Reference no: EM132973856
The Warehouse Group Limited (WHS), together with its subsidiaries, engages in the retail of general merchandise and apparel in New Zealand. It also sells stationery products, technology and appliance products, and sporting equipment. The company operates 93 The Warehouse stores, 70 Warehouse Stationery stores, 77 Noel Leeming stores, and 18 Torpedo7 stores, as well as online stores. In addition, it engages in the provision of financial, property, investment, and wholesale services. The Warehouse Group Limited was founded in 1982 and is based in Auckland, New Zealand.
- WHS's 2020 financial year ends on 2 August 2020.
- Extract of The Warehouse Group's 2020 Annual Report is attached.
- WHS's weighted average number of ordinary shares on issue is 345,286 thousand.
- The New Zealand corporate tax rate is 28 percent.
- The market value per share for WHS is 3.76 NZD.
Required:
Provide a brief explanation what these ratio analysis imply about the company's performance during the financial year ending 2 August 2020.
The explanation should be directly related to relevant aspects as follows.
Problem 1. How well WHS utilises various assets.
Problem 2. WHS's ability to pay short-term financial obligations as they come due.
Problem 3. WHS's ability to meet long-term financial obligations.
Problem 4. How well WHS generates operating profits and net profits from its sales.
Problem 5. How WHS is valued by the market.
The following ratio analysis for WHS for the financial year ending 2 August 2020
1) Receivable turnover : 36.27
2) Inventory turnover: 4.69
3) Payable turnover: 5.21
4) Current ratio: 1.03
5) Gross profit margin: 0.33
6) P/E: 29.15
7) P/B: 3.45
8) Financial leverage: 3.39