Recruitment Plans in IKEA


Human, physical, scientific and money are at the core of each organisation. The efficient management of these resources permit organisations to achieve their aims. Also, for an organisation to endure, its finances have to be acoustics and secure, and the amount of an organisation's performance can be seen in its financial claims. An unhealthy management of resources can have a negative effect on an organisation's performance.

You just been appointed as HR supervisor of newly opened IKEA in London and in your role, you have to recruit 7 sales assistants, carry out the following duties with regards to the above

1. Describe the recruitment documents used in Ikea.

2. Describe the main employability, personal and communication skills required when applying for the job role of Sales Assistant in Ikea.

3. Describe the primary physical and technological resources required in the operation of Ikea.

4. Describe resources of internal and exterior finance for the business enterprise of Ikea

5. Interpret the material of the trading and profit and loss consideration and balance sheet for Ikea

6. Illustrate the use of budgets as a means of performing exercises financial control of Ikea.

7. Illustrate the financial talk about of Ikea.

Summary of the machine:

Business resources encompass different kinds of resources like human resources, financial, technical and physical. Proper human resources team may bring a good result in reaching a company's objective and success. In terms of financial management and financial control, is playing an important role in creating a company. Besides this, business plan will help and guide to where a company should go in present and in future. Overall, a good combination of business resources provides success for just about any establishment of business.

Introduction and Record of the company, companies or businesses: - IKEA


IKEA is a private and known home furnishing company. And yes it is an international home products merchant that sells level load up furniture, accessories and kitchen items in their shops around the world. Mainly this company is pioneer in smooth load up design furniture at affordable prices, is currently the world's largest furniture retailer. You will find main chains of IKEA. The chain has 301 stores in 37 countries, most of them in Europe, THE UNITED STATES, Asia and Australia.


IKEA was founded in 1943 by 17 year old Ingvar Kamprad in Sweden and it is owned with a Dutch registered basis managed by the Kamprad family. The name IKEA originates from the initials of Ingvar Kamprad, I and K, in addition to the first words of Elmtaryd and Agunnaryd, which will be the titles of the farm and town where he was raised.

The headquarters of IKEA is Netherlands. IKEA owns and manages 384 stores in 48 countries.

IKEA's mission, perspective and purposes:

IKEA's main love to work hard to attain quality at affordable prices for the clients through optimising the complete value chain, by building long-term supplier relationships, investing in highly automated creation and producing large amounts. The eyesight of IKEA also goes beyond home furnishing. They want to create an improved thing for everyone from this business.


IKEA's objective is to offer an array of home furnishing items of good design and function, excellent quality and resilience, at prices so low that the majority of people can afford to get them.


The IKEA vision is the foundation for its progress strategy. "to produce a better everyday life for the many people. " To meet this eye-sight IKEA provides many well designed and functional product for the house.


IKEA's business strategy targets growth in three main areas
  • Quality products at low prices through its unique design processes
  • A sustainable future through its people and globe positive approach
  • Also co-workers are essential in growth strategy
Size of Business

In the IKEA Group, they have got 328 stores in 28 countries (as of 31 August, 2015). Products range is about 9500. Around 1, 002 home furnishing suppliers in 51 countries. 59% of IKEA creation is in European countries. Only in European countries there are 222 stores.

Excluding the stores, by the end of FY15 that they had 27 Trading Service Offices in 23 countries, 33 Distribution Centres and 15 Customer Circulation Centres in 17 counattempts, and 43 IKEA Industry expertduction units in 11 countries.

Corporate Framework:

The IKEA corporate and business structure is split into two main parts: functions and franchising. The majority of IKEA's furniture, including the management of bulk stores, the design and manufacture, purchasing and supply functions are overseen by INGKA holdings. Group franchises the IKEA retail system from Inter IKEA Systems B. V. in the Netherlands. Inter IKEA Systems B. V. is the owner of the IKEA Idea and the worldwide IKEA franchisor.

The IKEA Group of companies (INGKA Holding B. V. and its controlled entities) comes with an ownership framework that ensures freedom and a long-term strategy.

The IKEA Group performs throughout the whole value chain from range strategy and product development to development, circulation and retails.

