Bebe Fiancial Statement Analysis

In: Business and Management

Submitted By isakas
Words 11308
Pages 46
Financial Statements Final Project

for Dr. Rimona Palas

TABLE OF CONTENTS

Executive Summary ………………………………………………………………………………………… 3
Background …………………………………………………………………………………………………………… 5
Marketing Analysis………………………………………………………………………………………… 11 Porter Analysis ………………………………………………………………………… 11 SWOT Analysis ……………………………………………………………………………… 14
Financial Statements Overview ………………………………………………………… 18
Ratio Analysis ………………………………………………………………………………………………… 20
Risk Analysis …………………………………………………………………………………………………… 28

Credit risk Analysis ………………………………………………………………………………… 28
Bankruptcy Analysis …………………………………………………………………………………… 29
Valuation ……………………………………………………………………………………………………………… 30
Conclusions ………………………………………………………………………………………………………… 33
Appendix…………………………………………………………………………………………………………………… 35

1. EXECUTIVE SUMMARY

Since 1976 BEBE designs, develop and produces a line of contemporary women’s apparel and accessories. Nowadays operates 285 stores in United States and 9 stores overseas. In addition 1% of its sells are done to 14 international licenses. BEBE is publicly traded on the NASADAQ for a value over 1.2 billion. BEBE targets women between the ages of 21 and 35 who are concern about fashion. During the last four years BEBE has expanded its number of stores markets and product lines, particularly in 2004 with a change of management.
BEBE’s industry is highly competitive due to very low entry barriers, many suppliers, easy substitutable products and buying power that is diluted among a large mass of buyers. In addition there are low exit barriers which predict an industry of low and stable income. BEBE’s sophisticated inventory control, high differentiation strategy and high sensitivity to fashion trend changes enable it to succeed at a…...

Similar Documents

Fiancial Statement Paper Part 1 Home Depot

...Home Depot, Inc Financial Statements Cari Tenan ACC/497 October 1, 2012 Teresa Jenkinson Home Depot, Inc Financial Statements In 1978 Home Depot, Incorporated was incorporated. Home Depot, Incorporated is the world’s largest home improvement retailer selling an assortment of building materials, home improvement, lawn and garden products plus numerous services. In 2008, Home Depot, Incorporated had 2,233 stores throughout the United States, Puerto Rico, the United States Virgin Islands, Guam, Canada, China, and Mexico plus a website on the Internet. The fiscal year for 2008 ended on February 1, 2009, and the financial statements give an individual an idea of how the corporation did during that fiscal year compared to the previous fiscal year (Phillips, Libby, Libby, 2011). Looking at the three major financial statements the consolidated statement of earnings or the income statement, balance sheet, and the cash flow statement, helps an individual to understand how well or not a company did during the year. An individual can even compare the financial statements with previous years to see where improvements may be needed. The consolidated statement of earnings shows the profitability of a company. The balance sheet shows the financial position of a company. The cash flow statement shows where the cash came from and what the cash was used for during a period. The consolidated statement of earnings for Home Depot Incorporated during the fiscal year 2008 shows......

Words: 1209 - Pages: 5

Walgreens Fiancial Analysis

...Walgreens Corporations Financial Analysis Introduction Walgreens operates 7,907 locations in 50 states, the District of Columbia, Guam and Puerto Rico with over 247,000 employees serving customers. The company has seen an increase in revenues, but an end to its contract to participate in the Express Scripts pharmacy provider network on December 31, 2011 poses a threat to revenues and profits for 2012 and future fiscal periods. This analysis will discuss Walgreen’s business strategy, provide a current financial analysis of the company, risks associated with the company, address prospective analysis of Walgreens and provide a decision on future investments in the company stock. Business Strategy Analysis A differentiation strategy serves a small market niche with products that are designed to appeal to the unique preferences and needs of the well-defined group of buyers. Companies that use differentiation strategies often enjoy high degrees of customer loyalty which discourages other firms from competing directly. This strategy usually targets customers who are not concerned about the price. Differentiation can reduce rivalry with competitors, and fight off the threat of substitute product because customers are loyal to company’s brand (Anzeletti, 2009). However, successful differentiation strategies require a number of costly activities, such as extensive advertising. Companies that purse a differentiation strategy need strong marketing abilities. One good......

