Introduction
Financial ratios are powerful tools that can provide valuable insight into a company's financial health and performance. For investors and analysts, these ratios are crucial in assessing the overall strength of a company, identifying trends, and making informed decisions. In this article, we will delve into the financial ratios of Burberry Group, a renowned British luxury fashion house, to analyze its financial performance over the past decade.
Burberry Group Ratios and Metrics
Burberry Group (BRBY) is a globally recognized brand known for its iconic trench coats, fashion accessories, and luxury clothing. As a publicly-traded company, Burberry's financial performance is closely scrutinized by investors and analysts. By examining key financial ratios and metrics, we can gain a deeper understanding of Burberry Group's financial health and operational efficiency.
Burberry (BRBY) Financial Ratios
Financial ratios provide a snapshot of a company's financial condition and performance by comparing various financial metrics. Let's take a look at some key financial ratios for Burberry Group:
1. Current Ratio: The current ratio measures a company's ability to cover its short-term liabilities with its current assets. A higher current ratio indicates a stronger liquidity position. Burberry Group's current ratio in 2013 was 1.5, suggesting that the company had sufficient current assets to meet its short-term obligations.
2. Profit Margin: The profit margin reflects the percentage of revenue that translates into profits. A higher profit margin indicates better profitability. Burberry Group's profit margin for 2012 was 10%, indicating that the company was able to generate profits efficiently from its sales.
3. Return on Equity (ROE): ROE measures a company's profitability relative to its shareholders' equity. A higher ROE suggests that the company is generating more profits with less equity investment. Burberry Group's ROE in 2011 was 20%, indicating that the company was able to generate a healthy return for its shareholders.
Burberry Group Financial Ratios for Analysis
Analyzing Burberry Group's financial ratios over the past decade can provide valuable insights into the company's financial performance trends. Let's review some key financial ratios for Burberry Group from 2010 to 2020:
1. Revenue Growth: Burberry Group's revenue grew steadily from $2.3 billion in 2010 to $3.5 billion in 2020, indicating a positive revenue growth trend over the decade.
2. Gross Margin: Burberry Group's gross margin remained relatively stable, ranging from 60% to 65% over the past decade. This indicates that the company was able to maintain healthy margins on its products.
3. Debt-to-Equity Ratio: Burberry Group's debt-to-equity ratio fluctuated over the years, but generally remained below 1. This suggests that the company had a conservative capital structure with lower debt levels relative to equity.
Burberry Group Statistics
In addition to financial ratios, it is important to consider other key statistics and metrics when analyzing Burberry Group's financial performance. Some important statistics to consider include:
1. Earnings Per Share (EPS): Burberry Group's EPS increased from $1.50 in 2010 to $2.50 in 2020, indicating growth in earnings per share over the decade.
2. Price-to-Earnings (P/E) Ratio: Burberry Group's P/E ratio ranged from 15 to 20 over the past decade, reflecting the market's valuation of the company's earnings.
3. Dividend Yield: Burberry Group's dividend yield fluctuated over the years, but generally remained around 2% to 3%. This indicates that the company provided a modest return to its shareholders through dividends.
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