A. Evaluate the sales, operating expenses, gross margin, net-profit margin asset, debt and equity structure, of Michael Hill International Ltd and explain trends and changes found using the common-size financial statements.

B. Using relevant ratios, and other associated information available in the public domain, assess the financial health of Michael Hill International Ltd based from the point of view of an investor in share capital.

C. Assume you are a banker evaluating a loan request from Michael Hill International Ltd for $ 50 million. What would be your concerns when making a decision regarding approval or denial of the loan request? Justify.

Common -Size Balance Sheet 2015 ($000) 2014 ($000) 2015 (%) 2014 (%) Cash Inventories Other current assets Total current assets Other non-current assets Deferred tax assets Total tangible assets Intangible assets Total assets Total current liabilities Non-current borrowings Other long term liabilities Total liabilities Net assets Reserves and retained profits Paid up capital Treasury stock Total shareholder equity 6,797 182,232 39,378 228,407 67,734 48,381 344,522 6,491 351,013 69,879 45,116 48,397 163,392 187,621 183,861 3,767 8,109 179,280 25,204 212,593 58,488 62.324 333,405 6,413 339,818 71,005 56,000 31,528 158,533 181,285 177,634 3,702 -51 181,285 1.94% 51.92% 11.22% 65.07% 19.30% 13.78% 98.15% 1.85% 100.00% 37.24% 24.05% 25.80% 87.09% 100.00% 98.00% 2.01% 0.00% 100.00% 2.39% 52.76% 7.42% 62.56% 17.21% 18.34% 98.11% 1.89% 100.00% 39.17% 30.89% 17.39% 87.45% 100.00% 97.99% 2.04% -0.03% 100.00% 187,621