BILLABONG

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BILLABONG

• Samantha Mowatt
• ACG2023.004

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Executive Summary

• Over the past year there has been an overall
  increase in Billabong industries with record
  highs in sales. This was a good year for
  Billabong stockholders and Billabong
  representatives plan to make the success
  long-term.
• Billabong Biz Behind the brand

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Part A. Introduction

• Derek ONeill was appointed Chief Executive
  Officer effective January 1, 2003
• Home Location 1 Billabong
• Burleigh Heads QLD 4220
• AUSTRALIA
• Year ended June 30, 2006
• Billabong is a board sport-oriented business with
  its core business in the marketing,
  distribution, retailing, and wholesaling of
  apparel, footwear, accessories, eyewear, and hard
  goods under the Billabong, element, Von Zipper,
  Honolua Surf Company, Kustom, Palmers Surf, and
  Nixon Brands
• The majority of revenue generated is in
  Australia, North America, Europe, Japan, New
  Zealand, and South America

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Audit Report

• PricewaterhouseCoopers Chartered Accountants
• 1 Eagle Street
• Brisbane QLD 4000
• AUSTRALIA

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Stock Market Information

• Most recent price of Billabongs stock is 14.24
• Trading range of June 30, 2005 thru June 30, 2006
• 23.5 cents per fully paid share
• Above information dated October 11, 2005
• In my opinion stockholders should sell shares
  because the season is changing and even though
  2006 was a successful year, Billabongs sales are
  highest during the warmer seasons.

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Industry Situation and Company Plans

• In the future outlook Billabong representatives
  plan to increase the industry on a more long-term
  basis. In addition, improvements in European, as
  well as, worldwide sale is also a goal.

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Income Statement

• Single-step format

2006 000 2005 000
Gross Profit 212,949 183,659
Income from operations 1,027,832 848,430
Net income 145,659 125,232
There was a steady increase from 2005 to 2006
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Balance Sheet
Assets Liabilities Stockholders Equity
2006 1,257,732 545,609 712,123
2005 937,938 300,604 637,334
Total assets in 2006 increased from 2005
however, there was also a substantial increase in
total liabilities
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Accounting Policies

• Executives plan to increase liabilities however,
  in the end these liabilities will show for
  further profits
• In the financial statements, the issues of
  liabilities are definitely a concern

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Financial AnalysisLiquidity Ratios
2006 2005
Working Capital 293260.00 203610.00
Current Ratio 2.6 2.5
Receivable Turnover
Avg. days sales uncollected
Inventory Turnover
Avg. days inventory on hand

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Financial AnalysisProfitability Ratios
2006 2005
Profit Margin 14.2 14.9
Asset Turnover .23 times 1.32 times
Return on assets 6.0 3.2
Return on equity 99.6 82.1
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Financial AnalysisSolvency Ratios
2006 2005
Debt to equity 25.4 21.4
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Financial AnalysisMarket Strength Ratios
2006 2005
Price/earnings per share 70.8 cents 61.0 cents
Dividend yield 70.5 60.9