Financing hypermarkets
Carrefour, Eroski, Alcampo, Hipercor…These are the biggest hypermarkets that exist in Spain. And, as any other business, they have to take control of the way they carry out their purchases, sales and the way they get financed in order to obtain profitability.
Understanding the way the hypermarkets get the money is easy, if we analyse the average client payment period and the average suppliers payment period. Usually, the first one is lower than the second, so the finance department have money before paying the suppliers to “play”with it and make it profitable.
Talking about ratios, as inventory are things they sale and become liquid very fast, we can use the liquidity ratio for looking at the situation instead of the acid test. It would be the result of dividing the total of current assets by the current liabilities.
For most of the companies, this liquidity ratio it is said that should be above one, so the assets should be more than the liabilities. How to pay otherwise??? It is not the case of hypermarkets. Why? Because current liabilities are mostly provieded by suppliers, is the way it works.
The period of time the hypermarket have to end up with its debts is a few months, so we can conclude that the debt structure ratio, comparing medium and long term debt with the one in the short term is always low, related with other businesses that work with loans from banks.
The fixed assets ratio, that compares fixed assets with the total assets of the balance sheet, is always below one, but very low for hypermarkets that have most of its inventory with an expiration date (products they sell). This is the main characteristic that makes the market of food different.
Comentarios desactivados en Financing hypermarkets /
30 Nov 2011
por
Elena Arboleya Lopez
Sin categoría /
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