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Introduction

Managerial finance plays crucial role in the company so that finance can be utilised in proper way and meeting operational requirements. Present report deals with two companies such as JD Sports Fashion Plc and Sports-Direct International Plc engaged in retail sector of sports products. Financial ratios are being computed for company to assess performance of both rivals. On the other hand, investment appraisal methods such as NPV, ARR and payback period are calculated which clarifies whether investment should be made or not. Thus, overall financial performance can be analysed with the help of such techniques in effective manner.

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Portfolio 1

Question 1

A) Computation of financial ratios of organisations

   

2015

2016

Particulars

Formula

Sports Direct International Plc

JD Sports Fashion Plc

Sports Direct International Plc

JD Sports Fashion Plc

Current Assets

 

878297

400259

1311437

510695

Current Liabilities

 

382621

326748

540608

348154

Current Ratio

Current assets / Current liabilities

2.3

1.22

2.43

1.47

           

Current Assets

 

878297

400259

1311437

510695

Current Liabilities

 

382621

326748

540608

348154

Inventories

 

517054

91024

702158

106336

Prepaid Expenses

 

0

0

0

0

Acid Test Ratio

Liquid assets / Current liabilities

0.94

0.53

1.13

0.78

           

Gross Profit Margin

 

1240812

739550

1284644

884221

Net Sales

 

2832560

1522253

2904325

1821652

Gross Profit Margin

Gross profit / net sales * 100

43.81%

48.58%

44.23%

48.54%

           

Operating Profit Margin

 

8345

92646

11137

133406

Net Sales

 

2832560

1522253

2904325

1821652

Operating Profit Margin

Operating profit / net sales * 100

0.29%

6.09%

0.38%

7.32%

           

Net Profit Margin

 

241353

53971

278981

100630

Net Sales

 

2832560

1522253

2904325

1821652

Net Profit Margin

Net profit / net sales * 100

8.52%

3.55%

9.61%

5.52%

           

Debt

 

136849

374

333063

247

Equity

 

1161551

309991

1384728

400825

Gearing Ratios

Debt / Equity

11.78%

0.12%

24.05%

0.06%

           

Income Available For Equity Stakeholders

 

241353

53971

278981

100630

Outstanding Equity Shares

 

9798931.8

2707185.36

13056310.8

3539157.1

Earnings Per Share (EPS)

Income available for equity stakeholders / Outstanding equity shares

2.46

1.99

2.14

2.84

           

Operating Profit

 

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