ASS #1 Step 2!

So basically my company is a clothing retailer. It has been pretty interesting looking at the Board of Directors who control the company, the Chairman now (Michael J. Gazal) is the son of the founding chairman of the Gazal group (J.S Gazal). 

After reading a fair bit of the Annual Review and trying to get my head around what information I am meant to be looking at I have taken this exert out of the report.

"Review of Financial Performance

Gazal posted an after-tax profit of $12.5m for the 12 months ended 30th June 2014, an increase of 17.2% compared to the previous corresponding period.

In February, the company entered into a joint venture with Phillips Van Heusen (―PVH‖) to form the PVH Brands Australia Pty Limited Joint Venture (―the PVHBA JV‖) for the exclusive distribution of Calvin Klein underwear, Calvin Klein jeans and the rights to introduce other Calvin Klein categories and retail concepts in the Australian market. As part of the JV‘s creation, Gazal transferred its Calvin Klein underwear business to the JV. The after-tax profit includes $6.5 million additional consideration arising from the transfer of the Calvin Klein Underwear business to the 50% owned PVH joint venture company which occurred on 2 February 2014.

Sales revenue decreased slightly by 1.2% on the prior period to $276 million. Gross profit margins across the Group were slightly lower at 45% compared to 47% in the prior year due in part to the cost of sales increase of 2% driven by the deteriorating value of Australian dollar on product sourced predominantly from China and Indonesia. Gross profits in the prior period also benefitted from the one-time sale of inventory from the NSW Health contract in the Wholesale Group.

Key operating costs have been maintained in line with last year despite increased marketing and payroll costs associated with the opening of new outlets in the Direct to Consumer group.

Review of Financial Position

The Gazal Group maintained its net debt to equity at conservative levels finishing the year with a ratio of 33.8% compared to 28.7% last year. Cash flows from operating activities were lower than last year reducing from $11.6 million to $9.1 million mainly due to lower trading results and higher interest charges. Overall net debt levels, however, have been largely maintained in line with last year as a result of planned investments in new outlets during the year and the $6.5m consideration from the transfer of the Calvin Klein Underwear business.

The Group focused on inventory levels in FY14 and these have decreased from $61 million to $51 million despite the increase in new outlets during the year. Key drivers of inventory reductions were better stock management in the retail outlets and the planned transfer of the Calvin Klein operations to the PVHBA JV. The seasonal and aged stock provisions were all as per expectations at year end.

Capital Management

During the year in review, the Company bought back 577,865 shares for a total consideration of $1.5 million."

So I'm under the impression that this information is the key information I need to get a brief idea of the financial status of my company. Oh and also they paid out just over $6m in Dividends during the 2013-2014 period.

Help is greatly appreciated!!