IKEA Band of companies


The key stakeholders in a business impacted positive or negatively. As IKEA is not really a primary sector business but it requires raw materials to build up its products. Hence main sector suppliers, supplier for extra sector will be the stakeholders of IKEA. The main element stakeholder's of IKEA will be the customers and employees, both are considered main stakeholders. Besides this, suppliers, inside employees, trade union, managers, owners, shareholders play an important role.

Type of ownership

IKEA is truly a privately placed company owned or operated by Stichting INGKA Basis, a non-profit registered in Leiden in the Netherlands that is managed by the Kamprad's three sons. IKEA Limited is licensed to sell under the IKEA brand by Inter IKEA Systems B. V. , a business registered in holland.

IKEA's Company Structure

The composition of business make a difference the way it works and functions. An organisational composition is when employees are grouped into useful areas, which relate to their job, so that folks doing similar jobs work in the same area.

Inter IKEA Group (Inter IKEA Keeping B. V. and all its subsidiaries) is owned by Interogo Groundwork, located in Liechtenstein and set up in 1989.

The foundation can be an 3rd party entity with legal personality and its own governing bodies. The building blocks is out there for an endless time frame.

Inter IKEA and Interogo were set up through the 1980s to secure independence and longevity of the IKEA Principle. The IKEA Idea is the core asset of Inter IKEA Group and its own franchisor operation. The entire purpose of Inter IKEA Group is to secure ongoing improvement, development, extension and an extended life of the IKEA Concept. This will require assets in both good and bad times.

1. Describe the recruitment paperwork used in Ikea.

There are different types of documentation used in recruitment process, such as request notice, form, CV, person specification, interview, JD, Letter of visit.

The details are the following

Application Letter

A notice of application, also known as cover letter, is a job application record to provide complete information of the candidate. The employers will able to know in which position a prospect apply for and why the employer will select the candidate. When writing an application letter will include: subject matter, greetings, body of notice and personal.

Application Form

An form can be an essential part of the job visit a candidate to fill up for the company so that they can get the information they want. In addition, many large commercial companies are use standard job application form because they are much quicker and time keeping.

CV of any candidate

A curriculum vita is a written summary of someone's experience and other qualifications. Businesses use applications and CVs to see whether an applicant matches the work standards or not. The closest matching people are asked to interviews in the selection stage.


Interviews are the most popular form of selection. Interview can be one-to-one, two-to-one or a -panel of men and women to interview people which is utilized to choose people for important careers. Some businesses include tests in their selection.

Person specification:

The person standards is the one most important file in effective recruitment and selection.

It allows defining the type of person an organization want therefore accordingly helps you to write a precise job advertisement. It enables to assess each candidate pretty and objectively.

Recruitment process of IKEA

The traditional methods of job vacancies are to make people alert to the need to contend with the recruitment web-based systems. Traditional methods: publication advertising, paper-based cv (CV), letter, word of mouth, the paper-based form, job opportunities and the reasonable poster. Internet-based methods: online form, online Curriculum Vitae, e-mail, Advertising on the internet, CV information on the web page, the net webpage of the working group and the pop-up Web page.

Online Recruitment is a lot faster than traditional methods and has a number of benefits over using newspaper. You'll be able to monitor how many people have absent on to an online site to look at a job.

But each and every company has followed its recruitment process. IKEA's recruitment process operates like following. To begin with if anybody is enthusiastic about working in IKEA, he/she must go through a list of open up positions. If any post are appropriate or challenging and furthermore if he/she meet the requirements, apply with a button directly in an advertisement. When there is no open up position interesting for a person but want to work in IKEA, send the CV to IKEA.

IKEA gives an e-mail answer about obtaining the need or CV in both situations. Then IKEA management will examine sent applications then and choose from candidates several most suitable candidates for this job position. From then on a formal invitation delivered to the individuals via e-mail or phone to participate in a range process.

How a range process runs

Selection process usually consists of three rounds. First of them is examination centre, second the first is an individual interview with a future administrator and third the first is a personal interview with a manager of this manager.

