3. Name: Ms. Wanna Lui
Amt. of Investment: S$100,000
Investment timeframe: 5 years
Expected investment return: 5% p.a.
Introduction Abt. Industry Co.’s Profile Competitors SWOT
Client’s Profile
4. Selling commodities directly to consumers
Introduction Abt. Industry Co.’s Profile Competitors SWOT
About the Industry
Wide range of products and services
Singapore’s retail industries generated
S$35 billion in sales
Provided many job opportunities for locals
Competency is correlated to wide
selection of products provided
5. With increased competitions, department
store needs to consider on both breath and
depth of their products
Introduction Abt. Industry Co.’s Profile Competitors SWOT
About the Industry
New shopping malls
• Tampines 1, 313 @ Somerset, ION, Orchard
Central & Iluma
Q1 2010 Forecast
• Total retail sales will grow from an estimated
US$28.19 billion (Year 2009) to US$40.40 billion by
Year 2014
6. Conversion from Isetan
Emporium (Singapore) Pte
Ltd to Isetan (Singapore)
Ltd; offered shares to the
public
Introduction Abt. Industry Co.’s Profile Competitors SWOT
Company Background
1970
Incorporated and
headquartered in
Singapore
1972
Opened its first store;
the 1st Japanese dept.
store to be opened in
Singapore
1981
7. Trade in general merchandise
Engaged in the business of operating department
stores, supermarket and trading in general
merchandise
Offers corporate gifts, bulk buying and prizes &
trophies for sports events
Provides floral bouquets delivery &
courier services
Introduction Abt. Industry Co.’s Profile Competitors SWOT
Company Background
8. Introduction Abt. Industry Co.’s Profile Competitors SWOT
Company Background
• Retailing
• Operating
Retailing
• Leasing of
property
Others
Business Segment Stores Operating in…
Scotts Orchard
Katong Tampines
Standalone Mango Boutique
• Intl’ fashion designer lines, cosmetics and
family-oriented merchandise
• Catering to both local and tourist markets
10. • Rank in accordance to Share Capital
1. Metro – S$630,776,676
2. C K Tang Ltd – S$236,984,226
3. Robinsons – S$85,937,494
• Compared to Isetan (S$41,250,000), the
main competitor is…
Main Competitor
Introduction Abt. Industry Co.’s Profile Competitors SWOT
11. • Rank in accordance to No. of Outlets
1. Metro – 4
2. C K Tang Ltd – 1
3. Robinsons – 3
• Compared to Isetan (4), the main
competitor is still…
Main Competitor
Introduction Abt. Industry Co.’s Profile Competitors SWOT
13. Introduction Abt. Industry Co.’s Profile Competitors SWOT
Sourcing & Merchandizing
Strengths of Isetan: Being a step ahead of Metro, Isetan will be able to attract more
consumers to the exclusive brands they have.
ᴥ Secured exclusive brands & promotions
ᴥ Wide range of international collection
ᴥ Technology used to analyze customers
buying patterns
ISETAN
ᴥ Will be refreshing merchandise mix by
improving new brands and new layouts
ᴥ Will be incorporating more lifestyle
concepts in stores
METRO
Product Quality
Strengths of Isetan: Improve customers’ satisfaction, thereby, able to retain and
concurrently, attracting more consumers.
ᴥ Personalized shopping experience
ᴥ Enhanced customer benefits
ᴥ Places importance on listening to
customers and serving their needs and
wants
ISETAN
ᴥ No personalized shopping experience
METRO
14. Introduction Abt. Industry Co.’s Profile Competitors SWOT
Distribution of Products
Strengths of Isetan: Having a bigger storage space will enable Isetan to maintain adequate
goods to meet consumers’ needs. In addition, the risk of experiencing out-of-stock
problem will be lower as compared to Metro’s. With the supermarket, Isetan has a wider
range of products which in turn increases market share.
