Blue Nile Essay

The spreadsheet I did presents a summary of blue angel Nile financial results from 2005 to 2009. From 2005 to 2007 revenues and can income both change magnitude. The deep recession which began in late 2007 seriously touch the revenue in 2008. And then in 2009 the revenue recovered and increased slightly. I am going to analysis the financial performance in three parts. First, profitability ratios. gruesome Nile had steady return on summation ratios around . 1. The attach to utilized its assets very efficiently and outperformed their competitors.By doing look for on Yahoo Finance, we know the diligence return on integrity is 0. 18. Blue Niles return on fair play ratio was often higher. It created better return to investors. Net profit margins were just aboutly subalterner than the industry average level. For example in 2009, Blue Nile only had net income of 4 cents for each dollar sale. Its low margins can be explained by its low pricing of products. As Rita said, Blue Nil e had a much lower markup than Tiffany. Blue Niles number for liquidity ratios are impressive.Such high ratios from 2005 through with(predicate) 2009 show the companys great ability to pay short debt. One of the companys strategies is that suppliers finance Blue Niles gross revenue growth. (??? ) The business model contributed to higher sales volumes with minimal additional big(p) enthronization. With respect to leverage ratios, Blue Nile had really low long-term debt to equity ratios compared to the industry. Tiffanys long-term debt to equity was as high as . 39.Because Blue Nile offered a balance between the debt to equity range and firms cost of capital, its capital structure was optimal. The company had low capital investment financed by creditors and bondholders. Its debt to assets ratios are over . 5, which means it, had a lot of debt obligations. However, most of the companys debt was current and it was able to pay off creditors in a timely manner. Creditors did not need to worry about acquire paid. Blue Niles strong financial performance intuitively indicated the companys strategies were pretty well-conceived and well-executed.