Employee satisfaction
At signet jewelers, headquartered in Bermuda, employee satisfaction is not just about the pay. Various factors influence employee satisfaction in the company. With more than 29000 in its stores back in 2016, it would be expected that signet would be at the limelight of the implementation of the contemporary employee satisfaction strategies.
Nonetheless, the company has received negative reviews from its employees with various concerns. One of the major concerns of the staff at signet is the Lack Of useful work to life balance. The company has been said to overwork its employees and give them less time to bond with their families and friends. The customers have been complaining about the unwillingness of the workers to serve them. That has been attributed to the fatigue and burnout that the workers of signet face.
Delegate your assignment to our experts and they will do the rest.
Supplier satisfaction
In the jewelry, industry of the United States of America and in the other countries that signet has operations. The company has been a pioneer of the application of the appropriate ethical principles when it comes to dealing with the suppliers. The company sources its materials from within Bermuda, the United States of America as well as a few more countries from the rest of the world. Signet maintains a healthy relationship with its suppliers by urging them to uphold the moral standards that satisfy them. Signet also pays its suppliers in good time as per the agreements signed during the handing over of the materials. That keeps the suppliers contented.
Customer satisfaction
Signet has been at the cutting edge of customer service on the jewelry industry. With its state of the art customer retention strategies, the company has been able to attract customers from the different parts of the world and make them happy. Deliveries for the signet customers are handled in good time, and the jewelry products produced by the company are affordable. Marketing efforts by signet have also contributed to the attraction of more customers to the firm as they are expansive. The company has set customer satisfaction efforts, and the management ensures that it achieves the milestones by educating the employees on the importance of customer service and providing that it has been sufficiently integrated into the corporate affairs.
Competitive advantage
In the jewelry industry where signet jewelers are classified, there is increasing competition from the various companies located in the different parts of the world. One of the competitors of signet jewelers is Fossil Group, Inc., which deals in the same products as those of signet. The jewelry market is expanding worldwide as the companies make concerted efforts towards growing their customer bases. That has sparked a new wave of competition for the available market, which has been aggravated by the increase in the level of technology, which has been put into various uses such as the manufacture of the jewelry and their marketing.
Quantitative Analysis
Liquidity
Current ratio
In the financial year 2015, signet jewelers had a current ratio of 3.99 (NASDAQ, 2018). The fiscal year 2016 saw a reduction in the current ratio at signet being at 3.86 (NASDAQ, 2018). The situation worsened in the company in 2017 with the company having a current ratio of 3.32 (NASDAQ, 2018). The steady reduction in the current ratio was an indicator that the company had a reduced ability to pay off its short-term financial liabilities. The decrease in the ability to meet the financial obligations was also a sign of the decline in the current assets in the company and an increase in the current liabilities. Nonetheless, the company was on an averagely good position in the current ratio since it would take care of its obligations with ease.
Quick ratio
Just like the current ratio, the quick ratio at signet jewelers recorded a continuous drop as well. In the fiscal year 2015, signet had a quick ratio of 1.85 (NASDAQ, 2018). The following year, Signet recorded a quick ratio of 1.82 (NASDAQ, 2018). The year 2017 had a worse quick ratio for signet at 1.12 (NASDAQ, 2018). The reduction in the quick ratio at signet jewelers was an indicator of the decline in the company's ability to make use of its most liquid assets to take care of its financial obligations. From a forecasted point of view, signet would be in financial trouble in case the quick ratio nosedived continuously in the next several fiscal years.
Solvency
Debt to equity ratio
The debt to equity ratio at signet jewelers had an unstable trend in the last three financial years. In 2015, the ratio was 0.45. That meant that 45% of the total equity at signet was financed by debt. The debt to equity ratio rose to 0.57 in 2016. The rise in the ratio indicated an increase n the amount of equity being funded by debt. That was an adverse effect on the financial health of the company. The company rose from the ashes in 29017 by recording a debt to equity ratio of 0.29. The company's financial health was improving, and there would be the hopes of increasing the current assets of the company due to the education and clearance of the various debts that the company owed the financial institutions.
Long-term debt to total assets ratio
Compared to the other companies in the jewelry sector, signet had a considerably low amount recorded as debt. The assets of the company have also been growing as observed in the last three financial years. In 2015, signet had a long-term debt to assets ratio of 0.21. That meant that 21% of the total assets at Signet were financed by long-term debt. The company recorded the same ratio in 2016 at 0.21. Although most of the assets at Signet were not funded by debt in the two fiscal years, it would be necessary for the company to ensure that fewer assets are taken care of by the long-term external debt. The ratio reduced in 2017 to 0.13. With a reduction in the number of assets that were financed by the long-term loans and debts, the company indicated a start of financial health, which would be a foundation for the coming years.
