FINANCIAL PERFORMANCE ANALYSIS BASED ON PROFITABILITY RATIO: STUDY AT INDITEX 2019-2023

• Main Author: Prameswari Anwar, Namira
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/85693
• Institution: Institut Teknologi Bandung

Inditex, among the largest fashion retailers across the globe, has been growing fast and hence probed into their financial performance. This paper will evaluate the financial health of Inditex examining profitability indications of years 2019 to 2023, a period that includes the COVID-19 pandemic. This research provides a comparative analysis of key financial ratios of Inditex and its major competitors Inditex, Fast Retailing and H&M. The study looks into different financial ratios to bring forth a meaningful comparison and discussion. It also aims to study the profitability of the three main players in the global fashion retail industry on the basis of gross profit margin and net profit margin for the period under review. The research confirms that Inditex has been able to maintain a high gross profit margin throughout the entire period of observation. Inditex's stronger profitability performance versus Fast Retailing and H&M has confirmed that it has maintained its lead in the industry of unexpected global crises like the COVID-19 pandemic. The argument in the paper is the financial position of Inditex exceeds the main competitors. As a result, it is recommended Inditex continuing lower its cost base, look new geographies to expand, and invest in digital initiatives to put further distance between itself and its competitors on the global stage. Furthermore, it is important for Inditex to keep a close eye on gross profits and net losses and escalate its benchmark, for rival exposure, to secure its leadership position against different market dynamics that technological development continues to bring up. This study has been made on the evaluation of Profitability Ratios in order to analyze how the company is performing in the global space and how prominently it has been positioned. The extensive research and recommendations provided are to help to guide Inditex growth strategy and sustain its continuous financial wellness journey over the years to come. By having strategic initiatives in operation together with a comprehensive control, Inditex is in a good position to prosper within an intensely competitive environment.