Uniqlo/J.Crew-Private Equity

Question 1

PRIVATE EQUITY

Answer 1

-COMPANY OWNERSHIP BY A SPECIALIZED INVESTMENT FIRM
capital not noted on public exchange
-Composed of funds and investors that directly invest in private companies or engage in buyouts of public companies (resulting in the delisting of public equity).
-Institutional and retail investors provide capital for private equity and that capital can be used to fund new technology.
-Make acquisitions, expand working capital, and bolster and solidify a balance sheet.
-Investment firms can garner substantial income even when target company continues to struggle.

Question 2

DELISTING

Answer 2

• The process by which a listed security is removed from the exchange on which it trades.
• A company can voluntarily ask to be delisted, this is to become privately traded, not listed on a major stock exchange like New York Stock Exchange or NASDAQ.

Question 3

INSTITUTIONAL INVESTOR

Answer 3

• Nonbank person or organization that invests on behalf of its members.
  (i. e. endowment funds, commercial banks, mutual funds, hedge funds)

Question 4

ACCREDITED INVESTOR

Answer 4

• Those investors whose level of financial sophistication (income, net worth, asset size, governance status or professional experience) warrants a reduced need for protection.
• Can deal with securities not registered with financial authorities.

Question 5

IPO [INITIAL PUBLIC OFFERING]

Answer 5

-The first time that the stock of a private company is offered to public.

Question 6

BOUTIQUE

Answer 6

• A small financial firm that provides specialized services for a particular segment of the market.
• Most common in the investment management or investment banking industries.
• May specialize by industry, client asset size, banking transaction type, or other factors to address a market not well addressed by larger firms.

Question 7

MASS MARKET RETAILER

Answer 7

• Sells affordably priced products that appeal to a wide variety of consumers.
• Not known for high quality products or exceptional customer service.
• They often meet customers’ wants and needs at reasonable prices.

Question 8

SUPPLY CHAIN

Answer 8

• Network between company and its suppliers to produce and distribute a specific product and the supply chain represents the steps it takes to get product or service to customers.
• Supply chain management is a crucial process because an optimized supply chain results in lower costs and faster production cycle.

Question 9

LOGISTICS

Answer 9

• How resources are acquired, stored, transported, to final destination.
• Transportation of goods, and is thus only one part of the supply chain.

Question 10

ASSORTMENT STRATEGY

Answer 10

• Number and type of products displayed by retailers for purchase by consumers.
• 2 major components of an assortment strategy are the depths of products offered (how many variations of a particular product a store carries) and the width of product variety (how many different types of product a store carries).

Question 11

PRICE-EARNINGS RATIO
[PRICE MULTIPLE
EARNINGS MULTIPLE]

Answer 11

• Price-earnings ratio (P/E) is the ratio for valuing a company that measures its current share price relative to its per-share earnings.
• How much investors are willing to pay per dollar of earnings

current price of stock/company’s earnings per share

-P/E ratio indicates dollar amount an investor can expect to invest in a company in order to receive one dollar of that company’s earnings.

Question 12

EARNINGS PER SHARE

Answer 12

• Is the portion of a company’s profit allocated to each outstanding share of a common stock.
• Earnings per share serves as an indicator of a company’s profitability
• EPS= net income - dividends on preferred/average outstanding shares