Carrefour group: Case study

Résumé du document

According to "Carrefour" financial reports "Carrefour" particularly relies on both "Borrowing" and "Shareholder's equity" at approximately the same level. If we look closer at the charts we can notice that:
-In 2007 shareholder's equity was up to 11,770 million Euros, down to 10,952 million Euros in 2008 and back up to 11,115 million Euros, therefore it is a pretty stable equity.

-As far as borrowings were concerned they were up to 11,523 million Euros in 2007, then up to 12,214 million Euros in 2008 and down to 11,812 million Euros in 2009, therefore they gave kept their borrowings steady. We can therefore conclude that "Carrefour" both relies equally on borrowings and shareholder's equity to raise finance and raise funds for the company, as they definitely are the main types of financing for this company.

Extraits

[...] European consumption decreased during this period. Payout ratio: The pay out ratio represents the percentage of earnings paid to shareholders in dividends. 2007: 171%: This year Carrefour distributed more than the earnings, in other terms it means that the company was tapping it's reserves in order to satisfy shareholders. 2008: This year the payout ratio was closer to it indicates that the company was reinvesting almost all its earnings into the business, it was part of a growing strategy and it represents the time where the company was developing the activity in Asia. [...]

[...] Regarding Carrefour, the pay out ratio is conservative (exception in 2007). The company releases a lot of operational cash and benefits, and like every distributor, has a structural surplus of liquidity (negative working capital: customers pay before suppliers are paid by Carrefour) http://www.dailyfinance.com/ http://www.dividendsranking.com/ http://www.carrefour.com/cdc/finance/publications-and- presentations/annual-reports/ http://www.groupe-casino.fr/fr/En-bref-Chiffres-cles.html http://www.groupe-auchan.com/finances.html I. Introduction to the “Carrefour Group” II. Financing and Capital Structure III. Dividend Policy I. Introduction to the “Carrefour Group” II. Financing and Capital Structure III. [...]

[...] It represents a growth of 7,34% per year. Even if this value has been stable for four years the dividend per share is probably going to grow within the next few years. The group has to face the general decrease of the consumption, indeed its net results has been considerably decreasing since 2007. It represented 1,272 billion Euros in 2008 to 0,327 billion Euros in 2009. Dividend per share before tax credit 2010 dividend payment date: 5 July 2011 2009 dividend payment date: 12 May 2010 2008 dividend payment date: 7 May 2009 2007 dividend payment date: 23 April 2008 2006 dividend payment date: 4 May 2007 Source: www.carrefour.com Dividend per share (competitors): Where Carrefour shows a sign of stability within the past few years, we can notice important variations in the dividend per share offered by Walmart to its shareholders. [...]

[...] Debts have decreased throughout the past few years. Therefore we can conclude that “Carrefour” has started a reduction of the debt policy in spite of the economic context at the moment. That is for all of these reasons that the net debt is lower than equity and has been decreasing in the past 3 years. The conclusions that can be drawn from this analyse are that the company is trying to reduce their debts in order to be able to rely on their equity rather than on their long-term debt in this time of economic instability, Carrefour tries to rely on what they already have financially speaking. [...]

[...] Capital Structure The “Carrefour Group” has known a few financial problems these past few years, however it is still the second biggest supermarket brand worldwide; but sales in hypermarkets have dropped these past few years making it harder for “Carrefour” not to struggle. Indeed in 2008 the Hailey Family decided to sell all of their shares, resulting in a drop of the “Carrefour share” on the market since then. Therefore we can say that “Carrefour” is in a maturity phase. Carrefour's assets are divided in two current and non-current. Non- current one's have the biggest proportion such as goodwill, buildings and equipments. [...]