Skip to content

blogs of moodle monkey assignment help

Abstract

Jb Hi Fi Company is founded by John Barbuto. It is a type of retail industry founded 45 years ago in 1974 at Keilor East, Victoria, Australia. This company mainly deals in the products related to customer electronics, major appliances such as domestic appliance for cooking and washing laundry, for food preservation etc and example of small appliances can be said as microwave oven, coffee makers etc. JB Hi Fi is the largest company of home appliances in Australia. It deals in Computers, tablets, mobile phones, TVs and gaming multimedia. The Good Guys is the subsidiary of this company. JB HI FI is located nearly at 303 places including Australia and New Zealand. The headquarters of JB Hi Fi Company is in Tower Two of Vicinity Centre’s Chadstone Shopping Centre, Melbourne, Australia. Gregory Richards being a Chairman of the company and Richard Murray as the CEO forms the two key people of Jb Hi Fi. This company is publically traded in the Australian stock exchange named ASX: JBH. The company ranks 50 out of top 2000 companies running in Australia. All the other relevant information about the company can be referred through the official website of Jb Hi Fi Company https://www.jbhifi.com.au/.

I Introduction

Here we are going to know all about the success policies of JB HI FI. Its financial performance and income statements of the company. Jb Hi Fi is an Australian company, aw we know, one of the largest entertainment retailer of home products. The company deals with major appliances as well as small appliances in a variety of home appliances. Mobile phones, laptops, televisions, gaming microwave ovens, toaster JB Hi Fi are all examples of the company’s flagship and small appliances.

In this assignment, we will go over all the important and salient issues faced by the company in general, their adopted principles, the overall performance measures used, and the performance of the firm’s financial position of JB HI FI Company.  We will also analyse the structure of capital, their price to income ratio, non-assets of the company JB hi fi. These performances will set the standards for future targets for the company, will they be able to meet their goals and achieve success in the near future?

We will analyse the changing trends about the Jb Hi Fi Australian Company for the last three year financial ratios of the company. An in-depth study of the company’s performance analysis and success report will be seen. The company’s philosophy and system of work will predict the future. Jb Hi Fi as stated above in this assignment is the real and comparable figures according to the official website of the Australian company. We can get all the necessary information about the company from the company annual report. The referenced material has been updated in the year 2019.

Here we are also going to know the details about the liquidity position of Jb Hi Fi Australian Company. The prices of the shares are updated and regularly assured from the official website of JB HI FI COMPANY https://www.jbhifi.com.au.

II Financial Analysis of selected company

2.1 The key product for Jb Hi Fi Company is electronic household entertainment appliances –

JB Hi Fi Company in Australia deals in household or domestic products, major appliances as well as small appliances. Major appliances such as TVs, laptops are bigger in size and higher in value as compared to small appliances such as coffees machine and microwave oven (Tandon & Malhotra, 2013). The importance of the petroleum products in maintaining the comparative advantages of the company are listed below –

  • Safety – The Company properly maintained the safety measures in all the products. Provides healthy and safe working environment for all the employees working in the company. Fair behaviour and strict rules and regulations prevent accidents and ensure safety in the company.
  • Diversity – Jb Hi Fi Company has much line of products. They have diverse skills, background, and experience about policies. They are creative and innovative for products. They try to plan and make strategies for creating as well as promotion of the new product.
  • Social programs – Company contributes in Helping Hand weekly. Helping hand is the Registered Charitable Trust. This trust has been introduced so that employees donate a limited liability to charity.
  • Employee groups – Employee groups are formed for timely awareness and programs relating to the benefits of workplace leadership across Australian businesses.
    • Complete Disclosure – The director’s focus mainly on the forming up of different strategies and success paths. They want the customers to have the complete disclosure of all the relevant information about the company. Bank, investors, government or the interested parties.
  • Risk Identification and Management – The Company conducts the necessary operations for the company to identify the risk and manage between risk and reward.
  • E- Waste – All the E- Waste from different stores and operations for the support purposes are recycled. No wastage takes place by the store initiatives. They ensure the impact of wastage on the environment gets reduced with time.