  1. Assessment centre

Assessment centre is a way to know more about their future fellow workers when they are fixing different responsibilities and consult with others. You can find about 10 people engaging. Both group responsibilities which a person will solve together with other members and individual jobs are included. The fantastic advantage is that prospect can get a opinions in one of the assessors if he/she would like to. They are able to find out about their own talents and weaknesses important for the career, where in fact the advantage is for a applicant and where they can improve.

  1. Second round

Two or three individuals who pass to the second round are chosen predicated on the diagnosis centre results. The next round is a personal interview with a future administrator. Usually IKEA employees do not ask confusing questions. They appreciate the most applicants' honesty. They could ask to complete a personal test as part of the interview. If you wish to ask anything about the near future job, this is the right time to ask.

3. Personal interview

The third circular is an individual interview between your most suitable prospect and the employer of the person's future administrator, so called grandparent principle. IKEA are also enthusiastic about a candidate's inspiration to work in IKEA in this phase and what expectation he/she has.

JOB ROLE: HR Manager

As a HR Director I need to set some conditions regarding the scope of work within the organisation.

IKEA always look for the next things in just a candidate and therefore they concern job description. This is a task of any HR director.

The administrator should be aligned with other departments through the procedure for recruitment.

  • Practical skills
  • Ability to understand and be friends with other people
  • Ability to ask questions and give inputs
  • Encouraged employees to question the management and share their ideas and belief
  • Co-workers who possessed learned their current jobs were encouraged to seek new challenges
  • Job enlargement or enrichment
  • Value fit was the choice criteria
  • 'Why Savers'- suggestions to improve store
  • The company even provided an advertisement welcoming 'Why Savers' to join the company
  • 'Express Yourself'- show companies concerns and claims with Spiers Lopez
  • This increased the morale within the business as she responded to their problems personally
  • It had a thorough communications system for employees like IKEA Radio and intranet.
  • It also come to employees through printed materials as well

Job description:

This document provides an understanding of the position's major duties, details how the responsibilities are achieved, and identifies the knowledge, skills and talents essential to perform the job. In the business a job description pieces out the range of work of the primary responsibilities and the primary tasks to be done.

A job description is needed to lay out how to fit into the work structure a specific employee. So it sets out
  • The title of the job
  • To whom the staff is responsible
  • For whom the staff is responsible

2. Describe the primary employability, personal and communication skills required when trying to get the job role of Sales Helper in Ikea.

IKEA is an equal opportunity company. IKEA will not discriminate in recruitment, selecting or conditions or conditions of work based on race, spiritual creed, colour, years, sex, gender identification, genetic information, erotic orientation, national origins, religion, marital position, medical condition, physical or mental impairment, military service, being pregnant, childbirth and related medical conditions, or any other classification guarded by federal, talk about, and local laws and ordinances.

  • IKEA called all its employees, regardless of get ranking, "coworkers".
  • To promote wide open communication, IKEA adopted a structure with no hierarchical distinctions.
  • Employees were encouraged to express their opinions and ideas directly to the most notable management.
  • Employees were rewarded with higher level of empowerment.
  • Cost awareness was deeply inlayed in IKEA's culture.
  • IKEA's culture marketed diversity.
  • Openness to change and adaptability were pressured at IKEA.
  • Week-long orientation program in Sweden on the "IKEA WAY"

An IKEA co-worker's main process is to increase sales and success in his/her part of responsibility using knowledge of the IKEA product range, local market conditions and the needs of customers.

Candidate employability skills required when applying for the work role of Sales Associate in Ikea include:

  • Suitable qualification and experience in same role which really helps to take full advantage of sales and profitability by ensuring section of responsibility.
  • Knowledge of product or services are necessary for the work role of Sales Associate in Ikeato supply the company best sales performance.
  • Need to talk about knowledge with customers and fellow workers.
  • Experience of specific industry will help to provide best source for a company
  • Preparing section of responsibility for stock replenishment and next day's business.
  • Ability to observe and increase professional standards of creation/service delivery.

