Question 1
Refer to the consolidated financial statements (including notes) in the 2012 annual report of JB Hi-Fi Limited (www.jbhifi.com.au ) and answer the following:
1. What is the value of the business' sales revenue for the current and previous years? Calculate the percentage change in sales revenue.
2. What is the business' profit after tax for the current and previous years? Calculate the percentage change in profit after tax.
3. Compare the percentage changes calculated in 1. and 2. What information does this provide?
4. What is the total value of inventory for the current and previous years? Calculate the percentage change in inventory. Comment on the inventory management by comparingthe percentage change in inventory with the percentage calculated in 1.
5. Calculate inventory turnover for the current and previous years.What does the change in inventory turnover indicatewith respect to the profitability of the group?
6. Have trade receivables increased or decreased over this year, and by how much? Is the figure reported gross or net receivables?
7. What was the amount of bad debts written off for the current and previous years?What are the possible reasons for the change in the amount of bad debts written off?
8. Calculate the average collection period for trade receivables for the current and previous years using the gross method. Comment on the credit control performance of the group?(Hint: if net credit sales is not available, total salescan be used as a substitute to calculate the average collection period. Assuming the proportion of cash to credit sales has remained constant.)
9. Calculate appropriate profitability ratios for 2012 and 2011, and assess JB Hi-Fi's profit performance.