Variable rewards incentives – the reward incentive under the VRP in the case of dishonesty and fraud, the board’s discretion will happen by the clawback. Misstatement of material, breach of material and in some circumstances the board shows negligence (Talari, et. al., 2017). Subject to this, a Group executive will not be eligible to receive VRPaward in respect of performance period.

Note – If, during that period, the executive cease to employed, or has given notice of his or her resignation from employment or has been given notice of termination from employment.

2.2 Identify and conduct a trend analysis with two groups of financial ratios, including liquidity and capital structure of the selected company.

BALANCE SHEET RATIOS
S. No, Particulars 2016-17 2017-18 2018-19  
1 Current  
Current Assets $              1,170.70 1.321630165 $              1,210.50 1.319777584 $              1,276.50 1.376874124
Current Liabilities $                  885.80 $                  917.20 $                  927.10
2 Quick
Cash + Accts. Rec. $                  269.40 0.304131858 $                  276.70 0.301679023 $                  355.20 0.383130191
Current Liabilities $                  885.80 $                  917.20 $                  927.10
3 Debt-to-Worth
Total Liabilities $              1,598.80 0.651959385 $                  947.60 0.5 $              1,044.10 0.5
0 Net Worth $              2,452.30 $              1,895.20 $              2,088.20
INCOME STATEMENT RATIOS: Profitability (Earning Power)
4 Gross Margin
Gross Profit $              1,230.50 0.218638948 $              1,470.10 0.214478503 $              1,527.10 0.215226981
Sales $              5,628.00 $              6,854.30 $              7,095.30
5 Net Margin
Net Profit Before Tax $                  172.40 0.030632552 $                  233.20 0.034022438 $                  249.80 0.035206404
Sales $              5,628.00 $              6,854.30 $              7,095.30
ASSET MANAGEMENT RATIOS: Overall Efficiency Ratios
6 Sales-to-Assets
Sales $              5,628.00 2.294988378 $              6,854.30 2.723743294 $              7,095.30 2.836871776
Total Assets $              2,452.30 $              2,516.50 $              2,501.10
7 Return on Assets
Net Profit Before Tax $                  259.20 0.105696693 $                  334.50 0.13292271 $                  358.90 0.143496861
Total Assets $              2,452.30 $              2,516.50 $              2,501.10
8 Return on Investment
Net Profit Before Tax $                  259.20 0.105696693 $                  334.50 0.176498523 $                  358.90 0.17187051
Net Worth $              2,452.30 $              1,895.20 $              2,088.20
ASSET MANAGEMENT RATIOS: Working Capital Cycle Ratios
9 Inventory Turnover
Cost of Goods Sold $            (4,397.50) -5.11396674 $            (5,384.10) -6.042082819 $            (5,568.20) -6.27968873
Inventory $                  859.90 $                  891.10 $                  886.70
10 Inventory Turn-Days
360                           360 0.418653332                           360 0.403995062                           360 0.405999774
Inventory Turnover $                  859.90 $                  891.10 $                  886.70
11 Accounts Receivable Turnover
Sales $              5,628.00 28.6266531 $              6,854.30 33.48461163 $              7,095.30 30.06483051
Accounts Receivable $                  196.60 $                  204.70 $                  236.00

Trends: 

  • Current Ratio is the important ratio of the company. It will show that how company will pay the current liabilities. It is comparatively similar in every year.
  • The ratio of liquidity will clear out that the company is viable to pay the liquid liabilities. It should be less than 1. The company is having good liquid ratios, and it is maintained in all the 3 years.
  • The ratio of net worth will clear out that at either company assets are justifying with the company equity or not. It should not be overvalued or undervalued. The company is also having similar net worth ratio in all the years.
  • The net margin will show the profitability of the company. It will shoe either company is profit making or not (JB HI Fi Group, 2019).
  • The return on assets will show that how much of the assets had been utilised. How much profit they are giving.
  • All the contribution in equity is from the shareholders, and it also comprises of the retained earnings and reserves.