Words: 2155 - Pages: 9

Financial Statement Analysis

...INTERNATIONAL FINANCIAL STATEMENT ANALYSIS INTERNATIONAL FINANCIAL STATEMENT ANALYSIS CFA Institute is the premier association for investment professionals around the world, with over 95,000 members in 134 countries. Since 1963 the organization has developed and administered the renowned Chartered Financial Analyst® Program. With a rich history of leading the investment profession, CFA Institute has set the highest standards in ethics, education, and professional excellence within the global investment community, and is the foremost authority on investment profession conduct and practice. Each book in the CFA Institute Investment Series is geared toward industry practitioners, along with graduate-level finance students, and covers the most important topics in the industry. The authors of these cutting-edge books are themselves industry professionals and academics and bring their wealth of knowledge and expertise to this series. INTERNATIONAL FINANCIAL STATEMENT ANALYSIS Thomas R. Robinson, CFA Hennie van Greuning, CFA Elaine Henry, CFA Michael A. Broihahn, CFA John Wiley & Sons, Inc. Copyright © 2009 by CFA Institute. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section......

Words: 354804 - Pages: 1420

Ausenco Financial Statement Analysis

...your assignments are due by 3pm on Friday Week 11, 2013. Your assignment will be deemed to be submitted when BOTH the electronic and printed versions have been received. For electronic submission you should divide your assignment into two parts. Part 1 Analysis Part 2 Accounts DO NOT SUBMIT ON LINE i) Electronic submission Before submitting the electronic copy of your assignment, please ensure the following: • The essay document is saved as a ‘.doc/x format’. • The file name of the essay document is your student ID number (e.g. 1234567.doc); The accounts section may be saved in either .doc or excel format, and also called student ID number (e.g. 1234567.doc or 1234567.xls). • Both your essay document should contain your student id only; • Do not upload your name, unit code, university name, cover sheet, essay question, or any other identifying details on the attached essay document. This is to protect your privacy. Instructions for electronic submission: • Access the LMS web site. • FIND [pic] ANALYSIS of AUSENCO  near the top of the first LMS web site • Drop the final copy of Part 1 of your assignment containing the analysis only in the folder Assignment Do not email it to the Lecturers email box. • You DO NOT need to submit the accounts electronically – only in hard copy. Do not email it to the Lecturers email box. ▪ Keep a record of your electronic......

Words: 513 - Pages: 3

Financial Statement Analysis

...Course Goals and Learning Objectives: The goal of this course is to provide students a practitioner’s perspective on financial statement analysis. The course will emphasize thinking beyond the text and will focus to how to critically examine financial statement information and management representations. The course will primarily focus on financial statements prepared in accordance with US GAAP, however differences between US GAAP and IFRS will be outlined and examined. The class will be taught using a combination of lectures, class discussions and real-world case studies. In order to maximize our time together, students are expected to read the assigned chapters and complete the case studies on time. Given the brevity of the course and lecture time, students are encouraged to email me directly with questions at any time. Required Materials Textbook: Financial Statement Analysis & Valuation, (3rd Edition), By Easton, McAnally, Sommers & Zhang, Cambridge Business Publishers, 2013. ISBN: 978-1-61853-009-7 Case studies will be provided on TLE. Grading Schedule Class Participation/Case Work: Individual Project: Mid-Term/Exam 1: Final Exam: 20% 30% 20% 30% Grading Expectations Class Participation/Case Work: Each student should be prepared to discuss the required readings. To satisfy the requirements of class participation, students will be required to answer direct questions from the instructor and must actively participate in group discussions. 1|Page Case Work...

