Burberry Essay Example | Topics and Well Written Essays - 1250 words

Burberry - Essay Example It also has a prominent base of goods made of leather and beauty products in the world. Burberry has a well diversified business model through which it sells apparel, accessories. It has well spread network of Retail, wholesale and licensing and it operates mainly in Asia Pacific, USA and European region but also has stores in rest of the world. In case of product diversification it has a rich source of women, men and children’s apparel and accessories and beauty products. The group operates into different functional areas like designing and marketing of its apparel, store architecture, supply chain management, IT, HR, Corporate affairs and strategy and finance section. For the financial year 2012-2013 its retail sales have earned 71% of total revenue and wholesale has earned 24%. Burberry has made a transition in its make-up and fragrance business by transferring it into direct operating structure. Burberry.com an online store of the group delivers it services to more than 10 0 countries in the world and further expansion of 84 more retail stores. Burberry is the most preferred luxury brand with more than 15 million fans on Facebook. It is also expanding its business in Middle East countries and has been listed as Top 100 Global Brands for consecutive four years by Interbrand (Burberry, 2013, pp. 17-26). Question 2. According to the auditor’s report of Burberry PLC, it was prepared by following the rules of IFRSs as adopted by EU. The report includes opinions which were prepared for the members of the company as per Companies act 2006. Auditors have analyzed all financial and non financial information of the company to identify whether it has any material misstatements with audited financial statements. Auditor’s report has given some opinion about the group’s financial statement that it has got a true view of the group’s profit and cash flows for the financial year 2013 and it was prepared as per the requirements of Companies Act 2006. Auditor’s report also has some matters like it has identified that director’s remuneration in some cases was not abide by law and auditors didn’t receive all the information they required for audit. Auditors need to review the director’s statement and the corporate governance statement which relates to the company’s agreement with nine provisions in UK. Auditor’s report has some advantages related to financial information like it provides the true view of the company’s financial statements. It also identifies the material misstatements or frauds in the financial statements prepared by the company. It also indicates the areas on which the company can improve it and evaluates the strength and weaknesses of the company. It analyzes the firm’s financial data and helps the investors by giving them the clear picture about the financial position of the company. Question 3. Profitability 2013 2012 % change ROE 0.24 0.30 -0.1 8 Gross Profit Margin 0.72 0.70 0.03 Net Profit Margin 0.13 0.14 -0.10 Profitability Ratio:- Profitability Ratio can be defined as financial a tool which is used to justify a company’s ability to generate revenue which is compared to the business’s expenses and other operational costs which are incurred during a specific time period and are compared to the same ratio of previous period. If the ratios are higher then it indicates that the company is doing well (Thukaram, 2007, p.99). From the above table we can see that Return on Equity for