Harvey Norman - Financial Ratios and Investment Viability of the Two Investment Options - Example

Executive summary Harvey Norman is a large Australian retailer dealing with electrical, furniture, computer, bedding goods and entertainment products. The company is a franchise of Harvey Norman Holdings Limited and has numerous stores in Australia, New Zealand, Slovenia, and Ireland among other nations. It also owns several other retail chains in Australia including Space Furniture, Ariston and Domayne. On the other hand, Jb Hi-Fi is a retailer of consumer electronics as well as supplying video games and blue rays, CDs and DVDs in Australia. The company has its headquarters in Melbourne and is a chain store. As such, both the companies operate in the electronics industry and are hence competitors. In this regard, this report presents a performance analysis of the two companies using financial analysis for the two companies for the years 2013 and 2014. In this regard, financial ratio analysis has been used. Jb Hi-Fi Company limited has been found to perform better on three of the five measures of financial analysis including profitability, asset efficiency and market ratios than its competitor Harvey Norman Limited. On the other hand, Harvey Norman has been found to perform better than Jb Hi-Fi in two of the five measures including liquidity and capital structure ratios. As such, it is hoped that this report will be of great help to investors in choosing which of the two competitors to invest in. The report however concludes by recommending Jb Hi-Fi limited as the better investment option. The report starts with an analysis of the financial ratios before giving its recommendations and conclusion on the investment viability of the two investment options. The appendix of the report presents the calculations for the various ratios analyzed. However, it is worth noting that although many ratios have been calculated, only to ratios for each of the five measures of financial performance have been analyzed. Table of Contents Executive summary 1 Table of Contents 2 Introduction 3 Profitability analysis 3 Harvey Norma Limited 4 Asset efficiency ratios 5 Liquidity ratios 6 Capital structure ratios 8 Market ratios 9 Conclusion 10 References: 12 Appendix 13 Introduction In making investment decisions, investors use both qualitative and quantitative measures in analyzing the performance of their investment targets in a bid to make informed investment decisions. One of the quantitative measures used in analyzing performance is the financial ratios analysis. In this regard, a number of measures are analyzed. The measures include profitability which tells the users how effective the company has been in generating profits. Asset efficiency ratios reveal to the users whether the company has been efficiently using assets to generate returns for the shareholders. Liquidity and capital structure ratios on the other hand reveal the extent to which the company uses both long-term and short term debt in financing all its asset classes. Finally the market ratios measure the actual returns that the company has generated for its shareholders. By analyzing these measures, both investors and management can be able to know whether the company is performing well financially and hence whether it would be a good investment vehicle. In this regard, this report has used financial ratio analysis to analyze the performance of JB HI-FI limited and Harvey Norman limited in comparing their performances in the years 2013 and 2014. This way, the report provides information that is useful to both management and investors in making management and investment decisions respectively. Jb Hi-Fi Limited and Harvey Norman Financial Ratios analysis Profitability analysis Though a number of profitability measures have been calculated as shown in the appendix, the two most important measures of profitability for a firm are the firm’s return on assets and return on equity. Return on assets Jb Hi-Fi Limited The company’s return on assets increased significantly from 20.32% in 2013 to 21.45% in 2014. This implies that Jb Hi-Fi Limited utilized their assets efficiently on fewer investments to generate a substantial level of earnings for the level of assets held. This ability to efficiently use assets to generate returns /income therefore increased in 2014 in comparison to 