Introduction to Financial Accounting

Posted: August 29th, 2013

Introduction to Financial Accounting

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Introduction to Financial Accounting

• The accounting standards used at Abercrombie and Fitch is SEC – Securities and Exchange Commission while Hennes & Mauritz use the IFRS – International Financial Reporting Standards.
• Auditing standards used at Abercrombie and Fitch are in accordance to Public Company Accounting Oversight Board (United States) while Hennes & Mauritz used International Financial Reporting Standard.
• When an investor visits the Abercrombie and Fitch website, the information given on it contains a lot of information from the company’s governance to the financial statements of the company that makes it easy for a person to analyze the information. The website contains useful information that a person need to know about them. The financial statement has a traditional format.
• The Hennes & Mauritz website shows why the company exists, how long they have been in the market, the number of employees. The company website gives information about its financial position for the last five years. It has listed its top shareholders (Davis, 2010).
• The website is very colorful. The financial report is done differently as it even has colored borders. The website is easily readable. Hennes & Mauritz financial statement is easy to read. The layout is user friendly (Hennes & Mauritz, 2012).
• Both financial statements give important details about the organizations. They contain information that an investor can use to predict the future performance of the organizations. An investor is able to get a lot of information from both organizations.
• From the information provided, a user can easily make a decision whether to invest or not. Both financial statements are done properly and thoroughly.
• Both companies have given too many details especially on the financial, which can be confusing to a reader.

Retrieved from,

http://investing.money.msn.com/investments/stock-balance-sheet?symbol=ANF

Retrieved from http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=HMB:SS

• The company, which is most profitable, is Abercrombie and Fitch.
• The currency used in trading is different. Abercrombie and Fitch is quoting in US Dollars while Hennes & Mauritz is quoting Swedish currency.

• Hennes & Mauritz’s profits went down because the prices of cotton have gone up, high cost of transport and the Swedish currency had become stronger. Abercrombie and Fitch sales did not rise as expected because of their strategy in Europe.
• Hennes & Mauritz is a domestic company while Abercrombie & Fitch is an international company. This makes profits from both companies have a big difference.
• Hennes & Mauritz customers are mainly the local people while Abercrombie and Fitch also targets international customers as well as local people. This makes the profit margins different.
• Hennes & Mauritz products are more affordable compared to those of Abercrombie & Fitch. Hennes & Mauritz Company is very profitable. Their revenues are approximately US dollars 16 billion.
• Abercrombie and Fitch emphasizes on the label and customer experience (Abercrombie & Fitch, 2004). Their total sales is approximately US dollars 2.9 billion with income totaling to US dollars 254,000.
• The information used is retrieved from the Abercrombie & Fitch website and the Hennes & Mauritz website.

Hennes & Mauritz AB-B SHS (2012) Bloomberg Business Week, Retrieved from http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=HMB:SS