2.3 Perform a non-current asset analysis

Carrying Amount end of the year 2016-17 2017-18 2018-19
Plant & Equipment 148.2 148.2 132.3
Leasehold Improvements 60 60 59.2
Depreciation 2016-17 2017-18 2018-19
Plant & Equipment 138.5 162.4 196.3
Leasehold Improvements 97.3 113.9 130.2
Carrying Amount beg. of the year 2016-17 2017-18 2018-19
Plant & Equipment 114.8 148.2 148.2
Leasehold Improvements 61.4 60 60

The fixed assets are consisting of the plant & equipment.
The life of the estimates is as follows:
Leasehold Property: 1 to 15 years
Plant and Equipment: 1.5 to 15 years
The impairment will be done as per the change in circumstances.

2.4 Perform a scenario analysis with data provided

Average selling price $                  25.00
Expected sale 450000
equipment cost $    2,500,000.00
Residual Value $       500,000.00
Working Capital $       800,000.00
Depreciation SLM
Variable cost $                  15.00
Fixed cost $       450,000.00
Discount rate 12%
Tax Rate 30%
Year 1year 2 year 3 year 4 year
Sales 11250000 11250000 11250000 11250000
Variable cost 6750000 6750000 6750000 6750000
Contribution 4500000 4500000 4500000 4500000
Fixed cost 450000 450000 450000 450000
Depreciation 500000 500000 500000 500000
Operating Profit 3550000 3550000 3550000 3550000
Tax 1065000 1065000 1065000 1065000
PAT 2485000 2485000 2485000 2485000
Depreciation 500000 500000 500000 500000
Working Capital 800000
Residual Value 500000
Free Cash Flows 2985000 2985000 2985000 4285000
Discounted Value 0.892857143 0.79719 0.71178 0.63552
Discounted Inflows 2665178.571 2379624 2124664 2723195
Outflow $    3,300,000.00
Inflow 9892661.302
NRV $    6,592,661.30
Average selling price $                  20.00
Expected sale 450000
equipment cost $    2,500,000.00
Residual Value $       500,000.00
Working Capital $       800,000.00
Depreciation SLM
Variable cost $                  15.00
Fixed cost $       450,000.00
Discount rate 12%
Tax Rate 30%
Year 1year 2 year 3 year 4 year
Sales 9000000 9000000 9000000 9000000
Variable cost 6750000 6750000 6750000 6750000
Contribution 2250000 2250000 2250000 2250000
Fixed cost 450000 450000 450000 450000
Depreciation 500000 500000 500000 500000
Operating Profit 1300000 1300000 1300000 1300000
Tax 390000 390000 390000 390000
PAT 910000 910000 910000 910000
Depreciation 500000 500000 500000 500000
Working Capital 800000
Residual Value 500000
Free Cash Flows 1410000 1410000 1410000 2710000
Discounted Value 0.892857143 0.79719 0.71178 0.63552
Discounted Inflows 1258928.571 1124043.367 1003610.149 1722254
Outflow $    3,300,000.00
Inflow 5108836.081
NRV $    1,808,836.08
Average selling price $                  25.00
Expected sale 360000
equipment cost $    2,500,000.00
Residual Value $       500,000.00
Working Capital $       800,000.00
Depreciation SLM
Variable cost $                  15.00
Fixed cost $       450,000.00
Discount rate 12%
Tax Rate 30%
Year 1year 2 year 3 year 4 year
