The paper "The Performance of ASICS " is a perfect example of a business case study. This report examines the performance of ASICS a top dealer with sporting apparel. In this regard, selected ratios have been calculated as shown in the attached appendix and then compared with the company’ s top competitors and industry leaders including Nike, Adidas and Puma SE with an aim of understanding the company’ s financial performance as presented in its financial statements. By comparing the company with the industry, the report successfully provides a balanced and transparent overview of the company’ s financial performance.
The report thus provides an informed insight into how the company is performing financially thus which is essential in making informed decisions as to whether to acquire the company. Financial analysis Profitability ratios These are ratios that give us an insight as to how well the company performed as far as generating profit is concerned. In this regard, ASICS’ return on capital employed (ROCE), as well as the net profit margin for the last five years, have been analyzed. Return on Capital Employed This is a ratio that is easy to calculate with the results being given in percentage which makes it easy to compare among different companies.
The ratio is concerned with how much profit is generated for every dollar of the capital employed (Barnes, 2007). The company’ s ROCE initially increased from 12.87% in 2011 to 13.62% in 2012 before declining to 11.33% in 2013 and eventually declining to 7.01% in 2015. This kind of performance is attributed to the prevailing market conditions with a sharp increase in procurement costs in the company’ s key markets being blamed for the sharp decline in the company’ s ROCE in 2015.
It is however worth noting that the industry averages also follow a similar trend although the decline for the industry in 2015 is not as sharp as that of ASICS. However, the general trend is associated with the prevailing market conditions especially increasing procurement costs in key markets (Asics. com, 2017). Net Profit Margin This ratio is an indication of how much profit the company generates for every sales dollar and is given as a percentage.
Barnes, P. (2007) The analysis and use of financial ratios: an article review, Journal of Business Finance & Accounting, vol.4, no. 4, pp. 23-28.
Asics.com (2017) Annual reports 2011-15, [Online]. Available at; http://corp.asics.com/en/investor_relations/library/annual-reports
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