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Financial statement analysis of GAP and ANF
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GAPVS.
ANF
Financial Statement Analysis
Group 1
Angeles Huang Charles TowleRobin Thieu
Outline
Industry Overview (a)Companies Overview (b)Corporate Factsheets (b)Accounting Analysis Perspective
Capital Structure & Solvency (c) Short-term Liquidity (b)
Equity Analysis Perspective Asset Utilization (a) Return on Invested Capital (c)
Financial Analysis Perspective Profitability (a) Valuation (b)
Conclusion (a)
Ratios
RNOA/ ROCE
EPS/VALUE
ANF
Group 1
Apparel Industry
American Eagle Aeropostale J Crew Urban Outlet Nordstrom
GAP Inc.GAP Inc. ANF Co.ANF Co.
Companies Overview
1976 1996 2007
Corporate Factsheets
2007 Fiscal
Common-Size Analysis
2007 Fiscal
Capital Structure - Solvency
Accounting Analysis Perspective
Liquidity
Accounting Analysis Perspective
Liquidity
Accounting Analysis Perspective
S&P Short-Term Issuer Credit
Rating: BB+
Cash reinvestment ratio
Accounting Analysis Perspective
Asset Utilization
Sales to Cash Eq. 5.49 4.70 3.99 3.43 3.65
Sales to Receivables - - - - -
Sales to inventories 9.35 9.12 9.13 9.25 8.45
Sales to working capital 19.07 11.55 9.72 8.01 7.55
Sales to PPE 4.88 4.94 4.84 4.82 4.44
Sales to total assets 1.92 1.83 1.70 1.60 1.57
Sales to Cash Eq. 6.36 6.69 6.86 4.64 3.70
Sales to Receivables 77.28 77.99 81.92 121.31 193.42
Sales to inventories 9.86 8.40 9.71 10.59 10.85
Sales to working capital 12.56 11.41 12.23 16.96 7.73
Sales to PPE 3.11 3.48 3.71 3.07 3.34
Sales to total assets 1.56 1.64 1.78 1.48 1.44
Equity Analysis Perspective
RNOA
ANF 2007 RNOANOPAT $ 457
= 20.3%Avg NOA $ 1,512 Sales $ 3,750 Profit margin = 11.87%Asset turnover = 2.48
RNOA = 20.3%
GAP 2007 RNOANOPAT $ 832
= 11.1%Avg NOA $ 5,075 Sales $ 15,763 Profit margin = 5.14%Asset turnover = 2.25
RNOA = 11.1%
GAP vs ANFand
Industries' RNOA
GAP
ANF
Equity Analysis Perspective
ROCE
Equity Analysis Perspective
Profitability
Financial Analysis Perspective
PB ratio 3.30 3.42 3.22
EPS 1.05 0.94 1.26
PE Ratio 17 23 16
PB ratio 3.87 5.29 6.62
EPS 5.51 4.78 3.80
PE Ratio 13 18 20
Valuation
Financial Analysis Perspective
Conclusion
GAP ANF Chosen
Current Ratio 1.68 2.10 ANF
Cash to Current Liabilities 79.7% 119.4% ANF
Asset turnover 3.11 2.48 ANF
Profit margin 5.28% 12.18% ANF
RNOA 16.39% 30.20% ANF
ROCE 17.63% 31.47% ANF
EPS 1.05 5.51 ANF
Valuation $ 18.44 $ 116.91 ANF
Market price (5/13/2008) $ 18.85 $ 72.65
SELL/HOLDBUY
Conclusion
Thank you very much !!!
Group 1
