Question
JB Hi-Fi (JBH) and Kogan (KGN) are two ASX listed retail businesses from Consumer Discretionary sector. The following table provides the time series of key
- JB Hi-Fi (JBH) and Kogan (KGN) are two ASX listed retail businesses from Consumer Discretionary sector. The following table provides the time series of key financial ratios for these two companies.
| JBH | KGN | |||||
| Ratios | 2019 | 2020 | 2021 | 2019 | 2020 | 2021 |
| Net Profit Margin | 3.52% | 3.99% | 5.76% | 3.98% | 5.45% | 0.56% |
| EBIT Margin | 5.27% | 6.37% | 8.44% | 5.50% | 8.05% | 1.67% |
| ROE | 23.92% | 28.60% | 39.26% | 33.74% | 16.35% | 2.40% |
| ROA | 10.19% | 10.84% | 16.31% | 14.88% | 9.78% | 1.14% |
| Asset Turnover | 2.78 | 2.51 | 2.74 | 3.65 | 1.76 | 1.76 |
| Inventory Turnover | 8.00 | 10.71 | 9.50 | 5.70 | 4.36 | 3.40 |
| Debt to Equity Ratio (D/E) | 42.06% | 67.07% | 48.25% | 2.45% | 1.49% | 51.10% |
| Current Ratio | 1.38 | 0.93 | 1.07 | 1.68 | 2.32 | 2.04 |
| Quick Ratio | 0.42 | 0.38 | 0.38 | 0.52 | 1.34 | 0.63 |
| Price/Book Value | 2.84 | 4.47 | 4.44 | 8.73 | 9.29 | 6.83 |
| Days Receivables | 3.34 | 2.68 | 2.36 | 4.10 | 3.85 | 2.39 |
| Days Inventory | 45.61 | 34.08 | 38.43 | 64.00 | 83.73 | 107.27 |
Based on the ratios provided in the table above, compare and comment on the tends of
- Profitability
- Asset Management (or Asset Utilisation)
- Short term liquidity
for JB Hi Fi and Kogan. Justify your comments based on the ratios provided.
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