.08523105212
8.52%
≅
2019
= 409002000 / 2234118000
= 0.18307090314
18.31 %
≅
2018
= 380050000 / 4577642000
= 0.08302309354
2018
= 380050000 / 1993760000
= 0.19061973356
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8.30%
≅
19.06 %
≅
Asset turnover
(Sales of product
s to custome
rs / total
assets)
2021
= 2768328000 / 6672934000
= 0.41485919087
0.41 times
≅
Inventory turnover
(Cost of sales / inventorie
s)
2021
= 1838365000 / 479093000
= 3.83717775046
3.84 times
≅
2020
= 2294913000 / 5828602000
= 0.39373300836
0.39 times
≅
2020
= 1555271000 / 391984000
= 3.96769000776
3.97 times
≅
2019
= 2234118000 / 4798744000
= 0.46556307233
0.47 times
≅
2019
= 1510733000 / 395965000
= 3.81531953582
3.82 times
≅
2018
= 1993760000 / 4577642000
= 0.43554301537
0.44 times
≅
2018
= 1326339000 / 345287000
= 3.84126538213
3.84 times
≅
Days in inventor
y
(365 / inventor
y turnover
)
2021
= 365 / 3.83717775046
= 95.121994272
95.12 days
≅
Current ratio
(Current assets / current liabilities)
2021
= 1726576000 / 1145061000
= 1.507846307
1.51 times
≅
2020
= 365 / 3.96769000776
= 91.9930738759
91.99 days
≅
2020
= 1298331000 / 785444000
= 1.65298990125
1.65 times
≅
2019
= 365 / 3.81531953582
= 95.6669543857
95.67 days
≅
2019
= 1456340000 / 899108000
= 1.6197609186
1.62 times
≅
2018
= 365 / 84126538213
= 95.0207714619
95.02 days
≅
2018
= 1317618000 / 829964000
= 1.58756042431
1.59 times
≅
Quick ratio
((Cash and cash equiv. + trade and other receivab
les + 2021
= (264431000+889201000+0) / 1145061000
= 1.007485191
1.01 times ≅
Debt-to-
equity ratio
(Total liabilities /
total equity)
2021
= 2779915000 / 3893019000
= 0.71407 0.71 times
≅
2020
= (313195000 + 511579000 + 0) / 785444000
= 1.05007358895
1.05 times
≅
2020
= 2351277000 / 3477325000
= 0.67617407058 0.68 times
≅
2019
= (215048000 + 741862000 + 0) / 899108000
2019
= 1600951000 / 2937932000 8
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short-
term investm
ents) / current = 1.06428816116
1.06 times
≅
= 0.54492445706
0.54 times
≅
2018
= (170544000 + 724690000 + 0) / 829964000
= 1.07864196519
≅
1.07 times
2018
= 1639710000 / 2937932000
= 0.5581170701
0.56 times
≅
Debt-to-
asset ratio
(Total liabilities
/ total assets)
2021
= 2779915000 / 6672934000
= 0.41659560846
41.66%
≅
Leverage ratio
(Total assets / total equity)
2021
= 6672934000 / 3893019000
= 1.71407691563
1.71 times ≅
2020
= 2351277000 / 5828602000
= 0.40340325175
40.34 %
≅
2020
= 5828602000 / 3477325000
= 1.67617407059
1.68 times
≅
2019
= 1600951000 / 4798744000
= 0.33361875524
33.37 %
≅
2019
= 4798744000 / 2937932000
= 1.63337476837 1.63 times
≅
2018
= 1639710000 / 4577642000
= 0.35819970194
35.82 %
≅
2018
= 4577642000 / 2937932000
= 1.5581170701
1.56 times
≅
Table 2 : JB Hi-Fi Calculations
Ratio
Year
Calculation
Ratio
Year
Calculation
Return on
equity
(Profit after tax / total equity)
2021
506.1m/1308.4m
= 0.3868083155
=38.68%
Gross margin
(Gross profit / sales of products to customer
s)
2021
1325.2m/8916.1m = 0.148630006
= 14.86%
2020
302.3m/1105.7m = 0.273401465
= 27.34%
2020
1169.0m/7918.9m = 0.147621513
= 14.76%
Return on
assets
(Profit after tax / total assets)
2021
506.1m/3244.3m = 0.155996671
= 15.59%
Profit margin
(Profit after tax/sales of products to customer
s)
2021
506.1m/8916.1m = 0.0567624858
= 5.67%
2020
302.3m/3142.3m = 0.0962034179
= 9.6%
2020
302.3m/7918.9m
= 0.0381744939
= 3.81%
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Asset turnover
(Sales of products to customer
s / total assets)
2021
8916.1m/3244.3m = 2.74823537
= 2.74 times
Inventory turnover
(Cost of sales / inventorie
s)
2021
6938.9m/938.8m
= 7.39124414
= 7.39 times
2020
7918.9m/3152.3m = 2.51210227
= 2.51 times
2020
7918.9m/739.3m
= 10.7113486
= 10.71 times
Days in inventory
(365 / inventory turnover)
2021
365/8.3 times = 43.9759036145
= 43.98 days
Current ratio
(Current assets / current liabilities)
2021
263.2m/777.4m = 0.338564446
2020
365/7.7 times = 47.4025974026
= 47.4 days
2020
251.5m/854.1m
= 0.294462007
Quick ratio
((Cash and cash equiv. + trade and other receivabl
es + short-
term investme
nts) / current liabilities)
2021
263.2m+59.8m/ 777.4m = 0.415487523
Debt-to-
equity ratio
(Total liabilities /
total equity)
2021
1946.9m/1308.4m = 1.48800061
2020
251.5m+59.7m/854.1m = 0.364360145
2020
2046.6m/1105.7m = 1.85095415
Debt-to-
asset ratio
(Total liabilities /
total assets)
2021
1946.9m/3244.3m = 0.600098635
= 60%
Leverage ratio
(Total assets / total equity)
2021
3255.3/1308.4m
= 2.48800061143
2020
2946.6m/3152.3m = 0.934746058
= 93.47%
2020
3152.3/1105.7m = 2.85095414669
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Figure 2.1: Valuaton Tables: Equity Multples
Figure 2.2: Valuaton Tables : EV Multples
Figure 2.3: Valuaton Ranges and Midpoint Valuaton
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