Case Study- Company Situation (Financial Analysis & SWOT Analysis Essay

Case Study- ships come with Situation ( financial Analysis & SWOT Analysis only) - Essay ExampleBased on the rising revenues and brim data, it is possible to conclude that Inditex is at the harvest phase of the life cycle, while Benetton, the GAP, and H&M are at maturity and stability phase, as their revenues and margins are declining. Financial Ratio Analysis - Inditex Profitability take in profit margin of the community is fairly high 59%, which implies that the follow has effective outsourcing manufacturing outline and has life-threatening relationships with suppliers. Both factors have positive impact on cost reduction. Operating profit margin is 18%, which means that the company makes 0,18 cents for e rattling Euro of gross revenue (before taxes). Net profit margin is 14% and it means that the company has good control over its costs. ROA ratio which is 19% means that the company is effectively using its investment, converting it into profit. hard roe Liquidity Current ratio of the company is 2,0 suggests that the company has a good ability to pay backward its succinct-term liabilities with the short-term assets it has. This means that Inditex is capable to cover up its strain expansion strategy and to avoid insolvency during the lazy growth phases. The quick ratio of 1,5 means that Inditex position has enough liquid assets to cover its current liabilities. Thus, the company can implement its strategy of fast fashion being capable to pay quickly for its orders and to kepp short farm animal turnover. Leverage Debt-to-Equity ratio (0.42) indicates that the companys debt used to finance its operations is not so high and is a positive sign of backbreaking financial position of the Inditex. This indicates that the company is financially strong enough to grow its business due to its profits rather than debts. Long-term debt-to-equity ratio is relatively gloomy and indicates on the companys financial stability. Activity Inventory turnover at 4,5 0 indicates that the company has cost-efficient supply chain and can continue taking its course of fast fashion retailer. Days of inventory ratio is equal to average 81.0 days. This indicator seems to be fairly high for the company focusing on fast fashion strategy. Average collection period is 13,4 days, which is quite low and therefore optimal for Inditex to continue its aggressive business development strategy. Financial Analysis has shown that Zaras overall financial position is very strong and enabling for implementing its strategy of future sales and stores growth. SWOT Analysis Strengths The companys strategy is based on aggressive multichannel global business expansion which is implemented due to its flexible business model based on having the right fashions at the right time at affordable prices. Financial state of the company rated as healthy allows the company to have enough capital for future growth and investments. Global expansion of Zaras stores and its responsive ma rketing strategy increase global brand awareness. completely these result in strong sales and revenue growth. Effective supply chain management allows the company to be competitive on the market balancing the quality of its goods and affordable prices for mass market consumers. elegant human resource management is another strategic strength of the company which enables the company to grow its sales and gain positive reputation. Design of new stores in