2013. The increase is mainly attributed to the company’s significant increase in revenue levels in 2014 to $182,677,000 from $168,052,000 that offset the effect of increase in assets to result in higher return on assets in 2014. Harvey Norma Limited The company’s return on assets increased from 7.07% in 2013 to 8.21% in 2014. The increase in returns resulted from the significant increase in the company’s EBIT from $283,435,000 in 2013 to $340,491,000 in 2014 thus offsetting the increase in assets to result in higher return on assets in 2014. However, despite the increase, the level of returns is an implication that the company is not as efficient in utilizing its assets to generate income as its competitor Jb Hi-Fi limited is. Return on Equity Jb Hi-Fi Limited The company’s return on equity significantly declined from 54.34% in 2013 to 47.68% in 2014. The decline is attributed to the significant increase in the company’s level of average equity from $214,164,500 in 2013 to $269,230,500 in 2014. The increase was significant that it offset the increase in net profit in 2014 to result in lower returns on equity. However, despite the decline, the level of ROE still indicates that the company’s efficiently managed the company’s equity base to result in good returns to the investors. However, the efficiency and hence the returns is lower in 2014. Harvey Norman Limited The company’s return on equity increased from 6.24% in 2013 to 8.74% in 2014. The increase resulted from the significant increase in the company’s net profit from $144,477,000 in 2013 to $212,238,000 in 2014 thus offsetting the increase in equity to result in higher return on equity. This implies increasing efficiency for the company in 2014. However, despite the increased ROE, the level is still very low compared to that of the company’s competitor Jb Hi-Fi limited Conclusion on profitability Arising from the profitability analysis above, it is clear that Jb Hi-Fi limited is more profitable than its competitor Harvey Norman Limited owing to its higher levels of returns. On considering profitability alone therefore, I would invest in Jb Hi-Fi limited as opposed to Jb Hi-Fi limited since I would get greater returns. Asset efficiency ratios The ratios examine the relationship between the level of assets and sales or turnover. Times inventory turnover and days inventory Jb Hi-Fi Limited Times inventory turnover measures the number of times inventory is sold and hence restocked. The company’s times inventory turnover increased from 5.87 in 2013 to 6.39 in 2014. This translated to 62.18 days in 2013 which declined to 57.12 days in 2014. This shows an increased efficiency and hence performance which resulted from declining amount of inventory held by the company from $442,312,500 in 2013 to $427,146,000 in 2014 which was significant to offset the increase in cost of sales thus resulting in improved inventory turnover measures in 2014. Harvey Norman The company’s time’s inventory turnover slightly increased from 3.55 times in 2013 to 3.76 times in 2014. This translated to 102.82 inventory days in 2013 which declined to 97.04 inventory days in 2014. The slight improvement resulted from the relative decline in the cost of goods sold in 2014. However, the company’s inventory turnover measures are much higher compared to those of the company’s competitor Jb Hi-Fi Limited. Times debtors turnover This measures the number of times the company converts its debtors into cash. Jb Hi-Fi Limited The company’s time’s debtor’s turnover slightly declined from 53.96 days in 2013 to 51.62 days in 2014. The decline resulted from a significant increase in the company’s average debtors in 2014 to $67,495,500 from $61,312,000. This translated to 6.76 days in 2013 and 7.07 days in 2014. The increase thus offset the increase in the company’s sales revenue to result in lower times debtors’ turnover. Despite the decline however, the debtor’s turnover measures show that the company is efficient in collecting its debts though this efficiency declined in 2014. Harvey Norman Limited The company’s times debtors slightly improved from 2.27 days in 2013 to 2.33 in 2014. This translated to 160.79 in 2013 days which slightly declined to 156.65 days in 2014. This decline resulted from a slight increase in the company’s debtors in 2014. However, it should be noted that the company’s measures of debtors