Investment Analysis for OrotonGroup Limited

Table of Contents

1. Introduction 3
2. Business Model and Operating Environment 4 2.1 Business Model 4 2.2 Operating Environment 5
3. Horizontal and Vertical Analysis 6 3.1 Horizontal Analysis on Balance Sheet 6 3.2 Horizontal Analysis on Income Statement 9 3.3 Vertical Analysis on Balance Sheet 11 3.4 Vertical Analysis on Income Statement 13
4. Ratio Analysis 14 4.1 Ratio Analysis for OrotonGroup 14 4.2 Ratio Analysis for Country Road 19 4.3 A Comparison of ORL and CTY 23 4.4 DuPont Analysis 24
5. Valuation 26
6. Other information of OrotonGroup 28 6.1 Continuous disclosure 28 6.2 Corporate governance 28 6.3 Media comments 29
7. Investment Recommendation 30 …show more content…
In more recently, ORL acquired the GAP brand and signed a joint venture agreement with Brooks Brothers, which could result more new GAP and Brooks Brothers stores in the future.

2.2 Operating Environment
Externality can put significant effect on operating of companies. This report will give an analysis on social factors, economic factors and industry factors.

Social factors
Australia is one of the wealthiest countries in the world with a vast territory. It is the world’s 12th-largest economy and the 6th-largest country by total area (“GDP ranking”, 2012). As a developed country, Australia has a high level of education and medical services. People here are healthy and wealthy with a good standard of living. In addition, as a country of immigrants, Australia attracts hundreds and thousands of high skilled immigrants every year. Australia also has a well-established regulatory regime, a very open business environment. The politics here is democratic and the government is honest and efficient. All of these factors make Australia a good social environment for investment.

Economic factors
Australian economy is highly developed and fundamentally healthy. Australia has had a significant economic growth since 1991 and successfully avoided huge impacts from financial crisis in 1998 and 2008. In more recent years, as the quantitative easing policy has come to an end, the economy of Australia has slowed down. The main risk of Australian economy is a