Sales 9000000 9000000 9000000 9000000
Variable cost 5400000 5400000 5400000 5400000
Contribution 3600000 3600000 3600000 3600000
Fixed cost 360000 360000 360000 360000
Depreciation 500000 500000 500000 500000
Operating Profit 2740000 2740000 2740000 2740000
Tax 822000 822000 822000 822000
PAT 1918000 1918000 1918000 1918000
Depreciation 500000 500000 500000 500000
Working Capital 800000
Residual Value 500000
Free Cash Flows 2418000 2418000 2418000 3718000
Discounted Value 0.892857143 0.79719 0.71178 0.63552
Discounted Inflows 2158928.571 1927614.796 1721084.639 2362856
Outflow $    3,300,000.00
Inflow 8170484.222
NRV $    4,870,484.22
Average selling price $                  25.00
Expected sale 450000
equipment cost $    2,500,000.00
Residual Value $       500,000.00
Working Capital $       800,000.00
Depreciation SLM
Variable cost $                  29.80
Fixed cost $       450,000.00
Discount rate 12%
Tax Rate 30%
Year 1year 2 year 3 year 4 year
Sales 11250000 11250000 11250000 11250000
Variable cost 13410000 13410000 13410000 13410000
Contribution -2160000 -2160000 -2160000 -2160000
Fixed cost 450000 450000 450000 450000
Depreciation 500000 500000 500000 500000
Operating Profit -3110000 -3110000 -3110000 -3110000
Tax -933000 -933000 -933000 -933000
PAT -2177000 -2177000 -2177000 -2177000
Depreciation 500000 500000 500000 500000
Working Capital 800000
Residual Value 500000
Free Cash Flows -1677000 -1677000 -1677000 -377000
Discounted Value 0.892857143 0.79719 0.71178 0.63552
Discounted Inflows -1497321.429 -1336894.133 -1193655.476 -239590
Outflow $    3,300,000.00
Inflow -4267461.352
NRV $ (7,567,461.35)
Worst Case
Average selling price $                  25.00
Expected sale 450000
equipment cost $    2,500,000.00
Residual Value $       500,000.00
Working Capital $       800,000.00
Depreciation SLM
Variable cost $                  15.00
Fixed cost $       550,000.00
Discount rate 12%
Tax Rate 30%
Year 1year 2 year 3 year 4 year
Sales 11250000 11250000 11250000 11250000
Variable cost 6750000 6750000 6750000 6750000
Contribution 4500000 4500000 4500000 4500000
Fixed cost $       550,000.00 $      550,000.00 550000 550000
Depreciation 500000 500000 500000 500000
Operating Profit 3450000 3450000 3450000 3450000
Tax 1035000 1035000 1035000 1035000
PAT 2415000 2415000 2415000 2415000
Depreciation 500000 500000 500000 500000
Working Capital 800000
Residual Value 500000
Free Cash Flows 2915000 2915000 2915000 4215000
Discounted Value 0.892857143 0.79719 0.71178 0.63552
Discounted Inflows 2602678.571 2323820.153 2074839.422 2678709
Sensitivity Analysis
Outflow $    3,300,000.00
Inflow 9680046.847
NRV $    6,380,046.85
Unit Drivers Expected NRV Revised NRV Change in %
Unit Sales (-20%) $  6,592,661.30 $    1,808,836.08 73%
Per Unit (-20%) $  6,592,661.30 $    4,870,484.22 26%
Variable Cost (+20%) $  6,592,661.30 $ (7,567,461.35) 215%
Cash Fixed Cost (+100000) $  6,592,661.30 $    6,380,046.85 3%

