Financial Analysis| Tiffany & Co.| 2019-2020 Luxury Brand Case Study Help
Asset Turnover Ratio = Sales/avg Assets
Assets Turnover Ratio for Tiffany for 2019 and 2020 are 0.18 and 0.1823, respectively. This means that Tiffany is generating its income with approximately 18% of its assets.
Inventory Turnover Ratio
The inventory turnover ratio is beneficial for the measurement of how well the company generates revenues from its inventory.
Inventory Turnover Ratio = COGS/Avg Inventory
Inventory Turnover Ratio for Tiffany for 2019 and 2020 are 0.67 and 0.68, respectively. The company has a large part of inventory contribution with its sales.
Leverage Ratio
Debt to Equity Ratio
Debt to Equity Ratio is utilized to assess an organization's money related influence. The D/E proportion is a significant measurement, utilized in corporate money. It is a ratio of how much an organization is financing its tasks through obligation versus entirely owned reserves.
Debt to Equity Ratio = Total Liability/Total Equity
The debt to equity ratio for the years 2019 and 2020 are 0.32 and 0.68. There is a visible change in the company’s debt to equity ratio, which means it is having a substantial growth.
Debt to Asset Ratio
It is a proportion of how much the organization is financing its activities through obligation versus entirely possessed assets. It discloses to you the level of an organization's absolute resources, which were financed by the loan bosses.
Debt to Asset Ratio = Total Liability/Total Assets
The debt to asset ratio for the years 2019 and 2020 are 0.17 and 0.28. This represents that in 2019; the company was not as much stable to retire its liabilities from its assets, but its ratio was increasing.
Interest Coverage Ratio
The Interest coverage ratio gauges how frequently the organization can cover its present premium installment, with its accessible profit. At the end of the day, it quantifies the edge of security thatthe organization has, for paying enthusiasm on its obligation during a given period.
Interest Coverage Ratio = EBIT/Interest Expense
The interest coverage ratio for the years 2019 and 2020 are: 19.9 and 19.03. The company covers the current interest payment from its earning. (See Appendix 1)
Price Earnings Ratios
Comparison of L’Oréal and Tiffany is on the basis of their price earnings ratio as 30.58 and 29. 9, respectively. This means that in comparison;L’Oréal is in a good performance as its share prices and its earnings are better than Tiffany’s. (See Appendix 2)
Investors Ratios
The investor’s ratios include: dividend ratio, earnings per share and price earnings ratio. It is used to measure the ability of the company to earn an adequate return on its investments. The Tiffany is generating a good return for its better future growth and sustainability.
Sustainability
Sustainability is profoundly imbued in Tiffany and Co.’s fundamental beliefs, and it has had a conventional sustainability program, set up for longer than 10 years. The company’s way of dealing with sustainability is supported by our faith in setting principles for greatness and utilizing promotion and vital charity to produce more extensive worth creation that reaches out past our business. There are three grapples to our manageability approach: we normally draw in partners to comprehend their needs, intermittently attempt a conventional materiality examination to additionally refine our methodology and keep up a settled arrangement of administration standards and responsibility structures. The company intermittently attempts a sustainability materiality examination to refine our vital waysof dealing with working the business in a natural and socially dependable manner. It leads this appraisal around once like clockwork; and we as of late have embraced our third materiality examination in 2018, during which we have connected with more than 600 internal and external partners.(Company, n.d.)
Conclusion
The company operates in the upper class and luxury area of the market. Although it has some competitors but it has maintained its reputation by providing quality products. The financial position of the company is quite stable all of its ratios, including: efficiency ratios, profitability ratios, leverage ratios and other ratios.The company is performing well and is earning a positive revenue. After a period of time; Tiffany and Co. got equivalent of the luxurious ways of life, of the Gilded Age. It later on had an advancement by turning into a vital piece of mainstream society, with films like "Breakfast at Tiffany's," just as a cherished honorary pathway adornment among the Hollywood's world-class. Today it has over 200 stores over the globe and an unquenchable fan base.......................................
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