turnover are very poor compared to those of its competitor Jb Hi-Fi Limited. This is attributed to the high level of debtors that the company has over the two years period. Conclusion on asset efficiency ratios Arising from the asset efficiency analysis above, it is clear that Jb Hi-Fi limited is more efficient than its competitor Harvey Norman Limited owing to the fewer number of days in both cases. On considering asset efficiency alone therefore, I would invest in Jb Hi-Fi limited as opposed to Jb Hi-Fi limited since it is more efficient in managing its assets. Liquidity ratios These measure the company’s ability to meet its short term liability obligations. Current ratio Jb Hi-Fi Limited The company’s current ratio improved from 1.27 in 2013 to 1.64 in 2014. The improvement mainly resulted from a significant decline in current liabilities in 2014. This is an indication that the company has effectively managed its current assets and current liabilities. Harvey Norman Limited The company’s current ratio declined from 1.84 in 2013 to 1.27 in 2014. The decline is attributed to a significant increase in current liabilities in 2014. However, despite the decline, the results show that the company has effectively managed its current liabilities. Quick ratio Jb Hi-Fi Limited The company’s quick ratio improved from 0.31 in 2013 to 0.43 in 2014. The improvement is attributed to the decline in the company’s current liabilities to $352,193,000 in 2013 from $442,379,000 in 2013. However, this position is not god for the company since it shows that the bulk of the company’s current assets in terms of inventories which might expose the company to liquidity risk. Harvey Norman Limited The company’s quick ratio declined from 1.51 in 2013 to 1.04 in 2014 owing to the increase in current liabilities from $834,057,000 in 2013 to $1,262,232,000 in 2014. However, despite the decline in current ratio, the company’s current liabilities remain well managed. Conclusion on liquidity ratios Based on the above analysis, Harvey Norman Limited is better managed in terms of both current and quick ratio. Based on liquidity ratios alone therefore, I would prefer to invest in Harvey Norman since it faces less liquidity risk. Capital structure ratios The ratios show how the company uses debt in financing its assets. Debt ratio Jb Hi-Fi Limited The company’s debt ratio declined from 0.71 in 22013 to 0.66 in 2014. The decline results from decline in the company’s liabilities from 4599, 476,000in 2013 to 4565,208,000 in 2014. This is an improvement since it denotes a reduction in what the company owes others/ reduced use of debt. Harvey Norman Limited The company’s debt ratio slightly declined from 0.42 in 2013 to 0.41 in 2014. The slight decline is attributed to the increase in the company’s total assets from $4,065,031,000 in 2013 to $4,225,336,000 in 2014. However, this level of debt is more preferable since it means that the bulk of the company’s assets are financed through equity thus reducing the risk of takeover/liquidation. Debt equity ratio Jb Hi-Fi Limited The company’s debt equity ratio declined from 246% in 2013 to 192% in 2014. This decline is attributed to the reduced use of debt by the company and a corresponding increase in the company’s equity from $243,828,000 in 2013 to $294,633,000 in 2014. However, this ratio is still high since the company’s debt is almost double its equity which exposes the company to gearing risks. Harvey Norman Limited The company’s debt equity ratio slightly declined from 0.72 in 2013 to 0.70 in 2014. The decline is attributed to the increase in the company’s equity from $2,363,855,000 in 2013 to $2,491,106,000 in 2014. The level is desirable as it shows that the company’s assets are largely financed through equity thus alleviating gearing risks. Conclusion on capital structure ratios Arising from the above analysis, it is clear that Harvey Norman Limited is better geared than its competitor Jb Hi-Fi Limited owing to the lower level of debt. As such, I would invest in Harvey Norman limited if only the company’s gearings were being considered. This is because the company faces fewer risks associated with accumulating debts. Market ratios The ratios show the company’s performance in the market. Earnings per share Jb Hi-Fi Limited The company’s earnings per share increased from 117.02 cents per share in 2013 to 