Abstract
This paper aims at analyzing financial performances of retail industries prone to seasonality in sales. Specifically for the Brazilian economy, three sectors had their seasonal variation pattern identified, namely: 1) hyper- and supermarkets; 2) textile, clothing, and footwear; and 3) furniture, and household appliance. Results point out a stable sales pattern in supermarket sector in comparison to the other sectors, which have peak-and-valley patterns. Subsequently, a discriminant analysis was performed to find out differences among financial indices of Brazilian companies, according to their sales patterns. According to analysis of financial ratios, companies with higher seasonal variation performed significantly better in terms of cash ratio and return on equity, whereas the other indices, debt ratio and assets turnover, account for no statistically significant differences. Building on discriminant analysis, cash ratio was found to be the most important index for discrimination.
Highlights
Retail industry growth is a common event in developed economies
From the other two indices, real net sales had only a 52.82% increment, rising from R$824,145,294 in 1996 to R$1,259,481,956 in 2007. This data set brings to view the actual importance of retail industry to the Brazilian economy
This study aims at assessing the relationship between seasonality in sales and financial performance
Summary
Retail industry growth is a common event in developed economies. The number of direct jobs available within retail industry increased 73.40% (from 4,843,131 in 1996 to 8,397,948 in 2007), which stands for a meaningful growth in comparison to the general Brazilian workplace, with high rates of unemployment. From the other two indices, real net sales had only a 52.82% increment, rising from R$824,145,294 in 1996 to R$1,259,481,956 in 2007. This data set brings to view the actual importance of retail industry to the Brazilian economy
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