FINANCIAL MANAGEMENTBUSINESS INTRODUCTION: Logitech International is registered with symbol LOGN in the SWX Swiss Exchange as a Swiss public company. In the NASDAQ, it trades by the symbol LOGI. It was also added to the NASDAQ-100 Index in January 2007. The company is a world leader in consumer electronics and personal peripherals. It is one of the most innovative companies which is striving hard to provide its consumers an experience of newer technologies and innovative ideas in digital music, PC navigation, home entertainment controls, internet communications, gaming and wireless devices.
Thus the products of the company are being appreciated and liked by the consumers due to their innovations, beautiful designs and value for money. 89 percent of its revenue comes from its retail process. The company initially benefited from the easy accessibility of computers and their popularity among new users who enhanced their basic desktop PC systems with more features that add functionality and provided them with personalized settings. And now the latest trend amongst PC users to utilize their desktops for gaming, listening to music, multimedia or CD/DVD popularity and internet communication using webcams etc.
is proving beneficial to the company. With more and more consumers opting for laptops and palmtops, the demand fr PC peripherals is increasing day by day leading to growth in companies like Logitech. Logitech has come out with specially designed peripherals, such as mice, speakers, webcams, headsets, headphones and notebook stands for laptop users at home or on road or at office. They also provide personal peripherals for other digital items such as gaming consoles, portable music players and mobile phones etc. They have fully utilized the newer technologies such as wireless to offer a range of wireless devices such as mouse, keyboards, presentation devices, headphones, gaming controllers and streaming music systems Moreover, easy accessibility to high speed internet connections have led to increased use of voice and video communications, video sharing on web sites, Web-based music and radio etc.
and thus there is an increased demand for products that help in these such as multimedia keyboards, webcams, voice-access headsets, speakers, and streaming media systems. Its product lines also include advanced universal remote controls to help consumers with operating their home-entertainment systems easily which are at the moment becoming more and more popular with flat-panel TVs, digital-video recorders, digital audio systems, PC-based media systems and game consoles etc On the financial front, Logitech International is enjoying a very successful and profitable run in the market.
As per its report for the second quarter of Fiscal Year 2008 the sales are going up and were $595 million. This was an increase of 19 percent from the sales figures in the same quarter last year. Operating income is $80.4 million, which is again an increase of about 54 percent from last year.
Gross margin is at the all time high for the company at 36.3 percent as compared to 34.5 percent in Q2 of Fiscal year 2007. Similar improvements are seen in cash flow from operations which is at $103 million as compared to $80 million in the last year. In retail as well, the company posted record sales growth of 16 percent. There has been a strong demand for Harmony remote controls, audio products, and keyboards and desktops and this has resulted in such a good figures for the second quarter.