An Empirical Study on Financial Statement Analysis of Myer Holdings and David Jones

Abstract

Financial statements reflect the financial health of Corporation, with the help of careful analysis of financial statements, a stakeholder can be in a better position for decision making. This paper aims to critically analyze the financial statements of two retail giants of Australia, Myer Holdings and David Jones. The financial statements were extracted from the official website of both the companies, for a period of ten years, from year 2009 to 2018. The historical financial statements of both the companies are carefully analyzed with the help of various financial analysis tools like composite financial statement analysis (both horizontal and vertical analysis) and ratio analysis, highlighting the return on earnings and financial leverage of both the organizations. The objective of the study is to draw a line of comparison between both the organizations, in terms of their financial performance, organizational efficiency, capital structure, financial leverage and overall return on equity (roe). The study reveals the financial strength and weakness of both the competitive firms during the years of study. Although both the competitive organizations are similar in terms of their financial performance and financial position, yet Myers had a clear edge over its competitor David Jones. Myers Holdings has a better control over its cost and profitability than David Jones, thus reflecting a clear-cut edge over its rival.