126.89 cents per share in 2014. This resulted from increased net profit available to ordinary shareholders as well as the decline in the weighted number of ordinary shares on issue for the company over the two years. This is a relatively good return to shareholders for their investment. Harvey Norman Limited The company’s EPS increased significantly from 13.38 in 2013 cents per share to 19.91 cents in 2014. The increase is attributed to the increase in the company’s net earnings from $144,477,000 in 2013 to $212,238,000. However, the EPS level is very low compared to that of the company’s competitor Jb Hi-Fi Limited. Dividend per share Jb Hi-Fi Limited The company’s DPS increased slightly from 83.905 cents in 2013 to 84 cents in 2014. The increase is attributed to the increase in the amount of dividend paid as well as the decline in the weighted number of ordinary shares on issue in 2014 as stated above. However, this DPS per share is desirable for shareholders as it is relatively high given the EPS above. Harvey Norman Limited The company’s DPS significantly increased from 9 cents per share in 2013 to 14 cents per share in 2014. The increase is attributed to the increase in the amount of dividends paid to shareholders. Despite the increase however, the DPS is very low compared to what has been paid by the company’s competitor Jb Hi-Fi Limited. Conclusion on market ratios Arising from the above analysis, it is clear that Jb Hi-Fi Limited gives better returns to the shareholders than its competitor Harvey Norman limited. As such, as an investor, I would invest in Jb Hi-Fi Limited were market ratios only to be considered. Conclusion The analysis of financial performance of a company is very important in guiding investors into choosing their investment vehicles wisely. One of the methods used in analyzing financial performance of companies is the financial ratio analysis. This report has thus presented the financial ratios analysis of Jb Hi-Fi limited and Harvey Norman Limited who are competitors in the same industry with an aim of gauging which of the companies perform better and hence a better investment option. Arising from the analysis, it has emerged that Jb Hi-Fi limited is the better investment option based on financial ratios analysis. This is because it has been noted to have better financial performance than its competitor Harvey Norman. The company has performed better in three of the five measures being investigated while Harvey Norman only performed better in two of the measures. Jb Hi-Fi had far much better profitability, asset efficiency and returns to shareholders than Harvey Norman. On the other hand, Harvey Norman was found to have better liquidity and better geared than its competitor. As such, the report recommends investing in Jb Hi-Fi limited as opposed to Harvey Norman based on the measures being investigated alone. However, other factors ought to also be investigated before a final investing conclusion can be reached at. It is therefore hoped that the report will be useful to investors wanting to make investing decisions on the two companies. References: JB HI-FI, 2014, 2014 annual report, retrieved on 27th May 2015, from; http://jbh.onlineannualreports.com.au/?iid=101728#folio=1 Harvey Norman, 2014, 2014 annual report, Retrieved on 27th May 2015, from; http://www.harveynormanholdings.com.au/pdf_files/2014-Annual-Report_021014.pdf Jared, B2014, Advanced Financial accounting, London, Rutledge. Appendix Jb Hi-Fi Limited Consolidated income statement Statement of profit or loss 2013 2014 $'000 $'000 Statement of profit or loss Revenue 3,308,515,000 3,483,893,000 Cost of sales -2,596,194,000 -2,727,794,000 Gross profit 712,321,000 756,099,000 Less SG& A -534,568,000 -564,979,000 EBIT 177,753,000 191,120,000 Interest revenue 455,000 402,000 Interest expense -10,156,000 -8,845,000 Net interest expense -9,701,000 -8,443,000 EBT 168,052,000 182,677,000 Income tax expense -51,420,000 -54,230,000 Profit for the year 116,632,000 128,447,000 Outside Equity Interests -249,000 -88,000 Net profit attributable to shareholders 116,383,000 128,359,000 Shares Outstanding at Period End 98,947,309 98,947,309 Weighted Average Number of Shares 98,884,000.00 99,975,000.00 EPS Adjusted (cents/share) 117.02 126.89 EPS After Abnormal (cents/share) 117.02 126.89 Jb Hi-Fi Limited Consolidated income statement Statement of