Candidate personal and professional skills required when trying to get the job role of Sales Helper in Ikea include:

  • Patience and hardworking are the key elements in sales career.
  • Self-confidence about getting close to and talking to people in a polite and friendly manner.
  • Able to work with others in a team.
  • Flexible method of work and are open to change.
  • Should have an interest in home furnishing and people's everyday activity at home.
  • Ability to priorities and plan assigned work to make successful use of time.
  • Negotiation skills in sales work enhance the development in career
  • Agreed with the sales goal is a representation of confidence
  • Able to resolving conflicts

3. Describe the primary physical and technological resources required in the operation of Ikea.

Physical Resources

Physical and technological resources are always required in the procedure of the company. Whether these resources are physical resources, such as property, equipment and materials, or less tangible human resources, emergency provision, insurance and security, money is required to purchase their use.

As a result, the management of finance is inseparable from the management of the business enterprise as a whole.

Land, Labour, Capital and Venture are also referred to as the Factors of creation.

Physical resources of IKEA include machines which are used to complete the stock in self-serve and full serve areas are checked out and priced daily.

Physical Resources found in IKEA include:

  • Buildings and Facilities

IKEA has broadened its product platform to add flat-pack houses and apartments, in order to cut prices involved with a first-time buyer's home. The IKEA product, named BoKlok was launched in Sweden in 1996 in a jv with Skanska. Now working in the Nordic countries and in the UK, sites affirmed in Britain include London, Ashton-under-Lyne, Leeds, Gateshead, Warrington and Liverpool.

The Ikea store on Yas Island will have a total floor part of 32, 000 square meters and a sales portion of 19, 150 square meters.

It will have a restaurant of 2, 100 rectangular meters with a seating capacity of 550, as well as 1, 500 auto parking places. Yas Island store are providing a solid impetus for the Swedish furniture and Furnishings Company to press ahead with strategies to expand in the region.

  • Materials and Waste

IKEA will need to ensure that all of these stores hold the right amount with their products in the store to maintain with the demand of the customers buying them. Within the warehouse, IKEA will require to make certain they have the materials stored in a format where they are easily accessible so they can be made into the products being sold. IKEA needs to eliminate their waste and for that reason may ask the government to help them with this.

  • Plant and Equipment:

Physical resources of IKEA like machines which are being used to fill up the stock in self-serve and full serve areas are examined and costed daily. The machines, building and creation capacity are well looked after to survive in retail business. They need to improve on POS terminal at exchange and comes back where there have been conditions of money laundering. Employees have stolen money and found after many days. So these exact things need to be looked after from the management and money department. This causes decrease in earnings.

IKEA Dubai has more than 300 employees from different nationalities and regularly they are given training in their training centre. Expert professors and managers give them training to increase worker understanding of products and increase skills at their work.

  • Equipment including ICT

IKEA's IT facility is related with the other resources within and outside this company. The company is likely to launch a new website, ikeabusiness. com, where small enterprises can discover new ideas for building their office buildings and show them with other business owners. Households can design their kitchens at IKEA Home planning service where once they design their kitchen they need to pay 500Dhs kitchen charges which is refundable after the customer buys your kitchen.

  • Planned Maintenance and Refurbishment

Important feature of IKEA stores is their long opening time. Many stores are in procedure 24 hours a day with restocking and maintenance being completed throughout the night time. Warehouse retained in planned way.

  • Emergency Provision

IKEA have crisis provision in case of a major accident and incident. Employees may have an emergency situation in that case after verification, documents provide to IKEA.

  • Insurance

The folks who are engaged with IKEA FAMILY, they can enjoy free product insurance center. They can make sure their services against accidental harm along the way home and during assembly by swiping the IKEA family cards at the check outs.

  • Security

IKEA use the latest security technology to encrypt all personal information which a person submits through the IKEA's website, including credit card quantities, address and other information. They encrypt these details using SSL technology which allows it to be sent securely over the Internet without other people having access to it.

The machines, building and development capacity are well managed to survive in retail business. At IKEA, they would like to have an optimistic effect on people and the planet. That's why they're going all-in on things that really matter, from switching their entire light range to energy-efficient LED to sourcing every one of the cotton they use in their products from more sustainable sources.

They are also working towards 100% alternative energy - producing around they ingest in their businesses - and sourcing all of their timber from more ecological options by 2020. Along with the IKEA Group and IKEA Groundwork have made new commitments that soon add up to $1 billion for weather action.