Words: 854 - Pages: 4

Shayla's Restaurant Fiancial Analysis

...Shayla’s Restaurant Balance Sheet Bus 100 The Balance Sheet The financial well-being of Corner Café can be analyzed from the Balance Sheet at any given time. It enables the management team to forecast short and long-term cash flow. This also helps to determine the accuracy of the Income Statement. Assets = Liabilities + Equity Corner Café was financed with $84,000 of assets in 2011. In 2012 the assets grew substantially to $355,500. The total Principle Interest payments for 2011 were $8000 and the total Principle Interest payments for 2012 were $137,500. Current Ratio = current assets / Current Liabilities. The Current ratio should be 1:1 or higher. This measures the current financial shape of Corner Café. In 2011 the Current Ratio was 5:3 and in 2012 it grew to 7:5 which shows a greater short-term cash flow for the restaurant. Working Capital Ratio = Total Assets / Total Liabilities. Like the Current Ration the Working Capital Ration should be 1:1 or higher. Corner Café’s ratio for 2011 was 3:17 and for 2012 it was 2:6. Although the ratio started out higher in 2011 and there has been a decline in 2012, the long-term cash flow should be monitored closely so that it doesn’t continue to drop. Chris and Erica should take steps to limit their liabilities as much as possible. Debt to Equity Ratio = Total Debt / Total Equity. This ratio is used to determine if Corner Café is under performing. During 2011 the Debt to Equity Ratio......

Words: 653 - Pages: 3

Financial Statement Analysis

...CHAPTER 5—BASICS OF ANALYSIS MULTIPLE CHOICE 1. Statements in which all items are expressed only in relative terms (percentages of a base) are termed: a. vertical Statements. b. horizontal Statements. c. funds Statements. d. common-Size Statements. e. None of the answers are correct. \. 2. In financial statement analysis, ratios are: a. the only type of analysis where industry data are available. b. absolute numbers converted to a common base. c. fractions usually expressed in percent or times. d. the only indication of the financial position of the firm. e. None of the answers are correct. 3. Denver Dynamics has net income of $2,000,000. Oakland Enterprises has net income of $2,500,000. Which of the following best compares the profitability of Denver and Oakland? a. Oakland Enterprises is 25% more profitable than Denver Dynamics. b. Oakland Enterprises is more profitable than Denver Dynamics, but the comparison can't be quantified. c. Oakland Enterprises is only more profitable if it is smaller than Denver Dynamics. d. Further information is needed for a reasonable comparison. e. Oakland Enterprises is more profitable if it is a larger firm than Denver Dynamics. 4. Which of the following can offer a type of comparison in financial statement analysis? a. Past ratios and figures b. Industry averages c. Statistics of competitors d. All of the answers are correct. e. None of the answers are correct. 5. Which of the......

Words: 2598 - Pages: 11

Financial Statement Analysis

...FINANCIAL MANAGEMENT Financial Statement Analysis The process of determining financial strengths and weaknesses of a firm by establishing strategic relationship between the items of the balance sheet, profit and loss account and other operative data. Financial Statement Analysis Metcalf and Titard:It is a process of evaluating the relationship between component parts of a financial statement to obtain a better under standing of a firm’s position and performance. Financial Statement Analysis Purpose:To diagnose the information contained in financial statements so as to judge the profitability and financial soundness of the firm. Types of Financial Analysis On the basis of: The materials used. The modus operandi of analysis – i.e., the method of operation followed in the analysis. Types of Financial Analysis On the basis of materials used: External analysis. Internal analysis. Types of Financial Analysis On the basis of materials used: External analysis. • This analysis is done by outsiders who do not have access to the detailed internal accounting records of the business firm. (Investors, creditors, government agencies, credit agencies and general public.) Types of Financial Analysis On the basis of materials used: Internal analysis. • This analysis is conducted by persons who have access to the internal accounting records of a business firm. (Executives and employees of the organization and government agencies which have statutory......

