retail benchmarking – sub sector analysis_final

8/9/2019 Retail Benchmarking Sub sector analysis_Final

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Presented By

Rahul Goyal

Piyush Sharma

Neha JoshiSurabhi Jain

ShashankAgrawal

Tarun Kuntal


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CVS

18.40% - Fiscal yr 2005 to 06

20.96% - Fiscal yr 2004 to 05

Longs Drug

9.14% - Fiscal yr 2005 to 06

1.35% - Fiscal yr 2004 to 05


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Though theoperatingmargin hasincreases but thenet margin hasdrasticallydecreased due tothe increase innon operatingexpenses eg.Interest ondebentures,Interest on

loan.etc


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We, can say that CVS is financially performing better thanLongs drug in recent years as it has a good net income marginas compared to longs drug & it is increasing at a stable rate. It isalso performing better on liquidity terms. While on efficiencyterms Longs Drug has a better utilization than CVS. CVS has tokeep a check on inventory management so as to improve itsefficiency & to stand as a leader in the market. On the otherLongs Drug need to keep a check on its expenses to improvefinancially which they are doing by cutting the overheadexpenses.


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COMPARISON OF


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GROSS MARGIN

OPERATINGMARGIN


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EBIDTA MARGINEBIDTA MARGIN

NET INCOME MARGINNET INCOME MARGIN


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SG& A MARGINSG& A MARGIN


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WORKIN

GCAPITAL RATIO


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INVENTORY/ TOTAL ASSETS

FIXED ASSETS/ TOTAL ASSETS


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INVENTORY TURNOVERINVENTORY TURNOVER


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On comparing both the companies on different parameters like:-

1. Financialperformance2. Liquidity

3. Operations4. Efficiency

We, can say that Big Lots initial position was poor as ranked as on

these parameters but in the recent years it has shown progress bycutting its overhead expenses & other items , as a result its

performance has improved by way of Net Income margin or operatingincome. While Dollar General stands at a strong position as compared

on operations, efficiency etc. but in the recent year its margin hasdecreased due to the increase in expenses may be financial expenses

or operating expenses, which is more than the increase in sales due towhich its margins has dropped by a minimal amount. So Dollar General

needs to keep a check on its expenses to improve its performance.


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Sales growth

AMAZON 2006

AMAZON 2005

DRUGSTORE 2006

DRUGSTORE 2005


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Inventory/Total Assets

Fixed Assets/Total Assets


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Lease Adjusted

Debt/Capitalization

Debt/Capitalization

Net Worth/Capitalization


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Inventory Turnover

Accounts Payable/Inventory

Working Capital Ratio


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FixedChargeCoverage

Debt/EBITDA

Lease Adjusted Debt/EBITDA


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Gross Margin

SG&A Margin

Operating Margin


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Return on Equity

AMAZON 2006

AMAZON 2005

AMAZON 2004

DRUGSTORE 2006

DRUGSTORE 2005DRUGSTORE 2004


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Return on Assets

AMAZON 2006

AMAZON 2005

AMAZON 2004

DRUGSTORE 2006

DRUGSTORE 2005DRUGSTORE 2004


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On comparingboththe companies ondifferentparameters like:-

1. Financial performance

2. Liquidity

3. Operations

4. Efficiency

We, can say that Drug store has a weak financial performance as

compared to Amazon as it has a negative income margin . It has

incurred a high amount of S, G & A expenses due to which its

operating income is negative. Drug store is performing better on

liquidity terms but its efficiency is decreasing which can be seen from

turnover ratios. Also due to the increase in expenses its profit hasdecreased. Drug Store needs to keep a check on its expenses & do

proper inventory management to improve its financial performance.


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retail benchmarking – sub sector analysis_final

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