Example Ratio Analysis

Example Ratio Analysis - INVESTMENT DECISION BASED ON...

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INVESTMENT DECISION BASED ON FINANCIAL ANLAYSIS 1. Background Information on Companies at Hand 1.1.1 Nordstrom Incorporation Nordstrom Incorporation is a company engaged in the fashion industry. John W. Nordstrom incorporated the company in 1901 after the acquaintance with Carl William, who opened the business venture together as partners. Their first business comprised mainly a shoe store. Through growth and capital appreciation the management of the company decided to diversify their product range. Indeed in 1963 the firm commenced trading in the clothing market through the acquisition of Best Apparel, a clothing store located in Seattle. The product mix was further enhanced in 1966 through the addition of men’s clothing and children’s wear (Nordstrom). In today’s competitive business environment, the company has adopted a marketing orientation philosophy. The management of the company identified a vast number of business risks as noted in the most recent From 10 Q Sec filing. The salient risks noted are: Capability to respond to business environment and fashion trends, which are constantly moving; Brand and reputation maintenance in the market; Economic impact and competitive market forces; Cost control ability and development and maintenance of effective inventory management systems; and Effectiveness in their multi-channel strategy. 1.2.1 Urban Outfitters Incorporation 1
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INVESTMENT DECISION BASED ON FINANCIAL ANLAYSIS Urban Outfitters Incorporation main operations mainly entail specialty retail stores, which market a vast array of fashion clothing, accessories and home goods. The first store of the business entity was opened in 1970. In 1976 the company, which holds the name of Urban Outfitters was incepted. The firm continued growing in the American market. In 1998, the company growth strategy was further widened with its first international trading strategy by commencing its European store in London, United Kingdom (Form 10-K 2007, p 1). There are three main retail segments that the company targets. The Urban Outfitters encompasses young adults within the age range of 18 to 30. The products demanded by such market consist women’s and men’s fashion clothing, footwear and accessories, together with apartment merchandise. The Anthropologie market comprises mainly women between the 30 and 45 age range, which request casual clothing, home furnishing and decorative products. The latter market segment, which is commonly referred to as Free People, consists of branded goods targeted to women between the age of 25 and 30 (Form 10-K 2007, p 2). Similar to Nordstrom Incorporation, the company is also vulnerable to certain risk factors, such as economic conditions and customer tastes. In fact the company noted one of its key variables being its ability to be proactive in identifying changes in fashion design requested by the target market. The identification of technological advancements to the company advantage is also an important factor. For instance the adoption to
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This note was uploaded on 03/02/2011 for the course BUS 500 taught by Professor Dr.spitz during the Spring '11 term at Deep Springs.

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Example Ratio Analysis - INVESTMENT DECISION BASED ON...

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