Le Chateau Analysis

1958 words 8 pages
Table of Contents 1. Introduction 1 2. Company’s Current Strategy 1 2.1. Vision 1 2.2. Mission 1 2.3. Objectives 1 2.4. Corporate level strategy 1 2.5. Business level strategy 1 3. Evaluation of Current Strategy Performance 2 3.1. Competitive performance 2 3.2. Financial performance 2 4. External Analysis 3 4.1. General external environment 3 4.2. Industry situation analysis 4 4.2.1. Industry structure 4 4.2.2. Industry directions and trends 4 4.3. Competitive situation analysis 4 4.3.1. Competitive forces (Porter analysis) 4 4.3.2. Key competitor’s analysis 4 4.4. External analysis conclusion 5 5. Internal Analysis 5 5.1. Company’s resources, capabilities, competencies, and …show more content…
3. Evaluation of Current Strategy Performance 4.6. Competitive performance
Trend in Sales as of 2009: * Increasing since 2005 (US sales down compared to 2008). * Drop in women’s clothing sales of 0.00556% in 2009. * Sales per square foot unstable with the lowest in 2009 (Appendix A).

Must improve sales in women’s division to achieve objective.

4.7. Financial performance
Each $1 of sales generated 16.7 cents of profits (2009). Profit margin ratio has been increasing since 2005, with a slight drop of 0.25% in 2007. Key to compare ratios with competitors in the same field.
(Appendix B)

Profit Margin: 2009: 16.70%
2008: 15.03%
2007: 12.64%
2006: 12.89%
2005: 10.09%

Le Chateau has a very strong ratio where $3.03 of current assets covers $1 of liabilities. The high ratio is most likely due to the large inventories it has to carry. Lack of data to perform inventory turnover ratio.
Current Ratio:
2009: 3.03
2008: 2.55
2007: 1.75
2006: 2.52
2005: 2.61

Le Chateau is in great position as it has $1.75 in cash or cash equivalents for every $1 in current liabilities.

Quick Ratio:
2009: 1.75
2008: 1.59
2007: 1.08
2006: 1.63
2005: 1.62

For each $1 of shareholders’ equity, Le Chateau had 20 cents of liabilities, an increase from 2008. Le Chateau doesn’t have a significant amount of debt and has seen a growing amount of equity investment over the years.

Debt to Equity:
2009:

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