Tiffany and Company is a multinational Luxury jeweller and Speciality Retailer. The company has its headquarters in New York City and the product line includes:
- Jewellery
- Fragrances
- Sterling Silver
- Crystal
- Leather Goods
- Personal Accessories
The company is known in particlaur for it sluxury ornaments particularly diamond jewellery. As for its listing, company is listed in New York Stock Exchange under the ticker of ‘’TIF’’.
Tiffany and Company was originally founded in the year 1837 in New York where it carried out the business of ‘’Stationery and Fancy Good Emporium’’. However it was only during 1853 that the foudner of the company, Charles Tiffany, shifted the focus of their business to Jewellery. Later a full time office was incorported in New York in 1868. Howeevr it was during 1984 that Tiffany was acquired by Tiffany and Company and in 1987 the company went public by selling their IPO in NYSE.
Markets:
At present, Tiffany and Company have stores around the world and the management at regular intervals evaluates potential markets for new stores to be opened. The decision to open new store is based on possible opportunities present on the locatioon being considered and also consumer demand there along with proximity of other luxury brands present there. Following are the markets where Tiffany and Company is present:
- Americas(USA, Canada and Latin America)
- Asia Pacific
- Europe
- Japan
- United Arab Emirates
However, Americas alone account for 48% of total global sales of the company.
Competitors:
Since Global Jewellery Industry is highly competitive, the company experience competition in all product lines from the following companies:
- Michael Kors Holding Ltd.
- Hermes International
- Prada
- Louiss Vuittonn
- Swatch Group
- Coach Inc.
Stock Performances:
Last Two Years:
Last 3 months of Semester:
Ratio Analysis:
In order to understand the financial health of the company, it is required to carry out ratio analysis of the company.
Liquidity Ratios:
Current Ratio:
Quick Ratio:
Commentary:
Our analysis above indicates that the liquidity position of the company had improved in comaporsion to 2012. However, during 2012 with increase in current liabilitie sin proportion to current assets, company had faced liquiudty issues with its liquidity falling as disclosed in our ratio analysis.
Profitability Ratios:
Gross Profit Ratio:
Operating Profit Ratio:
Net Profit Ratio:
Commentary:
In terms of profitability, our ratio analysis indicates that the company is growing low on its profits. The year of 2013 was not profitable for the company in all arenas. Although the company expereinced rise in its profiatbility ratios during 2012 , during 2013 both its gross margins and operating margins had a sharp fall. Howeevr even though, Net Profit Margins had a marginal decline, it was an indication that company has controlled non-operating expenses and it needs to take care of its operations.
Solvency Ratios:
These ratios are considered to be the most important indicator of financial health of the company as it disclose the percentage of Debt in its capital structure.
Debt to Equity Ratio:
Interest Coverage Ratio:
Commentary:
Analyzing the financial leverage ratio of the company we find that although the company increased the percentage of debt from 2011 to 2012 but during 2013 it reduced the amount of debt in its capital structure with its debt equity ratio prevailing at 29.30 as comapred to 36.70% during 2012.
Although, the debt equity ratio of the company is in line with indutsry average of 30%, the major concern for the company is the low interest coverage ratio of 11.9 which is way below than industry avergae of 84.1. Thus, we are coming to conclusion that 2013 was indeed a poor financial year for the company.
Asset Efficiency Ratios:
Asset Turnover Ratio:
Inventory Turnover Ratio:
Commentary:
Our analysis on asset efficiency of the company turns out with same conclsuion that indeed 2013 was not a good financial year for the company. The asset turnover ratio of the company though improved during 2012 but during 2013 it again experienced a decreasing trend. Similarly in terms of efficiency of using its inventory, the same trend was seen as ITR also decreased to .75 in comparison to .80 during 2012.