IKEA resources can be categorised tangible and intangible.

The tangible resources available to the company IKEA, they could are different in Physical and Financial.

Within the physical resources, find machinery, which is seen as a modern and specific. Second, they have circulation centres, that are computerized and computerized hierarchical systems, and lastly they may have additional shops and services which have standard models, in which they will get special services such as restaurant, day-care and car parking.

Concerning money, they may have used Reinvestment in IKEA as an integral resource.

There are two types of intangible resources, real human and non-human, as nonhuman, can point out the technology, they find patents based on the structure of materials.

Another thing is that IKEA has a unique company culture, because the vision, mission and values can be found in every business process, plus gross annual management meetings are held to improve all business activities.

Finally they find organisational resources, that happen to be business ideas.

Regarding real human intangible resources, they can cover in this area to permanent employees, average wages and high requirements of the company.

Technological resources include operation systems and tools required to effectively produce or create a product or service. Included in these are energy, information, people, tools, machines, capital and time. Technological resources help production procedures and service delivery in companies and organizations.

The main Technological resources required in the procedure of Ikea are the following
  • intellectual property, for example designs, drawings, wording, music, video
Having the right type of intellectual property coverage helps visitors to stop anybody stealing or replicating
  • the names of products or brands
  • inventions
  • the design or look of the products
  • things the business write, make or produce

Copyright, patents, designs and trademarks are all types of intellectual property protection. So IKEA have their own design, attracting because of their furniture.

  • accumulated experience and skills;

The gathered experience is what folks have gained over many years of working. Employees with an increase of experience are likely to much better than new employees. Also there must be enough people with the skills to handle the operations in the business.

At IKEA they believe in people. Behind every product are humble, enthusiastic teams which make it possible. They provide exceptional career and learning options. They encourage a person to try different assignments, change between functions and even move in foreign countries. An individual can design their own profession path according to their development plan and future goals. IKEA have confidence in everyone's ability to build up. Because as a person grow, IKEA expands too.

  • software licences

There a wide range of businesses that they have to invest their money into specialists software programs in order to operate properly. They may have their own software module which involves various software and materials that the intellectual property protection under the law are vested in companies in the IKEA group.

  • protection via patents and copyrights

IKEA may use their money to protect their technical resources, however they can also use legislation to protect their ideas they have come up with and they'll have to be able to establish that their idea has been utilised without permission.

4. Describe resources of internal and external finance for the business enterprise of Ikea

Mainly IKEA is a privately owned or operated company, hence they are not bound to reveal their financial information by means of GPFR's - i. e. balance bed linens and P&L claims. Therefore they only disclosed limited amount of information to the public.

Objectives of financial management

- profitability, progress, efficiency, liquidity, solvency

- short-term and long-term

These objectives continue to be constant for every business and because of the character of IKEA efficiency is a significant major element of their management strategy.

Also as IKEA is privately run and Ingvar Kamprad is one of the wealthiest men (presently 4th richest) on earth then it could be easily seen that come back on collateral is a significant financial target.

  • Inter dependence with other key business function They may have their own software module with Affects on financial management
  • Internal resources of finance - maintained profits
  • External sources of finance
  • Debt: short-term borrowing (overdraft, commercial bills, factoring), long-term borrowing (mortgage loan, debentures, unsecured records, leasing)
  • Equity - ordinary shares (new issues, protection under the law issues, placements, share purchase ideas), private equity
  • Internal - owners' equity, retained profits

Internal options would be used by IKEA to a certain degree in particular retained profits. As IKEA is not really a publicly detailed company and is also operated by having a trust structure, share issue is not particularly highly relevant to IKEA's current financial structure

- exterior - short-term borrowing, (overdraft, loan company expenses), long-term borrowing (mortgage loan, debentures) leasing, factoring, venture capital, grants or loans.

External borrowings through arrears financing are much more likely to be utilized by IKEA. The blend of short and permanent would be used to maximize advantages to IKEA.