Words: 3529 - Pages: 15

Financial Statement Analysis

...solution SOLUTIONS TO EXERCISES AND CASES For FINANCIAL STATEMENT ANALYSIS AND SECURITY VALUATION Stephen H. Penman Fifth Edition CHAPTER ONE Introduction to Investing and Valuation Concept Questions C1.1. Fundamental risk arises from the inherent risk in the business – from sales revenue falling or expenses rising unexpectedly, for example. Price risk is the risk of prices deviating from fundamental value. Prices are subject to fundamental risk, but can move away from fundamental value, irrespective of outcomes in the fundamentals. When an investor buys a stock, she takes on fundamental risk – the stock price could drop because the firm’s operations don’t meet expectations – but she also runs the (price) risk of buying a stock that is overpriced or selling a stock that is underpriced. Chapter 19 elaborates and Figure 19.5 (in Chapter 19) gives a display. C1.2. A beta technology measures the risk of an investment and the required return that the risk requires. The capital asset pricing model (CAPM) is a beta technology; is measures risk (beta) and the required return for the beta. An alpha technology involves techniques that identify mispriced stocks than can earn a return in excess of the required return (an alpha return). See Box 1.1. The appendix to Chapter 3 elaborates on beta technologies. C1.3. This statement is based on a statistical average from the historical data: The return on......

Words: 103287 - Pages: 414

Financial Statement Analysis

...Financial Statement Analysis Celeste Thompson, Marcy Newbern, Cynthia Rios, Lashun Nicholson, Joseph Terramgra ACC/561 August 30, 2010 Financial Statement Analysis The financial statement is a report that divulges a company’s past and present financial standings. The financial statement can be thought of as an economic picture for a company. A financial statement analysis is used by investors when an important business decision is to be made. A financial statement analysis can consist of various ratio calculations. This paper will provide information on three different companies and several calculated ratios, information on the differences in the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) and last the differences in industries and how they affect the presentation. Differences in the IASB and the FASB Domestic and foreign corporations have two different accounting standards to follow when preparing their financial statements. The FASB creates the standards for domestic companies and the IASB creates the standards for international organizations. Although the FASB and the IASB are currently working on a convergence project to streamline these accounting measures and create a set of standards that both domestic and international companies can use uniformly, this is a project that will take years to complete and perfect. For now, the differences in these standards...

Words: 1218 - Pages: 5

Financial Statement Analysis

...Report on | Financial Statement Analysis & Valuation of Monno Jute Stafllers | A report on “Financial Statement Analysis & Valuation of Monno Jute Stafllers ” Course Title: FINANCIAL STATEMENT ANALYSIS & VALUATION Course Code: F-401 Submitted To: Dr. Mahmood Osman Imam Professor Department of Finance, University of Dhaka Hussain Ahmed Enamul Huda Lecturer Department of Finance, University of Dhaka Submitted By: Sayma Khair 17-115 BBA 17th batch 4th year 1st semester Department of Finance, University of Dhaka Date of Submission: July22, 2014. Letter of Transmittal July 22, 2014 Mahmood Osman Imam Professor Department of Finance University of Dhaka Subject: Submission of term paper on Financial Statement Analysis & Valuation of Monno Jute Stafllers Dear sir, I am extremely gratified & enthusiastic to present a report on Financial Statement Analysis & Valuation Of Monno Jute Stafllers as per as a part of requirement of our BBA Program of Course “FINANCIAL STATEMENT ANALYSIS & VALUATION”, Course no: F-401 . This report was assigned to us with a view to scrutinizing our skill and flamboyance when it comes to financial statement analysis know-how. Moreover, the purpose of this term paper was to extract our inner ability & enhance our financial statement analysis & valuation related potentials. We acknowledge......

Words: 8567 - Pages: 35

Financial Statement Analysis

...Financial Statement Analysis ACC 561/PR May 24, 2014 Financial Statement Analysis A company owner or manager requires financial statements to improve their business or to make any important decision regarding their operations. Puerto Rico is a land that has many companies doing business, some are local or international. CVS Caremark Corporation is one of the main traded companies doing business here. This Corporation provides integrated pharmacy and health care services in United States and Puerto Rico (CVS 2014). CVS Caremark Corp. sells prescriptions drugs and over the counter but also provides a variety of products for everyday use, such as cosmetics, convenience foods among others. The following represent a brief analysis on the financial statements of the corporation. Taking the last year financial statement reported on December 2013, the current ratio for CVS Caremark is 1:6 which means that the current assets are more than its current liabilities. The current ratio illustrates CVS Caremark ability to remain solvent. On the contrary, the Corporation liquidity ratio is 0.926 which means CVS may not have enough liquid assets to pay their debts in a short period. The DuPont ratio reflects a 12.02 return on equity, measuring the Corporation efficiency at generating profits from every shareholder's equity. CVS has a profit margin of 23% this indicates that the Corporation is not having control of the cost compared to its competitors meaning that CVS has a net income......

