Financial Analysis:

There are some recent changes in the market that we need to consider worldwide. 90% of the
Hong Kong sales are coming from China and it is from tourists visiting the country. The recent
protests decreased the sales of coach products up to 22%. Please find below the trend of coach
stock market as of Oct 15, 2014 in blue and you will understand the volatile daily market of the
company as the result. So the company should consider increasing the outlets and retail stores
in that area in long term and in short term it is recommended to increase the discount and sales
item in Chinese stores to avoid the 22% loss of sales.




Also based on the market trend of the company, we are focusing on improving the return on asset which
is used by shareholder to indicate how well and efficient the company is using its capital and will attract
more investors in the future. This metric can be increased by the flowing strategies:
Minimize the cost of assets including maintenance of the equipment and keeping the inventory
in good condition to avoid damages and loses in inventory
Providing real time manufacturing to synchronize operations with changing market conditions
to successfully deliver to customer demand
Earnings per share which is the profits a company earns compared with the amount of shareholders
equity is another indication of the growth of the company. This metric is one of the most important
metrics for the public and investors and other stakeholders as it shows how profitable the business is. To
improve EPS, coach can apply the following strategies.
Reduce taxes by going off shore to China and India
Studying and taking advantage of any international and local policies which is include
subsidiaries or any other incentives
Increasing financial leverage and debt equity also increases return on equity, even though we
should consider fixed liabilities associated to financial leverages as such in our cash budgeting
Increasing return on sale in a rate which is faster than rising operating expenses. This can be
done by increasing volume of the sale through marketing strategies
Key Ratios -> Profitability
Margins % of Sales Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15
Revenue 100 100 100 100 100 100
COGS 27 27.29 27.23 27.14 31.4 23
Gross Margin 73 72.71 72.77 72.86 68.6 78
SG&A 41.12 41.33 41.02 42.83 45.29 40
R&D 20
Operating Margin 31.88 31.38 31.74 30.04 23.3 40
Net Int Inc & Other 0.05 -0.09 -0.13 -0.08 0.05 1.20
Profitability Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15
Net Margin % 20.37 21.18 21.81 20.38 16.26 25
Asset Turnover (Average) 1.43 1.63 1.66 1.53 1.34 2
Return on Assets % 29.21 34.53 36.2 31.18 21.72 35
Return on Equity % 45.91 56.5 57.63 47 32.35 60
Return on Invested Capital % 45.1 55.63 56.88 46.74 31.43 60

Key Ratios -> Growth
Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15
Revenue %
Year over Year 11.68 15.27 14.54 6.55 -5.3 29.47
3-Year Average 11.36 9.35 13.82 12.05 4.94 33.47
5-Year Average 16.1 14.52 12.76 9.8 8.27 25.52
10-Year Average 20.72 21.04 20.81 18.2 13.79
Operating Income %
Year over Year 18.34 13.45 15.87 0.83 -26.53 39.9
3-Year Average 5.01 4.39 15.87 9.85 -4.96 66.95
5-Year Average 13.09 11.28 8.76 5.85 2.88 61.83
10-Year Average 35.28 29.07 27.46 20.12 9.68
Net Income %
Year over Year 17.9 19.85 17.95 -0.43 -24.47 48.48
3-Year Average 3.46 4 18.56 12.07 -3.92 65.44
5-Year Average 13.59 12.25 9.38 5.73 4.62 58.7
10-Year Average 34.27 29.97 28.32 21.58 11.56
EPS %
Year over Year 21.99 25.32 20.89 2.27 -22.71 47.06
3-Year Average 9.8 10.4 22.72 15.71 -1.51 62.05
5-Year Average 18.43 18.12 14.94 10.72 7.87 56.95
10-Year Average 36.34 31.42 31.12 24.76 15.16


Key Ratios -> Cash Flow
Cash Flow Ratios Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15
Operating Cash Flow Growth % YOY 428
Free Cash Flow Growth % YOY -266
Cap Ex as a % of Sales 2.25 3.55 3.87 4.76 4.57 5.53
Free Cash Flow/Sales % 25.22 21.29 21.78 23.1 15.93 26.29
Free Cash Flow/Net Income 1.24 1.01 1 1.13 0.98 1.16


Key Ratios -> Financial Health
Balance Sheet Items (in %) Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15
Cash & Short-Term Investments 28.23 26.64 29.55 32.13 23.71 28.43
Accounts Receivable 4.42 5.42 5.62 4.97 5.42 4.85
Inventory 14.73 16.01 16.25 14.86 14.36 13.69
Other Current Assets 5.43 7.04 6.71 6.68 7.15 5.68
Total Current Assets 52.8 55.12 58.13 58.64 50.65 52.66
Net PP&E 22.23 22.1 20.76 19.67 19.49 15.13
Intangibles 12.79 12.93 12.43 10.05 10.13 18.45
Other Long-Term Assets 12.17 9.85 8.68 11.65 19.73 13.76
Total Assets 100 100 100 100 100 100
Accounts Payable 4.28 4.5 5.01 5.06 4.2 4.82
Short-Term Debt 0.03 0.03 0.72 0.01 3.84 0.92
Taxes Payable
Accrued Liabilities 17.13 15.5 14.64 12.69 11.63 13.77
Other Short-Term Liabilities 2.48 2.76 2.69 2.53 0.21
Total Current Liabilities 21.44 22.5 23.13 20.46 22.2 19.73
Long-Term Debt 0.98 0.89 0.03 0.01 0.24
Other Long-Term Liabilities 16.56 15.41 12.64 11.32 11.72 3.36
Total Liabilities 38.99 38.8 35.8 31.79 33.92 23.34
Total Stockholders' Equity 61.01 61.2 64.2 68.21 66.08 76.66
Total Liabilities & Equity 100 100 100 100 100 100


Liquidity/Financial Health Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15
Current Ratio 2.46 2.45 2.51 2.87 2.28 2.67
Quick Ratio 1.52 1.42 1.52 1.81 1.31 1.69
Financial Leverage 1.64 1.63 1.56 1.47 1.51 1.3
Debt/Equity 0.02 0.01




http://www.apriso.com/value/return_on_assets.php

http://smallbusiness.chron.com/reasons-changes-accounts-receivable-turnover-33721.html

http://www.investopedia.com/exam-guide/cfa-level-1/financial-ratios/growth-potential-ratios.asp
http://www.marketwatch.com/investing/stock/coh
http://smallbusiness.chron.com/improve-return-equity-59183.html