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A comparison of the financial performance between two onlinefashion retailers during and after the 2008/2009 recession.

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Introduction

A comparison of the financial performance between two online retailers during and after the 2008/2009 recession. Student number: 11070375 Tutor: Susan Craig Course: Fashion Business Date: 01-12-2011 Words: Content page Introduction Development during the recession of 2008/2009 Financial ratio's Analysis of financial data using ratio's Growth Performance Liquidity and efficiency Lending Conclusion Reference list Appendices Introduction This term paper shall include a comparison of the key performance ratios of ASOS.com and Net-a-Porter.com over the past 5 years to 2011 through calculation and analysis of relevant financial information using FAME data to assess how these companies have been performing during and after the recession. Development during the recession of 2008/2009 The recession showed a downturn of consumer spending on clothes and footwear in the UK (United Kingdom). Yearly made family spending reports by ONS (Office of National Statistics) shows that the average weekly expenditure of all households on clothes and footwear in the UK have been dropping down since 2007 (figure 1). Despite of the global recession, online fashion in the UK was still growing in both sales and market share (Datamonitor, 2010). ...read more.

Middle

Efficiency ratios are used to assess the extent to which asset an liability items are well managed and well utilised. And investment and lending ratios tells how a company is financed. This can be down by loans or/and investors (Gowthorpe, 2005). To evaluate how Asos.com and Net-a-porter have been performing during and after the recession, performance, liquidity, efficiency and lending ratios are been used. Analysis of financial data using ratio's Growth Performance Liquidity and efficiency Lending and performance Conclusion Examination of the turnover and profitability of ASOS Porter and Net-a-suggests that the recession had a minimal effect. ASOS continued to grow aggressively during this period, with significant increases in turnover. ASOS had also an impressive return on capital employment, averaging around 60% over the four years, which would measure shareholders that their capital was being productive. Longer stock turnover implying greater number of sales lines and lower cost of sales. The low debtor turnover ratio illustrates that customers online directly have to pay for the products. ASOS profit per employee was generally over .. that of Net-a-Porter. Illustrating The gearing ratio of ASOS is low which should provide stability for the enterprise and an ability to plan growth for the future. ...read more.

Conclusion

777 x 365 = 1,77 165.395 1.982 x 365 = 8,87 81.546 2010 831 x 365 = 1,71 222.999 3.882 x 365 = 10,84 152.511 2011 884 x 365 = 0,95 339.675 3.503 x 365 = 5.37 238.072 Creditor turnover in days Asos.com Net-a-Porter.com 2007 4.802 x 364 = 41,13 42.614 2.555 x 365 = 25,07 37.196 2008 8.201 x 365 = 36,94 81.044 4.171 x 365 = 27,60 55.158 2009 19.373 x 365 = 42,75 165.395 4.154 x 365 = 18,59 81.546 2010 17.850 x 365 = 29,22 222.999 8.052 x 365 = 22,48 152.511 2011 23.407 x 365 = 25,15 339.675 35.464 x 365 = 54,37 238.072 Gearing Asos.com Net-a-Porter.com 2007 No long term liabilities 32 = 0,35% 9.177 2008 680 = 6.09% 11.161 803 = 6,83% 11.763 2009 No long term liabilities 185 = 0,89% 20.837 2010 No long term liabilities No long term liabilities 2011 No long term liabilities 288 = 0,41% 70.757 Interest cover Asos.com Net-a-Porter.com 2007 No interest 2.128 = 193,45 11 2008 No interest 3.134 = 25,07 125 2009 No interest 10.164 = 101,64 100 2010 No interest 23.751 = 109,96 216 2011 16.607 = 77,24 215 5.761 = 288,05 20 ?? ?? ?? ?? 11 ...read more.

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