Words: 775 - Pages: 4

Bebe Stores Analysis

...Bebe Stores inc. Seems to be a very wealthy company and a couple of years ago they were doing very well in the industry. Lately the company seems to be going through a huge transition that has affected there company greatly. Some people would say that the decision to close the PH8 brand was a bad decision. Yes if you look at the short term it is a bad decision but in the long run this company will do a lot better. For the past couple of years the company has lost money because it cost a lot of money for the company to discontinue their PH8 division. What closing the PH8 division does is open up a lot of cash within the company which they plan to use on the expansion of their business over seas. Many countries like india are starving to be able to get stores like bebe into their country which means there is little to no competition which means a lot of customers at very high profits. Due to this due to this if they are able to afford to transfer into that market you can expect that this company will have a lot of revenue in their future. So someone might say on the cover it looks like this store is struggling but when you really look into the financials of the company its pretty much the opposite. There is a lot of upside in to this company and to this industry. This company cannot be compared to other company’s in the industry. They are going through many changes and if you were to determine if the company is doing good or bad just based on how other companies in the......

Words: 687 - Pages: 3

Fianacial Statement Analysis Foundation

...Financial Statement Analysis Session #1: Fundamental Analysis and Valuation March 2015 In-Mu Haw (许 仁茂) 1 Create value through acquisition to build brands (over 100) 2 Lenovo vs. HP Stock Price Lenovo created value through acquisitions Poor acquisition (overpaid: $8.8B) $18 million in 2013 3 Deloitte Report Chet Wood, Managing Partner of Deloitte LLP, Merger & Acquisition Services: • • About 70 percent of all health plan M&As fail to create meaningful shareholder value. CFOs and management can take a stronger role in M&A deal evaluation, especially on revenue growth. 4 Use of Financial Statements for Valuation “I am considering to buy a small packing company. They offered me RMB 15 million and gave me their last 2 years’ Income Statements and Balance Sheets. I think it’s overpriced. How much do you think I should pay?” How will you use I/S and B/S to assess the target firm’s fair value? 5 Warren Buffet Emphasized importance of looking at a firm’s Competitive advantage of products Long-term growth potential… for good investment 6 Sound Fundamental Analysis    One does not buy a stock, one buys a business. When buying a business, know the business. Good firms can be bad buys (if overpriced). Price is what you pay, value is what you get.  Value of firm = Value of Debt + Value of Equity TA = L + SE (BV) on B/S 7 TA – L = SE SE (BV) vs. Market value of equity 8 Stock Price What is intrinsic value? Is the price overvalued? P/E=41: What earnings......

Words: 3056 - Pages: 13

Statement Analysis

...Comprehensive Statement Analysis Business organizations come in different forms, and although they all have financial gains and losses, not all have the same rules and regulations that need to be complied with when preparing financial statements. The Advantages and Disadvantages of the Different Forms of Business Organization Sole proprietorship is a business organization that is owned by one individual. The advantages to a sole proprietorship is that all profits go to the business-owner and that the owner has full control of the business (Kimmel, Weygandt, & Kieso, 2011). There are also some disadvantages in a sole proprietorship-such as the owner is personally liable for all debts and obligations of the business. Another disadvantage is that the business and the owner are not separate beings (Cheeseman, 2013). A business organization that is owned by two or more individuals is a partnership. The advantages to a having a business partnership are that there is more capital put into the business and that the obligations and debts are shared among each partner. Individuals who are part of a partnership can also deduct their losses through their personal income tax. There are a few disadvantages to being part of a partnership are that all profits are shared and that all decisions need to be made by each partner (Cheeseman, 2013). A C Corporation is any corporation that is taxed separately from its owners. Corporations are a “separate legal entity (or legal person) for......

Words: 1310 - Pages: 6