Profitability
Gross profit margin
The cost of goods sold in 2015 and 2016 at signet jewelers was lower than those of 2017 were. The gross profit margin for both 2015 and 2016 at signet was 37%. That was an indicator of the average productivity at signet jewelers at the time when the company was dwindling in financial crises. In 2017, however, the company recorded a reduction in the gross profit margin to stand at 35%. That was an indicator of the firm's decrease in profitability and evidence of the use of more money to pay for the production and the sale of goods. That was not commendable for the financial health of signet.
Return on equity
The returning of the net income to the shareholders of signet was low in the fiscal year 2015 with the return on equity being at 15 % (NASDAQ, 2018). That explained the low yields from the financial operations and projects that signet was undertaking. The ROE rose to 22% in the fiscal year 2016 (NASDAQ, 2018). That was a clear indicator of the increase in the net income of the company and the subsequent increase in the revenue generated from the sales of the company's products. The ROE in 2017 showed a slight reduction and stood at 21 % (NASDAQ, 2018). That was an indicator of the slight decrease in the net income and therefore the returns that would be given to the company's shareholders reduced.
Trend Analysis
Revenue and cost analysis
The revenue of signet jewelers recorded a gradual and continual reduction from the fiscal year 2015 to 2017. In 2015, the revenue of signet jewelers stood at $ 6,802,800,000 (NASDAQ, 2018). The revenue was recorded as $ 6,690,900,000 in 2016 and $ 6,511,100,000 in 2017 (NASDAQ, 2018). Signet had a reduced number of products sold to the customers due to the reduction in the marketing efforts. The cost of goods sold at signet was $ 4,109,800,000 in 2015 (NASDAQ, 2018). There was a reduction in the COGS in 2016 and the value recorded was $ 4,047,600,000 (NASDAQ, 2018). The increase in the COGS in 2017 was an indicator of the reduced financial health that signet had. The COGS in 2017 stood at $ 4,063,000,000 (NASDAQ, 2018). The company certainly needed to generate more money to boost its production.
Opinion about the company's financial position
Signet Jewelers is one of the best companies in the jewelry industry. The company's total assets in 2015 were worth $ 6,464,900,000 (NASDAQ, 2018). The value of the assets increased across 2016 and totaled to $ 6,597,800,000. The assets of the company reduced in their worth to $ 5,839,600,000 (NASDAQ, 2018). The reduction in the assets in 2017 was expected to affect other financial measures in the company. For instance, the current ratio, quick ratio and the return on assets were changed. The reduction in the assets also indicated a nosedive in the financial capability of the company as the revenue also reduced in the same year.
Part 2
Detailed analysis and important calculations
Signet Jewelers has had a reduction in the revenues that the company generates from its financial activities. The three-year-long continuous decrease in the revenue of the company can be attributed to the following reasons. The first reason is the saturation of the existing market. The jewelry market for signet may be saturated, and it may be necessary for the company to seek other markets for its products in the different parts of the world. The reduction in the revenue generated from the products sold by signet from 2015 to 2017 can also be indirectly attributed to the reduction in the marketing activities in the company. The company has to integrate technology in its marketing to save costs and attract more customers for its products at once. The other reason for the reduction in the revenue generated is the increase in competition from the production of similar goods as well as the output of the substitute products. The costs of production have also increased at signet and therefore reducing the gains from the sale of the products during the marketing and sales processes in the company. The reduction in the revenue is an indicator of the company's financial distress, which has been experienced for some time in the company and is set to worsen if the reasons for the reduction in revenue are not taken care of by the management.
The decrease in the revenue collected by the company from the sale of its jewelry products has led to the continuous reduction in the gross profit of the company. The decline in the earnings of the company has had various effects on the company's performance. For instance, the gross margin has reduced and therefore the financial status of the company, from the lenders' perspectives may be questionable and thus reducing the lending activities to the company. Furthermore, the profitability of the company may lead to the doubts among its shareholders in the investment, which leads to the reduction in their number. That will lead to a further decrease in the financial performance of the company. The profitability of the company has reduced the net income of the company, particularly in the fiscal year 2017, which has been a cause of concern for the financial direction that signet jewelers might be taking, compared to its competitors in the other parts of the world.
References
NASDAQ. (2018). SIG Key financial ratios . Retrieved from https://www.nasdaq.com/symbol/sig/financials?query=ratios
