Final Analysis of Victoria Secret

Essay by CareerMom34University, Bachelor'sA+, November 2014

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Financial Analysis of Victoria Secret


Final Analysis of Victoria Secret

Karissa Keller

Colorado Technical University

Financial Statement Analysis

Professor Alan Fowler

September 18, 2014

Initial Assessment

Income Statement Analysis

Victoria Secret appears to be a profitable company. Victoria Secret is part of L Brands whose operating income was at $ 211 million, up by $24 million from the last quarter. Specifically at Victoria's Secret, sales increased by 4% to reach 5.4 billion but operating income decreased by 6% to 1.71 billion. It appears that Victoria Secret's major expense was their Cost of Goods Sold, COGS, which totaled at 1.3144 billion. The gross profit percentage as at February 2013 was 47.87% (NASDAQ, 2014).

Balance Sheet Analysis

Assets of Victoria's Secret have steadily increased in the last three fiscal years. As at November 2013, return on Assets was at 12.73% up from 12.2% in January 2013. Return on equities has been high as well, at 105.39%

in January 2012, up from 44% in 2011. Liabilities have also sadly increased in the last four years. Expenses have increased from $630 million in August 2013 to $645 million in November 2013 (L Brands, 2014). The Cost of Goods Sold has decreased however, from $1.527 billion in August 2013 to $1.314 billion in November 2013. Total liabilities were at $7.456 billion in November 2013, up from $6.933 billion in August 2013 (NASDAQ, 2014).

Statement of Stockholder's Equity

Retained earnings were in the negatives for Victoria's Secret stockholders. As at November 2013 it was -$519 million. Common stock was at $153 million but treasury stock was at a negative of -$740 million (NASDAQ, 2014).

Statement of Cash Flows

The net cash provided as a result of operating activities as at January 2014was at 1.279 billion dollars, while the net cash provided as a result of...