ᴥ A 7-storey high warehouse located in the
area of Macpherson
ᴥ Presence of a supermarket
ISETAN
ᴥ A single-storey warehouse & 3-storey office
annex located along Pasir Panjang Rd
ᴥ No supermarket
METRO
Financing
Strengths of Isetan: Equity financing is less costly in the long run and bears lesser risk as
compared to debt financing. For debt financing, companies are exposed to risks such as
forex from their borrowings.
ᴥ Equity financing
ISETAN
ᴥ Debt financing
ᴥ Large amount of bank borrowings
METRO
15. Awards & Recognition
Introduction Abt. Industry Co.’s Profile Competitors SWOT
ISETAN
1979 – Most Courteous Store Award by STB
1981 – 1st dept. store to receive award from
Skills Development Fund for training in
Japan
1986 – Isetan Orchard was awarded
outstanding planning & design in an intl’
competition
1987 – Sponsored Singapore’s 25th National
Day Book to share its commitment in the
pursuit of excellence
1997 – NTUC awarded plaque of commendation
for good labor union relations; Member’s
Choice Award by Diners Club
2009 – Improved Corporate Governance (Band
3 in 2008 to Band 2 in 2009)
2006 – Received more than
double the no. of Gold &
Silver excellence awards
as compared to 2005
2009 – Improved Corporate
Governance (Band 5 in
2008 to Band 2 in 2009)
People Developer Standard
certifications
Singapore Service Class
certifications
METRO
16. Human Resources
Directors are equipped with relevant industry
experience
Executives posses relevant qualification and
work experience
Employees retained despite of poor economy
In-house and external training
Bonuses rewarded = performance
Introduction Abt. Industry Co.’s Profile Competitors SWOT
Strengths - Isetan
Marketing &
Promotional
Strategies
Vigilantly monitoring of changes to consumers’
needs
Target customers includes both men and
women
Innovative merchandising and marketing
strategies
18. Introduction Abt. Industry Co.’s Profile Competitors SWOT
Dependency on Retail Segment
Weakness of Isetan: Investing in properties yields a higher return and since Isetan’s focus
is not on investment properties, then it may have a lower net income as compared to
Metro.
ᴥ Accounts for the major portion of income
ᴥ Risk ≠ Well-diversified (into other possible
sectors)
ISETAN
ᴥ Diversified aspects of generating revenue
ᴥ Risks are well-diversified into both retail
and properties
METRO
Weakness - Isetan
19. Poor cash flow management
Position is not well-maintained in the industry
ᴥ Decreasing ROI for the past 5 FY
ᴥ 6.0% (FY 2004) to -0.6% (FY 2008)
ᴥ Positive cash flow from operating activities; Net decrease in
cash & cash equivalents
ᴥ Due to huge amt. of acquisition of financial assets (HTM)
Weakness - Isetan
Introduction Abt. Industry Co.’s Profile Competitors SWOT
21. $ Merger with Mitsukoshi Ltd (Jap. Dept. Store)
Integrate wealthier clientele base = Boosts
retail presence
In a better position to cope with intense
competition
$ Robust economic growth (Overseas Expansion)
≈ 5.5% (Year 2009) & 6.9% (Year 2010)
Immense opportunities to diversify its
operations in established nations
$ Jobs credit scheme (Relating to Year 2009)
Cope effectively with economic downturn
Retains existing talents without affecting
business
$ Development in e-shopping interface
A convenient platform to purchase goods
Attracts more consumers to patronize with a
diverse selection of products
Opportunities
Introduction Abt. Industry Co.’s Profile Competitors SWOT
$ Promotion of tourism industry by Govt.
