本文是金融专业的留学生Essay范例，题目是“International Financial Analysis of Burberry（博柏利国际金融分析）”,这份报告旨在对博柏利公司(Burberry PLC)过去三年的财务状况进行分析，以确定它是否是一个值得投资的公司。研究将分析全球和英国经济，以了解博柏利经营的市场类型。金融和零售行业将被评估，以看到可能的非货币，外部因素涉及盈利能力，效率和流动性的公司。最后，将对整个Burberry PLC公司进行比率分析，以评估投资的盈利能力。
This report is meIntroduction介绍
ant to financially analyse Burberry PLC over the course of the past three years in order to determine whether or not it is a good company to invest in. The global and British economies will be analysed to comprehend the type of market Burberry is operating in. The finances and retail industry will be assessed to see the possible non-monetary, external factors involved in the profitability, efficiency, and liquidity of the company. Finally, a ratio analysis of the entire Burberry PLC company will be performed in order to assess the profitability of the investment.
The Burberry brand was founded by Thomas Burberry in 1856 but the first London store opened its doors in in 1891. Burberry is known for being innovative, starting off with the invention of gabardine – a cotton weatherproof fabric that gave Burberry’s its reputation. Today, the company is still as innovative, Burberry is an industry leading investor in artificial technology to improve the customer experience not only within their boutiques, but through the use of social media to its full potential (Burberry PLC, 2017).
1856年，托马斯•博柏利(Thomas Burberry)创立了博柏利(Burberry)品牌，但第一家伦敦店于1891年开业。博柏利以创新著称，最先发明的是华达呢——一种防风雨的棉质面料，为博柏利带来了声誉。今天，该公司仍然是创新的，博柏利是一个行业领先的投资者，在人工技术改善客户体验，不仅在他们的精品店，但通过使用社交媒体充分发挥其潜力(博柏利PLC, 2017年)。
Earlier in 2017, Burberry’s Chief Executive Officer and Chief Creative Officer, Christopher Bailey stepped down and Burberry hired “luxury retail veteran” Marco Gobetti in hopes of steading Burberry’s shares (McClean, 2016). During Mr. Gobetti’s first few months in charge, he has set a plan in motion to gradually start saving £120m a year, increase revenues, and lodge itself “firmly in luxury” by improving customer experiences (Vandevelde, 2017).
The economic outlook will contain a brief analysation of the global economy and the British economy to determine stability and risk.
The global economy is expected to stabilize by the end of 2017, because global trade has risen and so has the emerging markets. Not only will a stronger global economy be present in developed nations, but it will also be present in developing nations. Although there are some risks present, such as the “possibility of financial market disruptions,” there is more evidence of a stable global economy (Global Outlook a Financial Recovery, 2017).
The United Kingdom’s economy is the third largest in Europe and it is a leading financial centre. The gross domestic product has increased an average of 1.5% over the past year and it increases by 0.4% quarterly (Ons.gov.uk, 2017). This means that the gross domestic product has not been sharply decreasing or increasing which is a sign of economic stability. The unemployment rate is at a steady 4.9%, which compared to the American market the unemployment rate is at parity and at a healthy point. Even though the British economy is one of the fastest growing economies, Brexit has put London’s title as the European financial centre in jeopardy and there is a vast amount of uncertainty surrounding the overall position of the British economy amongst and with members of the single market (Cia.gov, 2017). Overall, the British economy is steady regardless of the uncertainty of the future and consequences of Brexit.
英国是欧洲第三大经济体，也是领先的金融中心。过去一年，英国国内生产总值平均增长1.5%，每季度增长0.4% (Ons.gov.uk, 2017)。这意味着国内生产总值没有急剧下降或增加，这是经济稳定的标志。失业率稳定在4.9%，与美国市场的失业率持平，处于一个健康的水平。尽管英国经济是增长最快的经济体之一，但英国脱欧已经使伦敦作为欧洲金融中心的头衔处于危险之中，英国经济在单一市场成员中的整体地位存在大量的不确定性(Cia.gov, 2017)。总的来说，尽管未来的不确定性和脱欧的后果，英国经济是稳定的。
Retail Industry Outlook零售行业前景
Burberry operates under the wide umbrella of the retail industry, but finds itself within the luxury fashion market niche. The luxury fashion market in Britain is projected to be worth £54bn within the next two years and the sector is valued at 2.2pc worth of the UK gross domestic product (Armstrong, 2015). In order for luxury fashion brands to succeed, companies are now targeting generations Y and Z to keep in business in the long-term future. Generations Y and Z spurred the 85% growth in luxury sales in 2017 (Agnew and Rutter Pooley, 2017). Therefore, luxury fashion brands need to market towards millennials and the younger generations to succeed in the changing world.
