Profit Margin shows the amount of income for every dollar of sales.
Guided Response: Respond to at least two of your fellow students’ or instructor posts in a substantive manner and provide information or concepts that they may not have considered.
Each response should have a minimum of 100 words and be respectful of others’ opinions and beliefs that differ from your own. Support your position by using information from the week’s readings.
You are encouraged to post your required replies earlier in the week to promote more meaningful and interactive discourse in this discussion forum. Continue to monitor the discussion forum until Day 7 and respond with robust dialogue to anyone who replies to your initial post.
COLLAPSE SUBDISCUSSION
Rebecca Cline
Rebecca Cline
Yesterday
Jun 2 at 7:54am
For this discussion I chose to analyze the 2020 annual report of Signet Jewelers.
Current Ration = current assets (BS)/current liabilities (BS)
As of 02/02/2020 (in Millions) current assets (3154.8)/ current liabilities (1652.6) = Current Ratio (1.91:1)As of 02/02/2019 (in Millions) current assets (2855.8)/ current liabilities (1033.0) = Current Ratio (2.76:1)Profit Margin = Net Income (IS)/ Net Sales or Revenues (IS)As of 02/02/2020 (in millions) Net income (105.5)/ Net sales (2223.7) = Profit Margin (4.7%)As of 02/02/2019 (in millions) Net income (-657.4)/ Net sales (-764.6) = Profit Margin (-30.4%)
According to our text, the higher a current ratio, the more liquid the company.The change in current ratios over the last two years tell me that there the company has become less liquid with a reduction in current ratio from 2.76:1 to 1.91:1. With the rule of thumb that 2:1 indicate short term financial health, there could be some concern for the short-term health of Signet Jewelers.
Profit Margin shows the amount of income for every dollar of sales. There was a significant change in Profit margin from 2019 to 2020. One thing that I found interesting was that the significant difference in Goodwill and intangible impairment which decreased from 735.4 million in 2019 to 47.7 million in 2020. The change in the 2019 to 2020 profit margin was due to a change in accounting method. The profit margin in 2020, is a much more realistic profit margin for a company to be able to be successful.
The Management Discussion section of the 2020 Financial Report of Signet Jewelers discusses the impacts of COVID-19. One thing that I found very interesting was that not only did all stores in the US and UK have to close, but the pandemic also effected other aspects of the company, such as their supply chain. The Management Discussion also goes on to discuss the exchange rate due to the fact that Signet Jewelers participates in international business.
The Auditor’s report was conducted by KPMG, LLP which is an independent registered public accounting firm. The Auditor’s report gives the opinion that the reports fairly represent the company in all material matter and that the company maintained effective internal controls. The Auditor’s did note that there was a change in between 2019 and 2020 in regards to the method of accounting the company used for leases.
This brief look at the 2020 annual report of Signet Jewelers leads me to believe that although there was a significant impact from COVID-19, the company is on the right track for a successful future.
Resource:FY 2020 Annual Report . Signet Jewelers . (2020, May 1). https://s26.q4cdn.com/755441662/files/doc_financials/annual/Signet-2020-Annual-Report.pdf
Answer preview to Profit Margin shows the amount of income for every dollar of sales.
APA
309 words