Mr. Price, also known as MRP, is a publicly traded retail company based in South Africa, well known for its focus on value. The group retails apparel, as well as homeware and sportswear through owned and franchised stores across 14 countries, primarily in Africa. It also services customers globally through its online stores. Focus on the Financial statements of the company and not of the Group.
Issue an overall conclusion on the cash flow of mr price
Income Statement: Vertical Analysis:
|
2019 |
Retail Sales |
X |
100 |
= |
|
|
Total Sales |
|||||
|
20 877 000 |
X |
100 |
= |
93.36% |
|
|
22 361 000 |
|||||
|
2018 |
Retail Sales |
X |
100 |
= |
|
|
Total Sales |
|||||
|
19 994 000 |
X |
100 |
= |
94.38% |
|
|
21 185 000 |
|||||
|
2017 |
Retail Sales |
X |
100 |
= |
|
|
Total Sales |
|||||
|
18 575 000 |
X |
100 |
= |
94.39% |
|
|
19 679 000 |
Horizontal Analysis:
|
2019 |
2018 |
2017 |
2016 |
2015 |
2014 |
|
|
Retail Sales |
20 877.00 |
19 994.00 |
18 575.00 |
19 038.00 |
17 285.00 |
15 227.00 |
|
Variance |
883.00 |
1 419.00 |
(463.00) |
1 753.00 |
2 058.00 |
- |
|
% |
4% |
8% |
-2% |
10% |
14% |
0% |
|
Profit from Operations |
3 938.00 |
2 732.00 |
3 048.00 |
3 603.00 |
3 076.00 |
2 537.00 |
|
Variance |
1 206.00 |
(316.00) |
(555.00) |
527.00 |
539.00 |
- |
|
% |
44% |
-10% |
-15% |
17% |
21% |
0% |
Let us first look at the the detail provided to us & braodly what it indicates.
Through vertical analysis we have been provided detail of Retail sales proportion to total sales which is 94.38% & 94.39% in 2018 & 2017 respectively and for 2019 it is 93.36%.
The retail sales from cash flow perspective it will be cash sales in the current business scenario & having more than 93% retail sales from total sales is real good indicator from cash perspective.
While in horizonal analyasis we have been provided Retail sales year on year and profit from operaiton year on year basis.
The vertical analysis shows retail sale had negative growth only during 2017 however during 2016 & 2017 it had double digit growth while for 2018 & 2019 it show single digit growth. Whereas in case of operating profit 2017 & 2018 had negative growth rate.
On overall basis 2019 seems to be indicating good busines growth, it shows over all sales growing by 5.55%, retail sales growing by 4.42% & Operating profit is showing turnaround of growth of 44%. There should be some specific reason for lower profit in 2018 & 2017 (mainly from cost side) since with moderate growth of sale by 5.5% the operating profit have increased by 44%.
From cash flow perspective operating profit is major cotributor & hence higher the profit from the operation higher the cash flow. In view of above analsyis from cash flow perspective based on avaiable detail it can be said that 2019 is turnaroud from cash flow perspective compared to previous year and there is slight reduction in retail sales ratio but it should not have large imapct on cash flow
Mr. Price, also known as MRP, is a publicly traded retail company based in South Africa,...
Draft conclusion based on the below vertical and horizontal analysis, and include the possible strategic risk issue which the company might encounter. Income Statement - Horizontal Analysis 2019 2018 2017 2016 2015 2014 Retail Sales 20 877.00 19 994.00 18 575.00 19 038.00 17 285.00 15 227.00 Variance 883.00 1 419.00 (463.00) 1 753.00 2 058.00 - % 4% 8% -2% 10% 14% 0% Profit from Operations ...