Business Assignment on Superstyles

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1. 2011 2012 ROCE = 30% ROCE = 34.58% Gearing = 32% Gearing = 28.2 % Asset turnover = 4.83 Asset turnover = 2 .38 Appendix A gave me a overall view of superstyles profitability and asset turnover. In 2012 superstyle has increased its return on capital employed by nearly 5 %. This is an advantage for the business, as it states that the business gets more money back from their money invested in 2012. Not only the ROCE has improved, the gearing ratio has decreased by 4%. This means the business is low geared, and it reduces the long term risk of superstyle. Nevertheless Superstyles asset turnover has decreased. This is not so good as they receive less money from every asset owned. However the reason for that is their high profit margin, which means that it will decrease when the profit margin will decrease as well. Overall Superstyles financial position regarding the profitability, is good. They have increased their return on capital employed, and have decreased their gearing. This shows the financial position is improving. The asset turnover will increase when their profit margin increases, the high profit margin is because they are currently expanding . 2. To a certain extent, the high level of popularity was from their effective market analysis. In 2012 superstyles spent 20% of their profits on marketing. Compared to the industry average superstyles spends 50% more on marketing, however I think it is very useful as they are expanding and don’t have the brand image and reputation yet. Never the less one of the biggest aspect for their sudden popularity was that celebrities where seen In superstyle cloths. Using famous people is one of the best marketing tools you can use, as potential consumers might be attracted by their appearance and style. Especially young people, which is superstyles target consumer, is attracted by

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