Documente Academic
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Parent
Line of Business :
Clothing (Retail)
Founder
: Amancio Ortega
Headquarters
Freshness
Speed / quickness
Pricing
Pricing
Market-based
Different market sizes
Competitor
Analysis
PRICE +
FASHION -
FASHION +
PRICE -
Production
40% In-House
60% Outsourced
Outsourced
In-House
Outsourced
Production
Lead Times
Low
High
High
High
Net Margin
10.46%
9.60%
7.05%
-0.06%
1.25
1.96
0.74
1.82
ROA
13.05%
18.78%
5.25%
0.11%
ROE
22.88%
24.85%
11.93%
-0.27%
Asset Turnover
Advantages
Disadvantages
Vertical Integration
Financial
Statement
Analysis
Back
Vertical Analysis
2001
2000
1999
1998
100.00%
100.00%
100.00%
100.00%
48.10%
48.83%
48.57%
49.54%
Gross Margin
51.90%
51.17%
51.43%
50.46%
Operating Expenses
30.23%
31.22%
31.26%
30.30%
Operating Profits
21.68%
19.94%
20.17%
20.16%
Non-Operating Expenses
6.44%
5.84%
5.08%
5.99%
Pre-tax Income
15.23%
14.10%
14.37%
14.18%
Income Tax
4.61%
4.09%
4.24%
4.71%
Minority Interest
14.77%
0.10%
0.07%
0.01%
Net Income
10.47%
9.91%
10.06%
9.48%
Back
(Amounts in Million )
2001
2000
Increase
(Decrease)
% Change
3249.8
2614.7
635.1
24.29%
1563.1
1277
286.1
22.40%
Gross Margin
1686.7
1337.7
349
26.09%
Operating Expenses
982.3
816.2
166.1
20.35%
Operating Profits
704.4
521.5
182.9
35.07%
Non-Operating Expenses
209.3
152.7
56.6
37.07%
Pre-tax income
498.1
368.8
129.3
35.06%
Income tax
149.9
106.9
43
40.22%
4.8
2.7
2.1
77.78%
340.4
259.2
81.2
31.33%
Minority Interest
Net Income
Back
(Amounts in Million )
2001
2000
Increase
(decrease)
% change
Inventories
353.8
245.1
108.7
44.35%
Accounts Receivable
184.2
145.2
39
26.86%
315.7
210
105.7
50.33%
1336.8
1339.5
-2.7
-0.20%
414.5
167.8
246.7
147.02%
Accounts Payable
426.3
323
103.3
31.98%
407.9
347.3
60.6
17.45%
Non-current Liabilities
284.5
1437.7
-1153.2
-80.21%
Back
(Amounts in Million )
2001
2000
1999
1998
201.26%
161.93%
126.04%
100.00%
195.41%
159.64%
123.57%
100.00%
Gross Margin
207.01%
164.18%
128.46%
100.00%
Operating Expenses
200.80%
166.84%
130.05%
100.00%
Operating Profits
216.34%
160.17%
126.07%
100.00%
Non-Operating Expenses
216.44%
157.91%
122.13%
100.00%
Pre-tax income
206.30%
161.12%
127.74%
100.00%
Income tax
196.98%
140.47%
113.27%
100.00%
Minority Interest
24.00%
13.50%
7.50%
100.00%
Net Income
222.48%
169.41%
133.79%
100.00%
Back
2000
1999
Evaluation
24.29%
28.48%
26.04%
Good
22.40%
29.20%
23.57%
Good
26.09%
27.80%
28.46%
Good
10.47%
9.91%
10.06%
Ok
44.35%
30.03%
19.53%
Poor
Current Ratio
1.02
0.90
0.87
Ok
Quick Ratio
0.60
0.53
0.53
Ok
Working Capital
19.5
-70
-69.8
Ok
Inventory Turnover
5.22
5.89
5.71
Good
19.73
19.60
20.70
Good
69.92
61.97
63.92
Poor
18.50
18.62
17.63
Ok
Asset Turnover
1.25
1.24
1.15
Ok
Return On Assets
13.07%
12.30%
11.54%
Ok
Return On Equity
22.90%
22.10%
22.90%
Good
Financial Statement
Analysis
Outlook
Marketing Strategy
Geographical Penetration
Advertising
Marketing Strategy
Cheap, addictive and unsustainable
Quality scandals
Low price plus expanding too fast leads to quality
decline
Geographical Penetration
Consumers tastes and preferences
Research and development
Supply chain strategy
Advertising
Higher costs
Direct competition
Improvement of current system
Recommendations
Case Analysis
(Amounts in Million )
1999
1998
Increase
(Decrease)
% Change
Inventories
188.5
157.7
30.8
19.53%
Accounts Receivable
121.6
75
46.6
62.13%
171.8
158.8
13
8.19%
1127.4
880.4
247
28.06%
163.6
54.4
109.2
200.74%
Accounts Payable
276.1
215.6
60.5
28.06%
275.6
229.1
46.5
20.30%
Non-current Liabilities
1221.3
881.6
339.7
38.53%
(Amounts in Million )
2000
1999
Increase
(Decrease)
% Change
Inventories
245.1
188.5
56.6
30.03%
Accounts Receivable
145.2
121.6
23.6
19.41%
210
171.8
38.2
22.24%
1339.5
1127.4
212.1
18.81%
167.8
163.6
4.2
2.57%
323
276.1
46.9
16.99%
347.3
275.6
71.7
26.02%
Non-current Liabilities
1437.7
1221.3
216.4
17.72%
Accounts Payable
Amounts in Million
Income Statement Items
2001
2000
1999
1998
3249.8
2614.7
2035.1
1614.7
1563.1
1277
988.4
799.9
Gross Margin
1686.7
1337.7
1046.7
814.8
Operating Expenses
982.3
816.2
636.2
489.2
Operating Profits
704.4
521.5
410.5
325.6
Non-Operating Expenses
209.3
152.7
118.1
96.7
Pre-tax Income
498.1
368.8
292.4
228.9
Income Tax
149.9
106.9
86.2
76.1
4.8
2.7
1.5
-0.2
340.4
259.2
204.7
153
Minority Interest
Net Income
Amounts in Million
Balance sheet items
2001
2000
1999
1998
Inventories
353.8
245.1
188.5
157.7
Accounts Receivable
184.2
145.2
121.6
75
315.7
210
171.8
158.8
1336.8
1339.5
1127.4
880.4
414.5
167.8
163.6
54.4
Accounts Payable
426.3
323
276.1
215.6
407.9
347.3
275.6
229.1
Non-current Liabilities
284.5
1437.7
1221.3
881.6