Policies are adopted by Singapore Govt. to
attract more tourists into Singapore
23. Terrorism & Pandemic
Despite
increasing
revenue for 5
FYs
Amt.
increased is
decreasing
drastically
14.91% (Yr
2004) to 3.26%
(Yr 2008)
Economic
slowdown =
More cautious
in spending
Businesses
lose confidence
Changes in
consumers’
fashion taste
Effects of
inflation, global
economic crisis
Fluctuating oil
& commodities
prices
Deterioration
of business
confidence
Introduction
of new fashion
brands
A surge in
competitors in
both town &
suburban areas
(313 @
Somerset, ION,
Orchard
Central…)
Deter people
from patronizing
Held back for
the fear of both
terrorist attacks
& pandemic
Economic conditions affecting
retail industry
Change in consumer trends
Competitors within industry
Poor revenue growth
Threats
Introduction Abt. Industry Co.’s Profile Competitors SWOT
31. From year 2007 to 2008, Isetan’s Sales had
increased by 3.26%.
Despite tough operating environment, Isetan managed to register
growth in Sales turnover.
Sales Ratio Analysis- Isetan
Achieved through combination of actions:
• Securing exclusive brands and promotions
• Improve on products and events which had good response
• Leverage on technology to analyze customer buying pattern
• Optimized merchandising and marketing programmes
32. From year 2007 to 2008, Isetan’s Sales had
increased by 3.26%.
Aspects to be considered for Isetan’s sustainability of its sales
Sales Ratio Analysis- Isetan
• Broad-based slowdown in Singapore economy
• Competitors introducing new fashion brands
• New upcoming malls in Orchard shopping belt and suburban area
• Isetan Scotts’ men’s level underwent major remodeling
• Enhance sales service through in-house/external staff training
• Introduced product advisor service for babies department
34. Year 2008 Year 2009 %
Sales Ratio
224,409 200,285 -10.75Metro
35. From year 2008 to 2009, Metro’s Sales had
decreased by 10.75%.
In face of slowdown consumption and tourism, Metro’s sales were
affected.
Sales Ratio Analysis- Metro
Factors attributable the generating and sustaining of sales:
• Four “Accessorize” specialty shops opened in Singapore
• Strategies to continually refresh merchandise mix
• Adopting new marketing platforms
• Improving store layout/Incorporate more lifestyle concepts
• Slowdown of Singapore economy
• Metro City Square due to open in 3QFY2010
38. Gross Profit Margin Ratio
Year 2007 Year 2008 %
Isetan 89,066/ 328,637
= 27.10%
91,477/ 339,360
= 26.96%
Gross Profit Margin Ratio =
Gross Profit
Sales
-0.14
39. From year 2007 to 2008, Isetan’s GPM had
decreased by 0.14%.
There is a minor fluctuation of Gross Profit Margin Ratio between
two years.
Gross Profit Margin Analysis - Isetan
There is an increase in purchases of inventories and related cost
of $10,059.
However, there is a substantial decrease in changes in inventories
of finished goods of $1,747.
40. • Cost of goods have risen due to change in commodity price
• Isetan’s may have weak pricing power (bargain sales)
• Unsold items forced to sell it at lower price
• Goods are price elastic, Isetan’s sales may be affected.
Gross Profit Margin Analysis - Isetan
However, the downward trend in gross margin suggest that cost of
goods sold is increasing which can affect future gross profit.
Hence, from the above analysis it can be deduced that Isetan’s
still generally efficient in managing its COGS.
From year 2007 to 2008, Isetan’s GPM had
decreased by 0.14%.
43. Year 2008 Year 2009 %
Metro
Gross Profit Margin Ratio
47,410/ 224,409
= 21.27%
45,211/ 200,285
= 22.57%
+1.30
Gross Profit Margin Ratio =
Gross Profit
Sales
44. From year 2008 to 2009, Isetan’s GPM had
increased by 1.30%.
This indicates that Metro is efficient in managing its cost of sales
and are more liquid with more cash flow.
Gross Profit Margin Analysis - Metro
There is a decrease in sales of $24,124 and cost of sales of
$21,925.
The increase in GPM could mean that Metro has a favorable
pricing power in midst of rising cost of sales.
49. Net Profit Margin Ratio
Year 2007 Year 2008 %
Isetan 14,849/ 328,637
= 4.52%
(14,787-1,621)/ 339,360
= 3.88%
Net Profit Margin Ratio =
Net Profit
Sales
-0.64
50. From year 2007 to 2008, Isetan’s NPM had
decreased by 0.64%.
