Laura Ashley Holdings

?rem ARSLAN ID: 20600184 Laura Ashley Holdings: The Battle for Survival Case 1-How serious is Laura Ashleys pecuniary situation. Laura Ashleys business performance has been on the decline since the advance(prenominal) 1990s. The communitys financial situation confirms this as well. Firstly, the slack on sales is important: Sales have declined from 1995 to 1999, with the northwestward America Region being the most noticeable: over 40% of decrease in five years. Operating margin is -5.8 %, while its competitors have over 10%. That means LA is losing money on each sale and cant redeem its fixed cost with revenues. This situation is not sustainable and shows that the political party wont be able to survive if they do not take necessary precautions immediately. Company currently solitary(prenominal) has one major source of funding, MUI, which owns 40% of Laura Ashleys stocks, and its willingness to ornament further is questionable since £43.5 million of investment resulted with a famine in 1999. This will create insecurity for the future funder candidates. Although they reduces document ratio and the costs due to the sharp reduction on sales; Turnover has decreased from 322.6 (in 1995) to 288.3 (in 1999) meaning that %10 employee turnover loss.

Equity Shareholders fund is the residual shoot or interest of the most junior class of investors in assets, after all liabilities are paid. Laura Ashleys equity has been decrease for last 5 years from 86.1 to 19.7 meaning that 23% decrease. sort out assets decreased 54%. It means that they are melting assets to blot out the huge cost that cannot be covered with sales revenues. This is such(prenominal) a several indicator of how they are operating the company badly. Deficits occurred nearly every year, especially negative cash flow, go forth decreased return for the stockholders and requiring even more to fund inveterate operations Laura Ashleys sales data is toward the very bottom of effort range, less than a quarter of Next plc. The margins and turnover ratios are... If you regard to get a full essay, order it on our website: Orderessay

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