Project GAP vs ANF

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Financial statement analysis of GAP and ANF

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  • Project GAP vs ANF

    1. 1. GAP VS. ANF Financial Statement Analysis Group 1 Angeles Huang Charles Towle Robin Thieu
    2. 2. Outline <ul><li>Industry Overview (a) </li></ul><ul><li>Companies Overview (b) </li></ul><ul><li>Corporate Factsheets (b) </li></ul><ul><li>Accounting Analysis Perspective </li></ul><ul><ul><li>Capital Structure & Solvency (c) </li></ul></ul><ul><ul><li>Short-term Liquidity (b) </li></ul></ul><ul><li>Equity Analysis Perspective </li></ul><ul><ul><li>Asset Utilization (a) </li></ul></ul><ul><ul><li>Return on Invested Capital (c) </li></ul></ul><ul><li>Financial Analysis Perspective </li></ul><ul><ul><li>Profitability (a) </li></ul></ul><ul><ul><li>Valuation (b) </li></ul></ul><ul><li>Conclusion (a) </li></ul>Group 1 Ratios RNOA/ ROCE EPS/ VALUE ANF
    3. 3. Apparel Industry American Eagle Aeropostale J Crew Urban Outlet Nordstrom
    4. 4. <ul><li>GAP Inc. </li></ul><ul><li>ANF Co. </li></ul>Companies Overview 1976 1996 2007
    5. 5. Corporate Factsheets 2007 Fiscal
    6. 6. Common-Size Analysis 2007 Fiscal
    7. 7. Capital Structure - Solvency Accounting Analysis Perspective
    8. 8. Liquidity Accounting Analysis Perspective
    9. 9. Liquidity Accounting Analysis Perspective S&P Short-Term Issuer Credit Rating: BB+
    10. 10. Cash reinvestment ratio Accounting Analysis Perspective
    11. 11. Asset Utilization Equity Analysis Perspective Sales to Cash Eq. 5.49 4.70 3.99 3.43 3.65 Sales to Receivables - - - - -  Sales to inventories 9.35 9.12 9.13 9.25 8.45 Sales to working capital 19.07 11.55 9.72 8.01 7.55 Sales to PPE 4.88 4.94 4.84 4.82 4.44 Sales to total assets 1.92 1.83 1.70 1.60 1.57 Sales to Cash Eq. 6.36 6.69 6.86 4.64 3.70 Sales to Receivables 77.28 77.99 81.92 121.31 193.42 Sales to inventories 9.86 8.40 9.71 10.59 10.85 Sales to working capital 12.56 11.41 12.23 16.96 7.73 Sales to PPE 3.11 3.48 3.71 3.07 3.34 Sales to total assets 1.56 1.64 1.78 1.48 1.44
    12. 12. RNOA Equity Analysis Perspective ANF     2007   RNOA NOPAT $ 457 = 20.3% Avg NOA $ 1,512 Sales   $ 3,750     Profit margin   = 11.87% Asset turnover   = 2.48 RNOA = 20.3% GAP   2007   RNOA NOPAT $ 832 = 11.1% Avg NOA $ 5,075 Sales $ 15,763     Profit margin = 5.14% Asset turnover = 2.25 RNOA = 11.1% GAP vs ANF and Industries' RNOA GAP ANF
    13. 13. ROCE Equity Analysis Perspective
    14. 14. Profitability Financial Analysis Perspective PB ratio 3.30 3.42 3.22 EPS 1.05 0.94 1.26 PE Ratio 17 23 16 PB ratio 3.87 5.29 6.62 EPS 5.51 4.78 3.80 PE Ratio 13 18 20
    15. 15. Valuation Financial Analysis Perspective
    16. 16. Conclusion Conclusion GAP ANF Chosen <ul><ul><li>Current Ratio </li></ul></ul>1.68 2.10 ANF <ul><ul><li>Cash to Current Liabilities </li></ul></ul>79.7% 119.4% ANF <ul><ul><li>Asset turnover </li></ul></ul>  3.11 2.48 ANF <ul><ul><li>Profit margin </li></ul></ul>  5.28% 12.18% ANF <ul><ul><li>RNOA </li></ul></ul>16.39% 30.20% ANF <ul><ul><li>ROCE </li></ul></ul>17.63% 31.47% ANF <ul><ul><li>EPS </li></ul></ul>1.05 5.51 ANF <ul><ul><li>Valuation </li></ul></ul>$ 18.44 $ 116.91 ANF <ul><ul><li>Market price (5/13/2008) </li></ul></ul>$ 18.85 $ 72.65     SELL/HOLD BUY  
    17. 17. Thank you very much !!! Group 1

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