This indicates that company is generating 0.64 cents less in profit
for every dollar in sales compared to previous year.
Net Profit Margin Analysis - Isetan
Contributing factors:
• Higher expenses like depreciation and rent
• Exceptional items accounted for (Gain on dilution of share)
52. Year 2008 Year 2009 %
Metro
Net Profit Margin Ratio
66,283/ 224,409
= 29.54%
39,623/ 200,285
= 19.78%
-9.76
Net Profit Margin Ratio =
Net Profit
Sales
53. From year 2008 to 2009, Metro’s NPM had
decreased by 9.76%.
This indicates that company is generating 9.76 cents less in profit
for every dollar in sales compared to previous year.
Net Profit Margin Analysis - Metro
Contributing factor:
• Fair value of adjustment on investment properties resulted
huge deficit
• Efforts by authorities to stabilize
54. Are the profits adequate and sustainable?
• Sales ↑ 3.26% which achieved through sales strategy
• Gross Profit Margin ↓0.14% due to increase in cost of goods
sold and decrease in changes of inventories of finished goods
• Net Profit ↓0.64% due to higher expenses like depreciation
and rent
Profits are adequate, Isetan managed to register growth in Sales
turnover and able to pay dividends to its shareholders despite
economic downturn.
Profits are sustainable because
•Isetan Scotts’ men’s level underwent major remodeling
•Enhance sales service through in-house/external staff training
•Technology used to analyze customers buying patterns
55. Is the co. investing enough to safeguard
future profitability?
57. Fixed Asset Turnover Ratio
Year 2007 Year 2008 %
Isetan 328,637/ 86,548
= 3.80
339,360/ 88,216
= 3.85
FA Turnover Ratio =
Sales
Net Fixed
Asset
+1.32
58. From year 2007 to 2008, Isetan’s FA ratio had
increased from 3.80 to 3.85.
This indicates an increased efficiency utilization of FA (property,
plant & equipment) to generate sales.
Fixed Asset Turnover Ratio Analysis - Isetan
As there are more additions of office & shop equipment, the amt.
of FA bal. increases as well, from $86,548 to $88,216 (% of
1.92)
As Isetan launched its personalized shopping experience &
improved its customer satisfaction, it was able to retain & attract
more customers.
59. Thereby, leading to an overall increase of FA turnover.
Fixed Asset Turnover Ratio Analysis - Isetan
The increases in FA is matched by a corresponding increase in
sales, from $328,637 to $339,360 (% of 3.27)
Hence, from the above analysis, it can be deduced that the
increase in the FA turnover ratio is mainly due to the increase in
sales.
From year 2007 to 2008, Isetan’s FA ratio had
increased from 3.80 to 3.85.
61. Year 2008 Year 2009 %
Metro
Fixed Asset Turnover Ratio
224,409/ 11,874
= 18.90
200,285/ 11,965
= 16.74
-11.43
FA Turnover Ratio =
Sales
Net Fixed
Asset
62. From year 2008 to 2009, Metro’s FA ratio had
decreased from 18.90 to 16.74.
Fixed Asset Turnover Ratio Analysis - Metro
However, the amt. was partially net off against the amt. of
leasehold land & building reclassified as investment properties.
This indicates there may be a declined efficiency in the utilization
of FA (property, plant & equipment) to generate sales.
The main contributing factor that resulted in an increase of net FA
balance was the revaluation surplus of freehold land.
63. From year 2008 to 2009, Metro’s FA ratio had
decreased from 18.90 to 16.74.
As Metro is considered to be a step slower than Isetan in
revitalizing their merchandise, for instance, securing exclusive
brands, they tend to lose customers.
Fixed Asset Turnover Ratio Analysis - Metro
Its warehouse is not as big as Isetan’s, therefore, it is possible
that Metro faced out-of-stock situations, hence, unable to cater to
customers’ demands.
