compare woolworths group to hmv group
holding a lot more stock, this is also evident in the stock turnover, where Woolworth’s take up to 50% longer to turn over than HMV. Woolworth’s pay their creditors quicker, but it takes them longer to receive payments from their debtors.
When looking at the investment ratios by themselves you can see what has happened during the financial year 20023, and what the shareholders fund is like. During this financial year HMV group have made a good earning on share value whereas Woolworth’s have made a loss, but if you consider the shareholders fund you will see that HMV are heavily in debt and need to gain in order to increase the value of the shares. Woolworth’s on the other hand have taken a loss, but when considering the shareholders funds the share value is strong, when looking at the profit and loss sheet (pg29 annual report 2002) I notice there are a few large payouts to kingfisher group because there has been a demerger. These large payments to kingfisher will apply to this year only, and with these payments being the blame for the loss made by Woolworth’s, if they have a similar year in terms of making profit the share prices will gain asset value. The future for both of these companies looks good, HMV is making a large profit making good earnings on their shares, if business continues the same, being a music and games store this is quite likely, HMV will recover the asset value of these shares. Woolworth’s now finished paying the extra costs of the demerger from kingfisher group can expect to cover all costs if business continues the same.