Good Case

Average selling price $                  30.00
Expected sale 450000
equipment cost $    2,500,000.00
Residual Value $       500,000.00
Working Capital $       800,000.00
Depreciation SLM
Variable cost $                  15.00
Fixed cost $       450,000.00
Discount rate 12%
Tax Rate 30%
Year 1year 2 year 3 year 4 year
Sales 13500000 13500000 13500000 13500000
Variable cost 6750000 6750000 6750000 6750000
Contribution 6750000 6750000 6750000 6750000
Fixed cost 450000 450000 450000 450000
Depreciation 500000 500000 500000 500000
Operating Profit 5800000 5800000 5800000 5800000
Tax 1740000 1740000 1740000 1740000
PAT 4060000 4060000 4060000 4060000
Depreciation 500000 500000 500000 500000
Working Capital 800000
Residual Value 500000
Free Cash Flows 4560000 4560000 4560000 5860000
Discounted Value 0.892857143 0.79719 0.71178 0.63552
Discounted Inflows 4071428.571 3635204.082 3245717.93 3724136
Outflow $    3,300,000.00
Inflow 14676486.52
NRV $ 11,376,486.52
Average selling price $                  25.00
Expected sale 540000
equipment cost $    2,500,000.00
Residual Value $       500,000.00
Working Capital $       800,000.00
Depreciation SLM
Variable cost $                  15.00
Fixed cost $       450,000.00
Discount rate 12%
Tax Rate 30%
Year 1year 2 year 3 year 4 year
Sales 13500000 13500000 13500000 13500000
Variable cost 8100000 8100000 8100000 8100000
Contribution 5400000 5400000 5400000 5400000
Fixed cost 540000 540000 540000 540000
Depreciation 500000 500000 500000 500000
Operating Profit 4360000 4360000 4360000 4360000
Tax 1308000 1308000 1308000 1308000
PAT 3052000 3052000 3052000 3052000
Depreciation 500000 500000 500000 500000
Working Capital 800000
Residual Value 500000
Free Cash Flows 3552000 3552000 3552000 4852000
Discounted Value 0.892857143 0.79719 0.71178 0.63552
Discounted Inflows 3171428.571 2831632.653 2528243.44 3083534
Outflow $    3,300,000.00
Inflow 11614838.38
NRV $    8,314,838.38
Average selling price $                  25.00
Expected sale 450000
equipment cost $    2,500,000.00
Residual Value $       500,000.00
Working Capital $       800,000.00
Depreciation SLM
Variable cost $                  12.00
Fixed cost $       450,000.00
Discount rate 12%
Tax Rate 30%
Year 1year 2 year 3 year 4 year
Sales 11250000 11250000 11250000 11250000
Variable cost 5400000 5400000 5400000 5400000
Contribution 5850000 5850000 5850000 5850000
Fixed cost 450000 450000 450000 450000
Depreciation 500000 500000 500000 500000
Operating Profit 4900000 4900000 4900000 4900000
Tax 1470000 1470000 1470000 1470000
PAT 3430000 3430000 3430000 3430000
Depreciation 500000 500000 500000 500000
Working Capital 800000
Residual Value 500000
Free Cash Flows 3930000 3930000 3930000 5230000
Discounted Value 0.892857143 0.79719 0.71178 0.63552
Discounted Inflows 3508928.571 3132971.939 2797296.374 3323760
Outflow $    3,300,000.00
Inflow 12762956.43
NRV $    9,462,956.43
Average selling price $                  25.00
Expected sale 450000
equipment cost $    2,500,000.00
Residual Value $       500,000.00
Working Capital $       800,000.00
Depreciation SLM
Variable cost $                  15.00
Fixed cost $       550,000.00
Discount rate 12%
Tax Rate 30%
Year 1year 2 year 3 year 4 year
Sales 11250000 11250000 11250000 11250000
Variable cost 6750000 6750000 6750000 6750000
Contribution 4500000 4500000 4500000 4500000
Fixed cost $       550,000.00 $      550,000.00 550000 550000
Depreciation 500000 500000 500000 500000
Operating Profit 3450000 3450000 3450000 3450000
Tax 1035000 1035000 1035000 1035000
PAT 2415000 2415000 2415000 2415000
Depreciation 500000 500000 500000 500000
Working Capital 800000
Residual Value 500000
Free Cash Flows 2915000 2915000 2915000 4215000
Discounted Value 0.892857143 0.79719 0.71178 0.63552
Discounted Inflows 2602678.571 2323820.153 2074839.422 2678709
Outflow $    3,300,000.00
Inflow 9680046.847
NRV $    6,380,046.85
Sensitivity Analysis
Unit Drivers Expected NRV Revised NRV Change in %
Unit Sales (-20%) $  6,592,661.30 $  11,376,486.52 -73%
Per Unit (-20%) $  6,592,661.30 $    8,314,838.38 -26%
Variable Cost (+20%) $  6,592,661.30 $    9,462,956.43 -44%
Cash Fixed Cost (+100000) $  6,592,661.30 $    6,380,046.85 3%

2.5 Identify and discuss any latest share or bond issuance by the selected company

JB Hi Fi Company is officially listed on Australia Stock Exchange on 23/10/2003. The issuer code of the company is JBH. According to the rating companies risks are balanced. The shares applied in 2019 have been raised 50%. The stock price have been listed recently is ₹ 34.860 with the increase of Rs +0.520 and +1.51% has been raised according to the relevant sources referred by the JB HI FI company. The company’s trends changes and fluctuations takes place.

Jb Hi Fi Company has been operated as a listed holding company in Australia. The company consists of most popular and trusted retail brands of home appliances whether major appliances and small appliances, home entertainment appliances etc are operated mainly in Australia (Goldstein, et. al., 2017). These brands are JB HI-FI and The Good Guys. The Good Guys is the subsidiary company of JB HI-FI Company. The capital structure of the company can be analyzed by latest statistics referred from the Wall Street Journal.