The resulting increase of FA is from $11,874 to $11,965 (% of
0.77)
64. From year 2007 to 2008, Metro’s FA ratio had
decreased from 18.90 to 16.74.
Thereby, leading to an overall decrease of FA turnover.
Fixed Asset Turnover Ratio Analysis - Metro
Hence, from the above analysis, it can be deduced that the
decrease in the FA turnover ratio is mainly due to the decrease in
sales.
As a result, sales figures declined from $224,409 to $200,285 (%
of 10.75).
65. Is Isetan investing sufficient?
Based on the above ratios calculate, Isetan’s FA
turnover ratio is lower than Metro’s.
This indicates that
Isetan is more
active in acquiring
FA to generate
future income.
Which is supported
by the reports of Isetan
acquiring additional
shop equipment
So as to cater to its
newly launched product
strategy of enhanced
customer benefits
66. Are the finances of the company sensibly and
effectively structured?
68. Debt-Equity Ratio
Year 2007 Year 2008 %
Isetan 68,112 / 158,796
≈ 0.43
69,706 / 171,986
≈ 0.41
Debt-Equity Ratio =
Total Liabilities
Total Shareholder’s
Equity
-4.65
69. From year 2007 to 2008, Isetan’s debt-equity
ratio has decreased from 0.43 to 0.41
As the ratio is less than 1, it implies that Isetan has sufficient
assets to cover its long-term obligations.
Debt-Equity Ratio Analysis - Isetan
Low risk of insolvency by adopting a conservative financing
strategy of relying entirely on equity rather than debt Not as
“highly leveraged”
• Retail industry and not capital-intensive
• Not expanding too much in year 2008
• Announcement of expansion plans in Nex Mall in Year 2009
• Will only have a definite impact on its ratio only in FY 2009
70. From year 2007 to 2008, Isetan’s debt-equity
ratio has decreased from 0.43 to 0.41
The decrease was due to an increase in its retained earnings
which was a result of its dividends being paid out. The dividends
paid out were 2 cents per share.
Debt-Equity Ratio Analysis - Isetan
• However, its directors have maintained that the final dividend of
7.5 cents share will be paid out as usual like FY 2007
• This will only affect it FY 2009 accounts
72. From year 2007 to 2008, Isetan’s debt-equity
ratio had decreased from 0.43 to 0.41
• Solely depends on equity financing.
• Advantage: Low insolvency risk, less costly in the long run & bears
lesser risk as compared to debt financing
• Downside: Pressures by Isetan to ensure that they retain its
shareholders and its share price
Debt-Equity Ratio Analysis - Isetan
• If Isetan uses debt financing, it will be exposed to risks such as
forex from their borrowings
• However, it is advantageous since it is possible for them to use
these finances to generate more earnings & is tax deductible
75. Isetan’s financial leverage is relatively good since it has
a low debt-equity ratio and does not have to worry
about interest expenses that come with borrowing.
Overall Analysis for Isetan
76. Times Interest Earned Ratio
Year 2007 Year 2008 %
Isetan 18,632 / 0
≈ N.A.
18,264 / 0
≈ N.A.
Times Interest
Earned Ratio
EBIT
Interest Expense
N.A.
=
77. From year 2007 to 2008, Isetan has negligible
change in its TIE Ratio
Times Interest Earned Analysis - Isetan
Retail Industry and has an elastic demand for its goods
dependent on consumers sentiments
Isetan has adopted the conservative strategy of equity
financing alone for its operations
Does not have to worry about the obligations that comes with
debt borrowing. Due to this, it has negligible times interest
earned.
79. Debt-Equity Ratio
Year 2008 Year 2009 %
Metro 345,705 / 888,219
≈ 0.39
376,870 / 936,572
≈ 0.40
Debt-Equity Ratio =
Total Liabilities
Total Shareholder’s
Equity
+2.56
80. From year 2008 to 200, Metro’s debt-equity
ratio have increased from 0.39 to 0.40
As the ratio is less than 1, it implies that Metro has sufficient
assets to cover its long-term obligations.