profit or loss Common size analysis 2013 2014 $'000 $'000 Statement of profit or loss Revenue 100% 100% Cost of sales -78% -78% Gross profit 22% 22% Less SG& A -16% -16% EBIT 5% 5% Interest revenue 0% 0% Interest expense 0% 0% Net interest expense 0% 0% EBT 5% 5% Income tax expense -2% -2% Profit for the year 4% 4% Net profit attributable to shareholders 4% 4% Jb Hi-Fi Limited Consolidated Balance Sheet Data 2014 2013 2012 $'000 $'000 $'000 Current Assets 578,147,000 563,652,000 534,060,000 accounts receivable 70,745,000 64,246,000 58,378,000 inventory 428,290,000 426,000,000 458,625,000 Current liabilities 352,193,000 442,379,000 439,481,000 CFO 41,326,000 156,410,000 215,007,000.00 TA 859,841,000 843,304,000 811,149,000 Intangible Assets 49,024,000 49,024,000 49,024,000 Equity 294,633,000 243,828,000 184,501,000 Total Liabilities 565,208,000 599,476,000 626,648,000 NCL 213,015,000 157,097,000 187,167,000 Harvey Norman Consolidated income statement Statement of profit or loss 2013 2014 $'000 $'000 Statement of profit or loss Revenue 2,347,360,000 2,538,412,000 Cost of sales -944,229,000 -1,064,892,000 Gross profit 1,403,131,000 1,473,520,000 Less SG& A -1,119,696,000 -1,133,029,000 EBIT 283,435,000 340,491,000 Interest revenue 11,672,000 8,874,000 Interest expense -45,774,000 -36,437,000 Net interest expense -34,102,000 -27,563,000 EBT 249,333,000 312,928,000 Income tax expense -43,469,000 -88,823,000 Profit for the year 205,864,000 224,105,000 Abnormals -61,387,000 -11,867,000 Net profit attributable to shareholders 144,477,000 212,238,000 Harvey Norman Consolidated income statement Statement of profit or loss 2013 2014 $'000 $'000 Statement of profit or loss Revenue 100% 100% Cost of sales -40% -42% Gross profit 60% 58% Less SG& A -48% -45% EBIT 12% 13% Interest revenue 0% 0% Interest expense -2% -1% Net interest expense -1% -1% EBT 11% 12% Income tax expense -2% -3% Profit for the year 9% 9% Abnormal -3% 0% Net profit attributable to shareholders 6% 8% Harvey Consolidated Balance Sheet Data 2014 2013 2012 $'000 $'000 $'000 Current Assets 1,607,167,000 1,531,913,000 1,498,941,000 accounts receivable 1,119,393,000 1,054,402,000 1,017,973,000 inventory 297,670,000 268,781,000 263,421,000 Current liabilities 1,262,232,000 834,057,000 917,770,000 CFO 338,935,000 239,217,000 200,945,000.00 TA 4,225,336,000 4,065,031,000 3,951,816,000 Intangible Assets 77,888,000 58,903,000 57,432,000 Equity 2,491,106,000 2,363,855,000 2,266,882,000 Total Liabilities 1,734,230,000 1,701,176,000 1,684,934,000 NCL 471,998,000 867,119,000 767,164,000 Profitability analysis a) Return on Equity (ROE) = (Net profit/Average equity) 100 Jb Hi-Fi Limited 2013 = (116,383,000/ (243,828,000+184,501,000)/2)100 =54.34% 2014 = (128,447,000/ (243,828,000 +294,633,000)/2)100 = 47.68% Harvey Norman 2013 = (144,477,000/ (2,363,855,000+2,266,882,000)/2)100 =6.24% 2014 = (212,238,000/(2,491,106,000 +2,363,855,000)/2)100 =8.74% b) Return on Assets (ROA) = (EBIT/Average total assets) 100 Jb Hi-Fi Limited 2013= (168,052,000/ (843,304,000+811,149,000)/2)100 =20.32% 2014 = (182,677,000/ (859,841,000+843,304,000)/2)100 = 21.45% Harvey Norman 2013 = (283,435,000/ (4,065,031,000 + 3,951,816,000)/2)100 =7.07% 2014 = (340,491,000/( 4,225,336,000+ 4,065,031,000)/2)100 =8.21% c) Gross profit margin = (Gross profit/Sales Revenue) 100 Jb Hi-Fi Limited 2013 = (712,321,000/3,308,515,000)100 =21.53% 2014 = (756,099,000/3,483,893,000)100= 21.70% Harvey Norman 2013 = (1,403,131,000/2,347,360,000)100 =59.77% 2014 = (1,473,520,000/2,538,412,000)100 = 58.05% d) EBIT Margin = (EBIT/ (Sales revenue)) 100 Jb Hi-Fi Limited 2013 = (177,753,000/3,308,515,000)100 = 5.37% 2014 = (182,677,000/3,483,893,000)100 =5.24% Harvey Norman 2013 =283,435,000/2,347,360,000 =12.07% 2014 =340,491,000/2,538,412,000= 13.41% Asset efficiency ratios a) Asset turnover ratio = Sales Revenue /Average total assets Jb Hi-Fi Limited 2013= (3,308,515,000/ (843,304,000+811,149,000)/2)100= 4.0 2014 = (3,483,893,000/ (859,841,000+843,304,000)/2)100 = 4.09 Harvey Norman 2013 = (2,347,360,000/ (4,065,031,000 + 3,951,816,000)/2)100 =0.59 2014 = (2,538,412,000/ (4,225,336,000+ 4,065,031,000)/2)100 = 0.61 b) Times inventory turnover =Cost of goods sold/Average inventory Jb Hi-Fi Limited 2013 = (2,596,194,000/ (426,000,000 +458,625,000)/2)) 100 =5.87 2014 = (2,727,794,000/ (428,290,000 +426,000,000)/2)100 = 6.39 Harvey