博柏利在零售行业的大伞下经营，但发现自己属于奢侈时尚市场的利基。未来两年内，英国的奢侈品时尚市场预计价值540亿英镑，占英国国内生产总值的2.2%(阿姆斯特朗，2015年)。为了让奢侈时尚品牌获得成功，各公司现在把目标对准了Y、Z世代，以便在长期的未来保持经营。Y世代和Z世代推动了2017年奢侈品销售额85%的增长(Agnew和Rutter Pooley, 2017)。因此，奢侈时尚品牌需要面向千禧一代和年轻一代进行营销，以在不断变化的世界中取得成功。
The analysation of Burberry’s financial statements through the use of ratios is essential in determining the company’s profitability, liquidity, efficiency, and capital structure. Burberry’s financial ratios will be compared to industry standards and to Jimmy Choo PLC’s in order to fully comprehend whether Burberry’s finances are up to, above, or below industry standard.
The profitability ratios will not only measure and demonstrates Burberry’s efficiency in producing profits, but it will also shed a light towards the company’s efficiency in managing its costs and investments.
Gross Profit Margin毛利率
From the year ending in March 2015 until the year ending in March 2017, the gross profit margin ratio has remained within 0.50%. This signifies that Burberry’s profitability in manufacturing and selling goods has stagnated over the past three years. A stagnant gross profit margin means that, while the management of the cost of sales has not deteriorated, it has not improved either. It can also indicate stability in the company’s prices and stability of overall costs. To further support the previous statements, the retail industry median is 43.9% and Jimmy Choo PLC’s gross profit margin is 64.01% (Benchmark Breakdown: Key Metrics On 25 Industries, 2017). Burberry has a much higher ratio than the industry standard and a slightly better ratio than its competitor. Therefore, even though the ratio has decreased by 0.21% over the past year, Burberry is still more efficient in producing a profit above the cost of sales than expected which can be due to the high prices that the luxury fashion market lends itself to and high demand.
从2015年3月截止到2017年3月，毛利率一直保持在0.50%以内。这意味着博柏利在制造和销售商品方面的盈利能力在过去三年里停滞不前。停滞不前的毛利率意味着，虽然销售成本管理没有恶化，但也没有改善。它也可以表明公司价格的稳定性和总成本的稳定性。为了进一步支持之前的声明，零售行业的中位数为43.9%，Jimmy Choo PLC的毛利率为64.01%(基准细分:25个行业的关键指标，2017年)。博柏利的比率远远高于行业标准，略高于竞争对手。因此，尽管这一比例在过去的一年里下降了0.21%，但Burberry在创造高于销售成本的利润方面仍然比预期的更有效率，这可能是由于奢侈时尚市场本身的高价格和高需求。
The operating profit margin has been decreasing since March 2015 from 17.45% to 14.26% in March 2017. The decreasing ratio indicates a decrease in Burberry’s profitability in its trading operations and a decrease in the company’s control of fixed costs. This may be due to an increase in overheads while operating profits slightly decrease as shown on page 127 and 123 of Burberry’s Financial Statements of 16/17 and 15/16 respectably. Even though Burberry has a decreasing operating profit margin it is still nearly three percentage points higher than its competitor Jimmy Choo, whom has a ratio of 11.81%.
Burberry’s net profit margin has decreased from having a 13.52% net profit in 2015 to a 10.40% net profit in 2017. This indicates that management has not been successfully creating profit, which is due to increasing overheads as revenue has only increased according to the statement of cash flows. However, compared with the industry standard, which stands at 3.6%, and Jimmy Choo, which stands at 4.12%, Burberry is more successful at generating profits than the industry norm and its competitor.
Return on Assets (ROA)
The increase in the return of assets ratio demonstrates that the efficiency of which Burberry management have handled and used their resources has been profitable. The ratio’s increase could be due to profitable investments in total assets made by management.
Return on equity lowered nearly seven percentage points from 2015 to 2017. This indicates that the capital invested by ordinary shareholders has been decreasing in profitability over the past three years. After analysing the statement of cash flows for all three years, the return on equity has decreased due to a slight increase in dividends and a decrease in investing activities. Even though Burberry’s return on equity is decreasing, the ratio at which it stands still gives the company a high advantage compared to the industry standard of 9%. Since Burberry is nearly twice as efficient in the return of equity, the company can still afford it.
Return on Capital Employed (ROCE)已用资本回报率(ROCE)
The return on capital employed is yet another ratio that has decreased over the time being studied. The decreasing ratios demonstrates that Burberry is investing more capital by year than the profit being generated. As previously shown, the operating profit margins, net profit margins, and gross profit margins have all decreased over the three-year period
The liquidity of a company is equivalent with the ability of a business to pay for short-term liabilities.
