David Jones Limited Business Analysis

Executive Summary

David Jones Limited (DJS) and Harvey Norman Holdings Limited (HVN) are both Australia-based company. The principal activities for both DJS and HVN are department store retailing and consumer finance while HVN also include worldwide franchising and property enterprise in its business.

Firstly, in this report, a brief retailing industry overview and company introduction would be first given followed by a strategic analysis. Within the strategic analysis, detailed strategy implemented by companies will be discussed and further interpreted in the forecast section later. In addition, SWOT analysis is conducted to seek comparative advantages for the companies. Secondly, accounting analysis is performed to investigate the accounting quality and determine whether adjustments are required. Thirdly, detailed financial analysis based on historical data will be conducted to examine the financial performance of both companies. The analysis will be separated into 4 sections: Profitability, Efficiency, Liquidity and Solvency. In each section, the selected financial figures and ratios will be discussed along with strategies to evaluate the management of the company. After that, forecast on the companies' performance will be discussed. The forecast will be based on the strategies that the companies employ and the past effectiveness of those strategies. It will mainly focus on 3 sections: Macro-economic environment, Sale growth and Net operating margin after tax. Furthermore, estimation on the companies' value will be conducted based on the forecast and the valuation model followed by the sensitivity analysis. Lastly, investor recommendation on the company would be given based on the entire analysis.

Key results:

In Australia, the retail industry plays an important role in the Australian economy. The retail industry is one of the largest employers which accounts for 10.8%