Norman 2013 = (944,229,000/ (1,054,402,000 +1,017,973,000)/2)100 = 3.55 2014 = (1,064,892,000/ (297,670,000+268,781,000)/2)100 = 3.76 c) Days inventory = 365/Inventory turnover in times Jb Hi-Fi Limited 2013 = 365/5.87 =62.18 days 2014 =365/6.39 =57.12 days Harvey Norman 2013 =365/3.55 =102.82 days 2014 =365/3.76 =97.04 days d) Times debtors turnover =Sales revenue/Average trade debtors Jb Hi-Fi Limited 2013 = (3,308,515,000/ (64,246,000 +58,378,000)/2)100 = 53.96 2014 = (3,483,893,000/ (70,745,000+64,246,000)/2)100 =51.62 Harvey Norman 2013 = (2,347,360,000/(1,054,402,000 +1,017,973,000)/2)100 =2.27 2014 = (2,538,412,000/ (1,119,393,000 +1,054,402,000) /2)100 2.33 e) Days Debtors =365/ Debtors turnover in times Jb Hi-Fi Limited 2013 =365/53.96 =6.76 days 2014 = 365/51.62 = 7.07 days Harvey Norman 2013=365/2.27 =160.79 days 2014= 365/2.33 =156.65 days Liquidity ratios a) Current ratio =Current Assets/ Current liabilities Jb Hi-Fi Limited 2013 =563,652,000/442,379,000 =1.27 2014 =578,147,000/352,193,000 =1.64 Harvey Norman 2013 =1,531,913,000/834,057,000 =1.84 2014 =1,607,167,000/1,262,232,000 =1.27 b) Quick asset ratio = Current assets less inventory/ Current liabilities Jb Hi-Fi Limited 2013= (563,652,000-426,000,000)/ 442,379,000 = 0.31 2014= (578,147,000-428,290,000)/ 352,193,000 = 0.43 Harvey Norman 2013= (1,531,913,000-268,781,000)/ 442,379,000 =1.51 2014 = (1,607,167,000-297,670,000)/ 352,193,000 =1.04 c) Cash flow ratio = Cash flows from operating activities/ Current liabilities Jb Hi-Fi Limited 2013 = 156,410,000/442,379,000 = 0.35 2014 =41,326,000/352,193,000 =0.12 Harvey Norman 2013 =239,217,000/834,057,000 =0.29 2014 =338,935,000/1,262,232,000 =0.27 Capital structure ratios a) Debt to equity ratio = (Total liabilities/ Total equity) 100 Jb Hi-Fi Limited 2013 = (599,476,000/243,828,000)100 = 2.46 2014 = (565,208,000/294,633,000)100 =1.92 Harvey Norman 2013 = (1,701,176,000/2,363,855,000)100 =0.72 2014 = (1,734,230,000/2,491,106,000)100 =0.70 b) Debt ratio = (Total liabilities/total assets) 100 Jb Hi-Fi Limited 2013 = (599,476,000/843,304,000)100 =0.71 2014 = (565,208,000/859,841,000)100= 0.66 Harvey Norman 2013 = (1,701,176,000/4,065,031,000)100=0.42 2014 = (1,734,230,000/4,225,336,000)100 =0.41 c) Equity ratio = (Total equity/Total assets) 100 Jb Hi-Fi Limited 2013= (243,828,000/843,304,000)100 =0.29 2014 = (294,633,000/859,841,000)100 =0.34 Harvey Norman 2013 = (2,363,855,000/4,065,031,000)100 =0.58 2014 = (2,491,106,000/4,225,336,000)100 =0.59 d) Interest coverage ratio = EBIT/Interest expense Jb Hi-Fi Limited 2013 =177,753,000/9,701,000 =18.32 times 2014 =191,120,000/8,443,000= 22.64 times Harvey Norman 2013 =283,435,000/34,102,000 =8.31 times 2014 =340,491,000/27,563,000 =12.35 times e) Debt service coverage ratio = Non-Current liabilities/Net cash flows from operating activities Jb Hi-Fi Limited 2013 =157,097,000/156,410,000= 1.00 times 2014 =213,015,000/41,326,000 = 5.15 times Harvey Norman 2013 =867,119,000/239,217,000= 3.62 times 2014 =471,998,000/338,935,000 =1.36 times Market ratio a) Net tangible assets per share (Equity- Intangible assets/Number of ordinary shares on issue at year end) Jb Hi-Fi Limited 2013 = (243,828,000-77,888,000)/ 99,975,000.00 = 1.95 per share 2014 = (294,633,000-49,024,000)/ 98,884,000.00 =2.48 per share Harvey Norman 2013 = (2,363,855,000-58,903,000)/ 1,062,316,784.00 =2.17 per share 2014 = (2,491,106,000 -77,888,000)/ 1,062,316,784.00= 2.27 per share b) Earnings per share = Net profit available to ordinary shareholders/Weighted number of ordinary shares on issue Jb Hi-Fi Limited 2013= 116,383,000/99,975,000.00 =117.02 2014 = 128,359,000/98,884,000.00 = 126.89 Harvey Norman 2013 = 144,477,000/1,062,316,784.00 = 13.38 cents per share 2014 =212,238,000/1,062,316,784.00 = 19.91 cents per share c) Operating cash flow per share = Cash flows from operations less preference dividend/Weighted number of ordinary shares on issue Jb Hi-Fi Limited 2013 =156,410,000/99,975,000.00 = 1.56 per share 2014 = 41,326,000/98,884,000.00 =0.42 per share Harvey Norman 2013 = 239,217,000/1,062,316,784.00 =0.23 per share 2014 = 338,935,000/1,062,316,784.00 =0.32 per share d) Dividend per share = Dividend paid /Weighted number of ordinary shares on issue Jb Hi-Fi Limited 2014 = 84 cents per share 2013 =83.905 cents per share Harvey Norman 2013 = 9 Cents per share 2014 =14 cents per share Read More