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La-Z-Boy Financial Ratios

825 Words4 Pages

The Balance Sheet, an Income Statement, Statement of Cash Flows and a Statement of Shareholders’ Equity are the four most important financial statements released by a public company every quarter. This let investors, creditors, financial professionals, regulatory authorities, and other interested parties an inside look into company’s operations and thereby gaining an understanding of an organization’s financial health. This report provides a financial analysis and interpretation of the La-Z-Boy Incorporation. This report will analyze some of the key trend/ratios that were discussed in Chapter 4 of Controllership 8th Edition text by Steven Bragg. Measures for Profitability Profitability: Net profit measures the fundamental profitability …show more content…

Operating income for the Fiscal year (FY) ended 2017 was $130.5 million. La-Z-Boy’s revenue for the FY17 $1.52 Billion. Therefore, La-Z-Boy’s Operating Margin % for the FY17 was 8.6%. Below chart from the La-Z-Boy annual report shows Operating Margin is growing year-over-year and it’s a very positive trend. The favorable Operating Margin trend is an indication that company’s Controller and business managers are controlling expense and generating profitable revenue from the operation. La-Z-Boy’s revenue has been flat from FY16 to FY17 however, its improving margin indicates how successful a company’s financial & business leaders are at controlling …show more content…

It is a very reputable brand for its recliners and known for a quality and durability. La-Z-Boy strength is their solid balance sheet and cash flow. Company’s growing operating margin, positive profitability, ability to turn quickly assets into cash, excellent cash flow adequacy and a steady stream of cash in a form of dividends are their major financial strength. On the other hand, company’s current flat sales trend when the economy is performing really well and its impact on the whole financial is the biggest challenge for the company leaders. Further, company’s minimal debt and excess cash provide protection against struggling time. However, at the same time, it indicates it is not being put to use for growth or

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