Business Valuation of Polo Ralph Lauren Corporation - Mark Moore ...

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Evaluation of the Quality of DisclosureCritical accounting policies are those that are most important to the portrayal of thePolo Ralph Laurens Company’s financial condition and the results of operations, andrequire management’s most difficult, subjective and complex judgments as a result of theneed to make estimates about the effect of matters that are inherently uncertain.In the letter to the shareholders and their annual 10 K report, Polo Ralph Laurenreports most of the information, but does not present detailed information on theircorporate structure such as their exact liabilities and their cost of those liabilities at all, aswell as their current assets. Polo does do a good job at disclosing the information abouttheir return over past years relative to the S&P 500 index. They also briefly explain thecompanies break down, Polo Ralph Lauren operates in three integrated businessoperation segments: wholesale, retail and licensing. Wholesale consists of women’s andmen’s apparel designed and marketed worldwide, which are divided primarily into threegroups: Polo Brands, Lauren and Collection Brands. Retail consists of their worldwideRalph Lauren retail operations that sell the product through full-price and outlet storesand Club Monaco full-price and outlet stores. Licensing consists of product, internationaland home licensing alliances, each of which pay royalties based upon sales of ourproduct, and are generally subject to minimum royalty payments.The Management gave brief explanations on all three of the business Segments thatmake up Polo Ralph Lauren. Wholesale operating income decreased primarily as a resultof decreased net sales in our domestic men’s business and European wholesaleoperations. The incremental effect of Lauren sales in the fourth quarter on the wholesalebusiness income from operations was largely offset by start up and ordinary operatingexpenses associated with the Lauren wholesale business.20
Stock Classes and OwnershipTotal Common Shares outstanding- 104.78 mil.Preferred stock- 0100% stock in Common sharesInstitution NameFIDELITY MANAGEMENT &RESEARCH COTop Institutional HoldersShares Position ValueHeld (000)% Shs.Out.PortfolioDate6,471,398 $186,376.26 6.47% 12/31/2004FRANKLIN ADVISERS 2,348,500 $67,636.80 2.35% 12/31/2004ROYCE & ASSOCIATES 2,087,300 $60,114.24 2.09% 12/31/2004JENNISON ASSOCIATES 1,826,290 $52,597.15 1.83% 12/31/2004BAMCO (BARON CAPITAL) 1,665,604 $47,969.40 1.67% 12/31/2004APEX CAPITAL 1,538,000 $44,294.40 1.54% 12/31/2004LAZARD FRERES ASSETMGMTBUCKINGHAM CAPITALMANAGEMENTPEREGRINE CAPITALMGMTAMERICAN EXPRESSFINANCIALBARCLAYS GLOBALINVESTORS INTL1,458,306 $41,999.21 1.46% 12/31/20041,058,203 $30,476.25 1.06% 12/31/20041,022,600 $29,450.88 1.02% 12/31/2004859,888 $24,764.77 0.86% 12/31/2004801,429 $23,081.16 0.80% 12/31/2004VANGUARD GROUP 660,412 $22,222.86 0.66% 3/31/2004BOSTON COMPANY 680,130 $19,587.74 0.68% 12/31/2004WALL STREETASSOCIATESCANTILLON CAPITALMANAGEMENT LLC586,800 $16,899.84 0.59% 12/31/2004534,500 $15,393.60 0.53% 12/31/200421
Page 1 and 2: Business Valuation of Polo Ralph La
Page 3 and 4: Executive SummaryThe objective of t
Page 5 and 6: Industry Overview and Analysis.Comp
Page 7 and 8: Products and Services:Polo Ralph La
Page 9 and 10: Company-operated a total of 3,022 s
Page 11 and 12: Ralph Lauren lifestyle through new
Page 13 and 14: Lauren must remain a respected inno
Page 15: Net Accounts ReceivableA reserve fo
Page 18 and 19: offset by the increase in selling s
Page 22 and 23: Ratio Analysis of Polo Ralph Lauren
Page 24 and 25: for the company. The Times Interest
Page 26 and 27: average of this ratio, with the exc
Page 28 and 29: (In millions of dollars)Annual Bala
Page 30 and 31: Based on the Comparable forward P/E
Page 32 and 33: occurred because their Book Value a
Page 34 and 35: Sensitivity Analysisg0 0.02 0.03 0.
Page 36 and 37: on those obligations. This valuatio
Page 38 and 39: AppendixCross Sectional (Benchmark)
Page 40 and 41: Net Profit Margin 4/3/2004 3/29/200
Page 42 and 43: Return on Equity (ROE) 4/3/2004 3/2
Page 44 and 45: Quick Ratio 4/3/2004 3/29/2003 3/30
Page 46 and 47: Discounted Dividends (Amounts in mi
Page 48: Residual Income 1 2 3 4 5 6 7 8 9 1
Page 51 and 52: 51Polo Ralph Lauren Corp.As Reporte
Page 54 and 55: 54Polo Ralph Lauren Corp.As Reporte

Business Valuation of Polo Ralph Lauren Corporation - Mark Moore ...

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