Debt-Equity Ratio Analysis - Metro
Unlike Isetan, Metro has adopted a strategy of having a mixture of
debt financing with equity financing.
The increase in its debt-equity ratio is due to the increase in its
long-term liabilities which is being held by its jointly controlled
entities in China.
82. From year 2008 to 200, Metro’s debt-equity
ratio have increased from 0.39 to 0.40
Its equity reserves have increased is not due to any issue of
shares to its shareholders but is mainly due to its foreign currency
translation reserve as well as its revenue reserves
Debt-Equity Ratio Analysis - Metro
By using debt financing, Metro may be able to use it to finance
its operations and generate earnings as reflected in cash flow
statements increase in its cash generated from operations
84. From year 2008 to 2009, Metro’s debt-equity
ratio have increased from 0.39 to 0.40
• Advantages of Debt financing
o Gain tax benefits
o Obligations are limited only to the loan repayment period.
o Less expensive for Metro in the long-term
Debt-Equity Ratio Analysis - Metro
• Disadvantages of Debt Financing
o Might cause Metro too much to handle and finance its
investments in China subsidiaries and its business activities
87. Times Interest Earned Ratio
Year 2008 Year 2009 %
Metro 86,482 / 11,232
≈ 7.70
38,947 / 10,283
≈ 3.79
Times Interest
Earned Ratio
EBIT
Interest Expense
-50.78
=
88. From year 2008 to 2009, Metro’s TIE ratio has
decreased from 7.70 to 3.79
Times Interest Earned Analysis - Metro
This shows that Metro may have a higher debt burden and a
greater possibility of insolvency.
• Retail industry which is very volatile
• Heavily dependent on consumers spending power and their
preferences, demand is very elastic.
• Very important for Metro to maintain a high interest coverage
ratio.
89. From year 2008 to 2009, Metro’s TIE ratio has
decreased from 7.70 to 3.79
Times Interest Earned Analysis - Metro
Metro’s TIE ratio of 3.79 might not give investors the
confidence that they will be able to pay its interest obligations
when it falls due.
However, its debt-equity ratio of 0.40 shows otherwise.
Its debt-equity ratio establishes that Metro
• Maintains a relatively low risk of facing insolvency issues
since it has a balanced strategy of using both debt and equity
financing.
90. Is Isetan’s finances effectively structured?
Based on the above ratios calculate, Isetan’s
Debt-Equity Ratio is comparative with Metro
This indicates that
Isetan has good
financial
leveraging, low risk
of insolvency.
However, there is
room for
improvements
Due to Isetan’s
conservative policy of
maintaining equity
financing
Could improve its
finances through debt
financing to improve
revenue
Note:
Wide range of products includes clothing, shoes, electronics, computers, furniture, appliances and hardware
Note
1. John Little and Marks & Spencer are under the Robinsons holding.
Note:
1. Discretionary bonuses rewarded tied to company and individual performance
Note:
In accordance to the points above, the category of factors is as follows;
Legal
Economy – For Asia as a whole, example, Japan, Thailand and Malaysia
Political
Technology
Political
Note:
In accordance to the points above, the category of factors is as follows;
Economy
Social
Industry – Specific factor
Economy
Social
In the face of the tough operating environment,
we expect many retailers to resort to bargain sales
to alleviate the effects of decreased consumer
spending. While bargain sales may boost turnover, it
will also add pressure on profit margins.
Despite the tough conditions experienced in financial year 2008, the Group has managed to
register growth in its sales turnover. This was achieved through a combination of actions like
securing exclusive brands and promotions, and more importantly, catering to what customers
really want. For the products and events that we have introduced and which have had very
good response, we try to make it even better. We also leverage on technology to analyze
our customers buying patterns and adjust our merchandising and marketing programmes
accordingly.
government has forecasted
the Singapore economy to grow between -5.0% and
-2.0% in 2009. Already, we have seen retrenchments
and other cost–cutting measures being put in place
by businesses to deal with the current difficulties. All
this will quickly translate into consumers being more
cautious, as well as changes in their consumption
pattern.
