The objective for this assignment is for you to perform and interpret financial ratios, that is, provide ratio analysis of financial statements over a two year period (2011 through 2012) and together with all other relevant information, advise on these organisations as investment opportunities.
The Financial Analysis report discusses analyses and evaluates financials of Fantastic Holdings Limited (FHL) and Super Retail Group (SRG) so as to determine which among these two is better investment option. FHL and SRG are the retail giants of Australia. FHL is leading furniture manufacturer and retailer. It is the 3rd largest furniture retailer in Australia and is the largest sofa and mattress manufacturer. It operates with 125 stores in Australia. Whereas, SRG is a speciality retailer aimed at selling products that enhances customer’s leisure time such as sports goods and apparels, fishing and boating equipment, automotive parts and accessories, camping and tramping equipment and cycles. It is among the top 10 retailers in Australia with 585 stores in Australia alone. It also operates in New Zealand and China. Though, both these organizations are into retails but they offer different product ranges and are not into direct competition with each other. The report aims to analyse the financial ratio of these two companies by evaluating their performances in year 2012 as compared to that in 2011 on the grounds of profitability, efficiency and financial stability (both short and long term). Also, a comparative analysis will be done between these two companies so as to determine which one is a better investment option.
Analysis of Financial Performance
Below is the comparative financial analysis of both the companies on the parameters of profitability, efficiency and financial stability based on the financial results of 2011 and 2012.