Internal factor Evaluation on Michael Kors Company - Essay Example

While compared to the industry performance, Michael Kors holdings Ltd. Has maintained a steady growth, sending a positive message to the investors. Sales by the company were higher than the aggregate sales by the entire industry. Moreover, the net income too grew consistently with the industry indicating a positive growth of the firm in the industry. For instance, the net income of the company for a 5 year average period was 114.64 against that of the industry that was at 18.56. Price earnings ratio (P/E Ratio) is the current share price of a company compared the company’s per share earnings.

While arriving at the price earnings ratio, the market value per share of the company is divided by the company’s earnings per share. High Price earnings ratio gives an indication to the investors to expect higher earnings at the end of the financial year. Previously, since the decision to go public in the year 2011, the company has had a steady growth and has managed to be a leading market in the high end fashion industry. Cited as its biggest strength, the company has been able to avoid the pitfalls that have befallen its rivals in the design industry (Caplinger web).

The steady increase has been reflected on its performance against the overall market performance, registering a higher current ratio than the industry’s general performance. Price sales ratios of the company are also higher than those of the company, while price cash ration are also higher than the industry’s. Profit Margins of a company indicate the level of profitability of a company in relation to the sales and revenue obtained. A high profit margin indicates a positive growth and increased levels of income for the shareholders.

While compared with the average industry’s performance, the profit margin indicates the most profitable firms in an industry where investors are guaranteed their returns. Michael Kors has maintained a steady growth in its sales volume which has