In the retail industry, liquidity ratios are non-essential because of the lack of debtors (Chatzivgeri, 2017). However, it is important to note that Burberry has the liquidity to cover twice the amount of their current payments. This is due to high equity and many current assets which is caused by good company investments.
The efficiency ratios measure the way a company deals with its assets concerning inventory, receivables, and payables.
Burberry’s average inventory turnover period is very high and has only increased over the past three years. From 2016 to 2017, the average did decrease from 236 days to 221 days, yet the number is still alarmingly high. Typically, high average inventories turnover periods are caused by the overproduction of goods or poor sales achievement. Poor sales achievement might be caused by the brand’s high prices and its reputation for being exclusive.
Average Settlement Period for Receivables
The average settlement period for receivables has retained an average of 47 days, which indicates that Burberry has high efficiency in collecting credit sales.
The relationship between a company’s debt and its equity can be demonstrated through the use of capital structure ratios.
The term gearing in a financial analysist context means the mix of debt and equity in a company’s finance (Atrill and McLaney, 2017). Thus, the decreasing gearing ratios in Burberry’s financial statements indicate that most of their funding comes from equity rather than debt. This indicates a low risk level for investors and shareholders, because the capital being used to finance its operations comes from the company itself.
The interest cover ratio has only drastically risen since 2017, which indicates an increase in profits. Burberry’s ability to pay 263 times its interest demonstrates that Burberry has high liquidity as well.
An investment ratio is for the company’s investors and potential investors see how much profit they will gain from their investment.
Price/Earnings (P/E)市盈率(P / E)
Burberry’s price per earnings ratio is quite low, for the past three years the ratio been below one, meaning that Burberry’s earnings are high but market price is low. This could be an indicator that the company is expanding or growing. The low market price can also be a repercussion of Burberry’s Chief Creative Officer and Chief Executive Officer, Christopher Bailey left Burberry PLC in July 2017 (Vandevelde, 2017). The change in management and management styles may have led to the low market price.
博柏利的市盈率相当低，过去3年的市盈率一直低于1，这意味着博柏利的盈利很高，但市场价格很低。这可能是公司正在扩张或成长的一个指标。低市场价格也可能是Burberry的首席创意官兼首席执行官克里斯托弗·贝利(Christopher Bailey)在2017年7月离开Burberry PLC (Vandevelde, 2017)的影响。管理和管理风格的变化可能导致了低市场价格。
Dividend per Share
Burberry’s dividend per share has been steadily increasing since 2015. This means investors have been getting a larger part of the company’s profits as the years go by. This could be caused by an overall increase in profits, which would mean a higher dividend to distribute amongst the investors. Overall, the ratio for the dividend per share is quite low, but it has been increasing.
Conclusion and Recommendations结论和建议
The economic portion of this analysis demonstrated that the global economy is stable and will not greatly interfere with Burberry’s financial performance. While there is reason to worry about Brexit’s effect on the single market and Burberry, it is not distressing enough to cause drastic drops in profitability or efficiency. Analysing the retail industry demonstrated that to expand or even maintain a luxury fashion business profitable and operational, the fashion house must appeal to the younger generations. Burberry’s dedication to innovation, whether technological or product wise, will give the company a competitive advantage over its competitors. As for the financial analysis, the profitability ratios demonstrate that even though the company’s costs are not being effectively managed, Burberry is still producing profits. The quick acid test and financing ratios showed that the company is highly liquid and the efficiency ratios demonstrated a need to improve on efficient methods when dealing with inventory. Analysing the investment ratios revealed that Burberry is very generous in the distribution of dividends. Overall, compared to other companies like Jimmy Choo PLC and based on the retail industry standard, Burberry’s finances are profitable for investment. Therefore, Burberry PLC is a company worth investing in.
该分析的经济部分表明，全球经济是稳定的，不会对博柏利的财务表现产生很大影响。虽然有理由担心英国退欧对单一市场和博柏利的影响，但它还没有令人沮丧到导致盈利能力或效率大幅下降的程度。对零售业的分析表明，要想扩大甚至维持奢侈时装业务的盈利和运营，时装公司必须吸引年轻一代。博柏利致力于创新，无论是技术还是产品方面的创新，都将使该公司相对于竞争对手拥有竞争优势。在财务分析方面，盈利能力比率表明，即使公司的成本没有得到有效的管理，Burberry仍然在创造利润。快速酸测试和融资比率表明，该公司是高流动性和效率比率表明，需要改进有效的方法处理库存。对投资比率的分析显示，博柏利在股息分配方面非常慷慨。总体而言，与周仰杰(Jimmy Choo PLC)等其他公司相比，以零售行业标准衡量，博柏利的财务状况是有利可图的。因此，Burberry PLC是一个值得投资的公司。
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