Financial Analysis:

The first part of your project is to prepare a financial analysis of Abercrombie and Fitch. This analysis will help you to learn where your company sits currently, which will help you determine where to go with its strategy. Your financial analysis will be divided into the four components below. Note: You will be required to compare your answers to your company$$s competitor, America Eagle, which means you need to find the financial statements for the competitor, as well. When you prepare your analyses, below, you will be required to research why your company$$s numbers increased or decreased and compare them to the competitor. You DO NOT need to investigate why the competitor$$s numbers increased or decreased!

$1$ Profitability Analysis$-$a You will use Excel to prepare a trend analysis on your company$$s: $1$ Sales, $2$ Gross Profit, $3$ Net Income$/$Loss for the past four years. Show your company as well as the results for the competitor. You may show your data as a table in Excel. However, excellent presentations will take the data table and turn it into a chart$/$visualization of some kind.

Research each item $($sales$,$ gross profit, net income$/$loss$)$ for your presentation.

Cite findings.

b Use Excel to prepare a ratio analysis that shows: $1$ profit margin and $2$ return on assets for your company and the competitor. Be sure to calculate the ratios yourself, and not rely on summary ratios calculated by investor websites. Your Excel file must show the formulas for how you calculated the ratios. You may show your data as a table in Excel.

Discuss each item briefly. For example, is the return on assets for your company improving or not? Is your company$$s ROA higher or lower than competitor$$s$?$ Read the annual report, notes to the financial statements, and outside articles to explain why.

Remember, this is a detailed analysis.

$2$ Asset Analysis

a Use Excel to prepare a ratio analysis that shows: $1$ receivables turnover, and $2$ inventory turnover for your company and the competitor. Be sure to calculate the ratios yourself, and not rely on summary ratios calculated by investor websites. Your Excel file must show the formulas for how you calculated the ratios. You may show your data as a table in Excel. However, excellent presentations will take the data table and turn it into a chart$/$visualization of some kind.

Discuss each item briefly. For example, is your company$$s inventory turnover improving or not? Is your company$$s inventory turnover higher or lower than the competitor$$s$?$ Read the annual report, notes to the financial statements, and outside articles to explain why. Cite your findings.

$3$ Liquidity and Cash Flow Analysis

a Use Excel to prepare a trend analysis on your company$$s: $1$ Operating Cashflow. You may show your data as a table in Excel. However, excellent presentations will take the data table and turn it into a chart$/$visualization of some kind. You DO NOT need to show the competitor here.

Discuss each item briefly. For example, are cash flows from operations remaining positive?

b Prepare a ratio analysis that shows: $1$ current ratio for your company and the competitor.

Be sure to calculate the ratios yourself, and not rely on summary ratios calculated by

investor websites. Your Excel file must show the formulas for how you calculated the ratios.

You may show your data as a table in Excel.

Discuss each item briefly. For example, is the current ratio improving? Is your company$$s current ratio higher or lower than the competitor$$s$?$ Read the annual report, notes to the financial statements, and outside articles to explain why. Cite your findings.

$4$ Debt Analysis

a Prepare a ratio analysis that shows: debt to total assets $($debt ratio$)$ for your company and

the competitor. Be sure to calculate the ratios yourself, and not rely on summary ratios

calculated by investor websites. Your Excel file must show the formulas for how you

calculated the ratios. You may show your data as a table in Excel.

Discuss each item briefly. For example, is the debt ratio improving or not? Is your

company$$s debt ratio higher or lower than competitors? Read the annual report, notes to

the financial statements, and outside articles to explain why. Cite your findings.

Balanced Scorecard Strategy Map:

The final part of your project is to prepare a Balanced Scorecard Strategy Map. Now that you have completed the research on the company and competitors, it$$s time to fine$-$tune a Balanced Scorecard approach to helping the company achieve its overall strategy.

First, define the organization$$s strategy, as you see it$.$ Identify at least $3$ financial metrics, $3$ customer perspective metrics, $3$ internal business process perspective metrics, and $3$ learning and growth metrics that the company should measure to ensure their strategy is realized. Link them and prepare a visualization. This should look similar to Exhibit $12-9$ in your text or another way that you see fit. There are many examples of Balanced Scorecards on the internet.