  • Financial institutions - banks, investment banks, boat loan companies, superannuation funds, life insurance companies, unit trusts and the Australian Securities Exchange
  • Influence of administration - Australian Securities and Investments Commission rate, company taxation.
  • Global market affects - economic outlook, availability of cash, interest rates

5. Interpret the contents of the trading and income and loss account and balance sheet for Ikea.

IKEA produces the financial record each year because of their company. These statement is seem as company statement. You can find two main financial statement
  1. The income and reduction account
  2. The balance sheet

The revenue and loss consideration may be modified regularly and shows how much loss or profit a business is making. A income can be produced in several ways, for example;

  • From trading, in the case of a high street shop, i. e. buying and selling items such as home furniture, like IKEA
  • From processing, for example a corporation like IKEA made affordable prices furniture. It will buy recycleables such as hardwood, bamboo, cane and Jute which really helps to procedures to make furniture.

The top portion of a P&L bank account is recognized as the trading take into account a small business that purchases and sells items e. g. a furniture shop. What's known as the gross earnings is calculated by deducting cost of sales from turnover.

The Balance Sheet

The Balance Sheet is a snapshot considered at a specific moment in time giving a listing of the overall financial position of your business.

Businesses need to use assets to be able to generate riches. Assets will be the things that a business possesses or amounts that are owed to the business at anybody moment in time.

The business obtains the financing for these resources from two main options:

1. Internally (inside the business) from capital elevated from the business owners (the shareholders regarding a corporation).

2. Externally - for example, by means of loans, and other types of finance which will have to be repaid.

Once a company is set up, the business enterprise becomes a legal body in its own right. Internal money (shareholders' funds) is owed to shareholders. External finance is owed to the people beyond your business - liabilities.

In simple conditions The Balance Sheet demonstrates the value of businesses resources is financed by the two groups -

1. Internal (owner's capital)

2. External (liabilities).

A balance sheet typically shows up in a vertical format.

The balance sheet starts off by list all the assets. Next, come the liabilities. Finally, the owners' capital is shown - to balance the total amount sheet.

IKEA financial management helps them monitoring and controlling - cashflow statement, income assertion, balance sheet. The procedure of financial management of IKEA is strong enough to carry a steady business development. T

They plan and put into practice financial needs, the following
  • Budgets
  • Record systems
  • Financial risks
  • Financial controls
  • Cost control by deciding fixed and adjustable cost
  • Cost centres
  • Expense minimization

Fixed property of IKEA mainly consist of their own stores, warehouses, factories and shopping centres. Nearly all possessions are funded with IKEA's own money reflected in group equity of 31. 6 billion. Liabilities of IKEA consist of both long and short -term funding as well as the payables connected with running the business.

6. Illustrate the utilization of budgets as a way of working out financial control of Ikea.

IKEA's philosophy is all about cost clipping. Hence IKEA stay away from waste and placed it whenever you can to the very least.

There are four types of budget are employed mainly in a firm. The details are as follows
  • Group budget - showing the near future surplus, income and costs of the whole organisation (also known as the Expert Budget). For IKEA, this will be presented by Ingka Positioning B. V (operations) and Inter IKEA Systems (franchising).
  • Sales budget - sales income predictions, based on volumes and prices for a given period. This may be produced from projected furniture sales in every the IKEA stores throughout the world as well as sales from the web site.
  • Operations budget - end result costs and customer support targets normally predicated on sales budget requirements. This will include the costs of working the stores, the distribution network, the stock control systems and the suppliers
  • Cash stream budget - a forecast of cash in and out for the whole organisation on the projected.

Benefits of budgeting are as follows:

  • Planning - It can help managers arrange for the near future and co-ordinates organisational activities: e. g. IKEA's product development budget in Sweden.
  • Controlling - It can help managers monitor performance against aims and it offers a way of measuring success and inability (using variance analysis) that business lessons can be learnt, e. g. measuring the sales performance of individual stores against one another.
  • Motivating - It will give the groups and organisational departments a aim for to achieve and responsibility for success o E. g. country supervisor goals for revenue

    - personal debt and equity financing - advantages and disadvantages of each

    - complementing the terms and way to obtain financing to business purpose

However, during FY14, the IKEA Group in total invested 1. 7 billion to get, factories, renewable energy and shopping centres, with nearly all this amount being put in in the retail sector. According to the financial concept of IKEA, ventures were funded with the own cash. Especially the investment funds in renewable energy strongly help to achieve the sustainability targets. During FY14, IKEA focused on invest in blowing wind farms in america and Poland. So, when these projects will be completed, they have 224 windmills in nine countries. The continuation of development of the alternative energy strategy will be going on and moreover, they have got planned significant ventures for FY15.