  • Total Debt to Total Equity has been checked as 42.06.
  • Total Debt to Total Capital is seen as 29.60.
  • Total Debt to Total Assets ratios has been got 17.23.
  • Interest Coverage received as 31.78
  • Long-Term Debt to Equity Ratio we got is as 42.06.
  • Long-Term Debt to Total Capitalism 29.60.
  • Long-Term Debt to Assets ratio by the company is 0.17.

2.6 Calculate and discuss the PE ratios and share price movement of the selected company through 3 years.

PE Ratio means the price earnings ratio. The company PE ratio will show the actual market position of the company (Becker & Ivashina, 2015).The Highest the PE ratio the highest the company valuation. The company use this as an important analytical tool for the investors. It will be calculates as

P/E Ratio = Earnings per share / Market value per share

The PE ratio of the year 2019 is 16.0. This will show that the company is having good financial position and will have good image in the market.

The following graph will show you the movement of the PE ratio in the last years

(Figure: PE ratio)

(Figure: PE ratio)

(Source: Stockpedia, 2019)

III Recommendation letter

It is recommended that the Jb Hi Fi Australian Company to all the investors as it follows all the basic and ethical behaviour and code of conduct necessary to follow by everyone. The directors, staff and employees expect all the guidelines are followed. As we have look upon the comprehensive examination and analysed the firm’s financial performance from the updated financial statements of JB Hi Fi Australia.

This time company is growing with the increasing trend. The only competitor in front of JBH is KGN that’s Kogan limited. This time the sales have been hiked 3.5% to 7.1% billion in 2019. In order to have safe and easy returns investors can invest in the company.

Being an investment analyst, it is recommended to all the investors to invest in the Jb Hi Fi.The Company is performing well in the year 2019 and can write many stories of success in the upcoming years. The share price fluctuations are normal of JB HI FI. Company is viable to pay the liquid liabilities.

After going through a quick replay of the above questions, PEratiooftheyear2019is16.0it is clear that company is having good financial position and have good image in the market.

IV Conclusions

JB Hi Fi Company is a progressive company. It has set a benchmark for all those who wish to invest in home appliances products such as electronic appliances whether major or small appliances belonging to the company under the name JB Hi Fi. According to the statistical analysis we can say that company shows the best work done in 2019. We came to know about all the details of the company, because we studied the entire financial situation thoroughly.

The data has been researched and finalized with an accurate analysis of its condition, leading to the conclusion that JB Hi Fi has a strong position in Australia. In 2018, the price to income ratio was 18 xs. The higher the price to income ratio, the more optimistic the buyer will be about the company’s future performance. A company can reduce the price to income ratio by purchasing debt and spending cash. If the price to income ratio increases then it is better to deal in other companies rather than Jb Hi Fi Australia company.

References
  • Becker, B., & Ivashina, V. (2015). Reaching for yield in the bond market. The Journal of Finance, 70(5), 1863-1902.
  • Goldstein, I., Jiang, H., & Ng, D. T. (2017). Investor flows and fragility in corporate bond funds. Journal of Financial Economics, 126(3), 592-613.
  • Huo, B. (2012). The impact of supply chain integration on company performance: an organizational capability perspective. Supply Chain Management: An International Journal, 17(6), 596-610.
  • JB HI FI GROUP. (2019). Reports. [Online]. JB HI FI GROUP. http://annualreports.com/HostedData/AnnualReportArchive/J/ASX_JBH_2017.pdf [Accessed on 20.09.2019].
  • Stockpedia. (2019).PE ratio. [Online] Stockpedai. Available at https://investors.jbhifi.com.au/wp-content/uploads/2019/08/4E_FY19.pdf. [Accessed on 20.09.2019].
  • Talari, S., Shafie-Khah, M., Siano, P., Loia, V., Tommasetti, A., & Catalão, J. (2017). A review of smart cities based on the internet of things concept. Energies, 10(4), 421.
  • Tandon, K., & Malhotra, N. (2013). Determinants of stock prices: Empirical evidence from NSE 100 companies. International Journal of Research in Management & Technology (IJRMT), ISSN, 2249, 9563.