Sub-Urban Reach
Our venture into the sub-urban area started with our Katong Store in Parkway Parade in
1983. The store, which has enjoyed the patronage of our customers for many years, led us to
open another store in Tampines Mall, in 1995. The Tampines store was given a total revamp
in 2007 and has since been very well received by our customers.
We are constantly faced with new challenges such as our competitors introducing new
fashion brands, as well as new upcoming malls in the Orchard shopping belt and in the
suburban area. Part of our strategy is to continue with our efforts to give our customers a
pleasant and visually pleasing shopping experience. Our Men’s level at Isetan Scotts has had
a major remodeling and is now positioned as a style and sports haven for the new age men.
Besides housing exclusive brands, we have also enhanced our sales service by training our
staff in shirt measurement and shoe fitting. Like the product advisor service introduced at
our Babies Department recently, these are part of our on-going efforts to render more valueadded
services to our customers.
We continue to grow our pool of loyal customers through our Isetan Privilege Card (IPC) and
Isetan Credit Card (ICC). The IPC, which is a point accumulation card, continue to enjoy good
responses in its recruitment drives. Recently, we have enhanced the benefit of this card by
awarding points for entitled purchases made at our supermarket.
We also have four
“Accessorize” specialty shops in
Singapore under our retail portfolio.
Going forward, we will look
at strategies to continually
refresh our merchandise mix
by introducing new brands.
We will also look at adopting new
marketing platforms, improving
store layout and incorporating
more lifestyle concepts in our
stores to create a more exciting
retail experience for our customers.
Retail industry and not capital-intensive one so it is not as highly leveraged. Moreover, it is not really expanding too much at the moment in year 2008. Isetan has only announced its expansion plans to establish its new oulet at Nex Mall in Serangoon in Year 2009. This amount will only, definitely have an impact on its ratio only in Year 2009. (opportunities)
Retail industry and not capital-intensive one so it is not as highly leveraged. Moreover, it is not really expanding too The decrease was accounted for since Isetan had an increase in its retained earnings which was a result of its dividends being paid out. The dividends paid out were 2 cents per share.
Even though Isetan has only paid out dividends of 2 cents per share, its directors have maintained that the final dividend of 7.5 cents share as before like year 2007, will be paid out to them but it will only affect it next year’s financial statements. (Page 66 and 67 of Isetan) there has not been much of a change in its shareholdings
For debt financing, companies are exposed to risks such as forex from their borrowings.
However, the usage of debt financing could be advantageous to Isetan for they can use it since it is possible for them to use these finances to generate more earnings. Moreover, debt financing is advantageous as it is tax deductible.
For debt financing, companies are exposed to risks such as forex from their borrowings.
However, the usage of debt financing could be advantageous to Isetan for they can use it since it is possible for them to use these finances to generate more earnings. Moreover, debt financing is advantageous as it is tax deductible.
For debt financing, companies are exposed to risks such as forex from their borrowings.
However, the usage of debt financing could be advantageous to Isetan for they can use it since it is possible for them to use these finances to generate more earnings. Moreover, debt financing is advantageous as it is tax deductible.
The debt-equity ratio has increased from 0.39 to 0.40 (Percentage change: 2.56%). As the ratio is less than 1, it implies that Metro has sufficient assets to cover its long-term obligations.
Unlike Isetan, Metro has adopted a strategy of having a mixture of debt financing with equity financing.
The increase in its debt-equity ratio is due to the increase in its long-term liabilities which is being held by its jointly controlled entities in China. Page 88 of Metro, part (c)
The debt-equity ratio has increased from 0.39 to 0.40 (Percentage change: 2.56%). As the ratio is less than 1, it implies that Metro has sufficient assets to cover its long-term obligations.
Unlike Isetan, Metro has adopted a strategy of having a mixture of debt financing with equity financing.
The increase in its debt-equity ratio is due to the increase in its long-term liabilities which is being held by its jointly controlled entities in China. Page 88 of Metro, part (c)