7. Illustrate the financial status of Ikea.

Financial statements are a picture of the company's financial health for a given period of time at confirmed time. The statements give a assortment of data about a company's financial status.

Financial Performance

Financially, in IKEA total sale performance increased by 5. 9% (when modified for currency impact) to 28. 7 billion in 2014. If it is translated in to the Euro, sales increased by 3. 0%. Similar stores were up 3. 7%. Alongside the local rental income from the shopping centres, the full total revenue stands 29. 3 billion, a 2. 8% increase over FY13. In FY14 we observed growth in every sales programs: existing stores, the opening of new stores and online. IKEA Food had a positive development and exhibited 8. 6% development (fine-tuned for currency impact). Furthermore IKEA Industry, that became a built-in part of IKEA Group this past year, increased their contribution to expansion and the operational result for FY14.

Though the web income of IKEA remained exactly like in FY13, the key reason is the contribution in IKEA's co-worker loyalty programme, (200 million), as well as the growing quantity of co-workers taking part in One IKEA Reward program (98 million). However, altering for these expenses, the overall cost percentage reduced. The gross margin reduced by 0. 4% to 42. 9%. This is expected and is because of bigger price reductions compared to FY13. But the negative effect on margins was partially balanced by lower purchase prices and lower transportation costs. The net financial result of IKEA advanced significantly, supported by favourable rates of interest and money rate activities. But IKEA didn't incur any credit loss on the securities stock portfolio, which risen to 15. 8 billion during FY14.

In FY14, the IKEA Group corporate income tax charge amounted to 801 million. The effective corporate and business income tax rate was 19. 3%, up from 18. 9%. Furthermore, they incurred local and other taxes such as property taxes, business taxes, custom tasks and environmental fees. These taxes amounted to 715 million in FY14. So, in total, the tax charge in FY14 for the IKEA Group amounted to more than 1. 5 billion. Over the last five years (FY10-14), corporate and business income tax and other fees amounted to about 6. 8 billion for the IKEA Group.

Financial status of IKEA

- Liquidity - current percentage (current property · current liabilities)

2014 current ratio 2. 52:1 2013 current percentage 2. 41:1

- Gearing - credit debt to equity percentage (total liabilities · total collateral)

2014 gearing proportion 41. 3% 2013 gearing proportion 44. 6%

- Profitability - gross earnings ratio (gross income · sales); net profit percentage (net earnings · sales); go back on equity ratio (net earnings · total collateral)

2014 Gross earnings ratio 44% 2013 Gross revenue ratio 44%

2014 World wide web Profit percentage 11. 3% 2013 World wide web Profit Ratio 11. 6%

2014 Come back on Owners Collateral Ratio 10. 5% 2013 Come back on Owners Collateral Ratio 11. 4%

- Efficiency - expenditure ratio (total expenses · sales), accounts receivable turnover ratio (sales · accounts receivable)

2014 expenditure ratio 31. 6% 2013 expense proportion 30. 5%

2014 Accounts receivable turnover Ratio 31. 75 times 2013

Additionally, during FY15 the IKEA Group opened 13 new stores and three new Pick-up Things; in Spain, Norway and Finland, where customers can easily see a limited part of the IKEA range and pick up pre-ordered items.


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  2. External way to obtain fund / capital (2011) Offered by: https://www. efinancemanagement. com/sources-of-finance/external-source-of-finance-capital (Accessed: 07 July 2016). In-line Citation:(External source of money / capital, 2011)
  3. http://www. ikea. com/ms/en_GB/this-is-ikea/about-the-ikea-group/index. html
  4. https://ikea. jobs. cz/en/why-ikea/
  5. http://www. ikea. com/ms/en_US/pdf/yearly_summary/ikea-group-yearly-summary-fy14. pdf
  6. http://hscikea. weebly. com/finance. html

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