Analysis of the Fed Rate and Statement of Profit or Loss
The part would conduct a study on the two head companies in the fast fashion industry from the period between quarter two of 2018 and quarter two of 2019. From figure fFigure F, it could be found that the federal rate iswas continuously increasing during the period. In respect to figure gFigure G, both companies indicate the similar direction of the change in terms of percentage of the stock price changed. They grew at the first beginning, then fell, and climbed up again. H&M and Zara were sharply dropped down from quarter four of 2018 to quarter one of 2019 and from quarter three of 2018 to quarter four of 2018 separately. Besides, regarding figure hFigure H, it is obvious that the companies’ gross margin is weaving. Overall, the growth of the federal fund rate will eventually lead to fluctuation in companies' stock prices changedchanges and gross margin. Thereby, the stock price and itsthe financial performance of the fast fashion industry becomes unstable due to the upward federal fund rate.
Figure h showedH shows the gross margin has dropped sharply in the quarter 3three of 2018 and the quarter 1one of 2019, while the gross margin hasclearly increased clearly in the quarter 4four of 2018 and the quarter 2two of 2019. As foreseen from the above part, the imposementimposition of the tariff will lower the industry’s profit. However, only the data of quarter 3three of 2018 has proved thethis assumption. Thus, the U.S.-China trade war did not much affect much the profit of the fast fashion industry.
For the debt ratio shown by the figure iFigure I, both corporations slowly decreased from the fourth quarter of 2018 to the first quarter of 2019 as the ratio of total debt to total assets is lower. ItThis indicates that companies have less proportion of debt due to the increasing federal fund rate.