Analysis of JB Hi-Fi Limited’s Financial Performance

Financial statements provide useful information that guides investors to make beneficial investment decisions. For instance, such information provides a basis for comparing prospective investments thus essential in determining the investment that would provide a better return. Additionally, investors can predict the future prospects of an entity by assessing past performance, through the information presented in historical financial statements, thus aiding in their investment decisions. Financial statements thus convey information through which investors can assess the financial performance of the firm to make informed investing decisions (Dimitropoulos and Asteriou 249). This report assesses the performance of JB Hi-Fi Limited (henceforth JB Hi-Fi), to recommend whether it would be prudent for BCity Sports Club to invest in the entity.

The report is organized into seven parts. Following the introduction on the usefulness of financial statements’ analysis to investors, the report presents a background on JB Hi-Fi by highlighting its business operations. Subsequently, the report discusses the changes in financial performance presented in the statement by the Chairman and Chief Executive Officer in the 2010 annual report. Fourthly, the report discusses the environmental and social statements presented in the 2010 annual report to elucidate environmental and social aspects that affect the performance of the company. These assessments form the basis for ratio analysis, the fifth part, that quantifies the return that investors in JB Hi-Fi would expect, based on reported performance. After the ratio analysis, the report presents an overall assessment of the entity’s performance and makes a conclusion with recommendations on whether Bcity Sports club should invest in JB Hi-Fi.

Proceed to part 2 here.


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