Myer is mainly listed in the Australian store chain department, where adequate operations are confined to Australia (Myer 2018). The company provides range of products for men, children and women in their stores. In addition, Myer is considered to be the largest department stores by store count and sales.
The company mainly uses revenue recognition criteria where lay-by transactions are recognised at the point of sales. This relevant revenue recognition criteria are mainly depicted in the annual report of Myner in page number 66 (Myer 2018). The recognition method is depicted in A2 Revenue section of the annual report, which is depicted in notes to consolidated financial statements.
The property, plant and equipment are mainly valued at cost less depreciation, which includes all the cost incurred by the company in purchasing the assets. The valuation method for property, plant and equipment are mainly listed in page number 75, under the notes of consolidated balance sheet C1 (Myer 2018).
PricewaterhouseCoopers (PWC) is the independent auditor for Myer Company, which helps in evaluating annual report of the company (Myer 2018). The independent auditor’s report is mainly prepared for the stakeholders of the company, as they need confirmation regarding viability of the financial data represented in the annual report.
The company has supported 100% ethical sourcing policy, where waste recycle rate stands at 60% and total cash equivalent contribution to charity partners is at $3.1 million (Myer 2018). The companies are concerned about the sustainability report, as investors are concerned regarding the ethical measure taken in completing its operations.
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Particulars
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2016
|
2015
|
|
Revenue
|
2,640,154
|
2,654,351
|
|
Accounts receivable
|
37,883
|
30,363
|
|
Cost of goods sold
|
1,527,552
|
1,495,382
|
|
Inventory
|
396,297
|
381,907
|
|
Inventory turnover ratio
|
3.93
|
3.94
|
|
Accounts receivable turnover ratio
|
77.37
|
87.75
|
The efficiency ratio results mainly indicate low performance of the company, as both accounts receivable and inventory turnover ratio has declined from 2015 to 2016 (Myer 2018). This indicates that the efficiency performance of the company has declined over the period of two fiscal years. The company needs to improve its performance by increasing its efficiency rate.
|
Particulars
|
2016
|
2015
|
|
Revenue
|
2,640,154
|
2,654,351
|
|
EBIT
|
113,486.0
|
133,456.0
|
|
Gross Income
|
1,274,291
|
1,290,392
|
|
Profit Margin
|
4.30%
|
5.03%
|
|
Gross profit margin
|
48.27%
|
48.6%
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The profitability ratio has declined from 2015 to 2016, indicating low performance of the organisation. the profit margin has declined from 5.03% to 4.30%, while gross profit margin has reduced from 48.6% to 48.27% (Myer 2018). This indicates that the company’s profitability has deteriorated over the past 2 years.
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Particulars
|
2016
|
2015
|
|
Total liabilities
|
760,133
|
1,023,532
|
|
Total Assets
|
1,867,898
|
1,405,744
|
|
EBIT
|
113,486
|
133,456
|
|
Interest expense
|
15,447
|
23,488
|
|
Debt ratio
|
0.41
|
0.73
|
|
Interest coverage ratio
|
7.35
|
5.68
|
The debt ratio and interest coverage ratio of the organisation has mainly inclined over the period of 2 years. This indicates the relevant strengthening of the organisations financial performance, due to the improvement achieved during 2017 (Myer 2018). Therefore, the improvement in performance of debt ratio states company’s financial performance.
Reference and Bibliography:
Myer. (2018). Myer. [online] Available at: https://www.myer.com.au/ [Accessed 28 Jan. 2018].
Paul, S. and Mitra, G., 2017. Impact of Financial Ratios on Stock Price: A Comparative Study with Hang Seng and Nifty Data. Research Bulletin, 43(2), pp.64-71.
