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Essay / Research Paper Abstract
This 10 page paper uses a range of ratio, including financial performance, financial structure, liquidity and working capital ratios, to compare and contrast the financial performance of these two fashion companies in the years 2003 and 2004. The bibliography cites 9 sources.
Page Count:
10 pages (~225 words per page)
File: TS14_TEbossarmani.rtf
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Unformatted sample text from the term paper:
perform, so for comparison the use of ratios rather than final figures can be beneficial, allowing for a better comparison. In this paper we will look at two companies in
a similar industry, Hugo Boss and Giorgio Armani S.p.A. With a selection of ratios we can compared the performance of the two companies and assess their relative performances Both
companies are in the fashion industry and have extended their lines outwards with ventures into complimentary products so both can be seen as comparable companies. The companies are based
in different countries, so in all of the figures given in this report the currency used is the Euro, and all currency amounts are in millions unless otherwise states. The
latest sets of accounts were the 2004 accounts. 2. Financial Performance Ratios 2.1 Gross Profit Margin The gross profit margin is expressed
as a percentage. This is the level of revenue that remains when all of the direct costs for producing the goods or services are deducted from the revenue. This indicates
the level at which direct costs account take up revenue (Chadwick, 2001). Hugo Boss Giorgio Armani 2004 2003 2004 2003 Income (a) 1,208,734 1,110,663 1,298.60 1,254.60 Cost
of goods sold (b) 569,159 519,607 931.6 1,006.80 Gross profit (c) (a-b) 639,575.0 591,056.0 367.0 247.8 Gross profit margin (b/a%) 52.91% 53.22% 28.26% 19.75% If we look at this it
appears that Armani is less efficient with higher cost of good sold, but this does not always equate to profit, as high quality goods may have a higher costs
of goods but may also result in higher profits. If we look carefully at the Hugo Boss income figure there is an adjustment on that figure that increases the income
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