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In: Computers and Technology

Submitted By kavisahjal
Words 1991
Pages 8
Case Analysis on Playboy Enterprises
Playboy Enterprises was founded in 1953 by Hugh Hefner to manage the publication and distribution of the Playboy magazine. The company has experienced tremendous growth since its inception and currently boasts of three segments:
1). Publishing-which is in charge of the business aspect of the Playboy magazine,
2). Entertainment- which manages the electronic assets of Playboy Enterprises. This includes the open source software, the Spice Network, the playboy website and the production of the adult videos.
3). Licensing- this oversees the licensing of the Playboy name and its logo to third parties.
Playboy Enterprises is one of the major players in the adult entertainment industry and has had good financial performance as compared to the industry average. This trend has however reversed in recent years with the company reporting losses which have led to speculation on its going concern status particularly due to the fact that it is a public listed company. In the 2008 fiscal year, the company reported a net loss of $156.1 million which was a significant drop in profitability as compared to the $4.9 million profit realized in the 2007 financial year (Reuters UK, 2009). As shown in the table below.
Table 1: Hoovers (2009) Playboy Financial Results
Playboy Enterprises Annual Income Statements (2006-2008)
(All amounts are in millions of US Dollars) Financial Year | Revenue | Gross Profit | Operating Income | Total Net Income | Diluted Earnings Per Share – EPS | 2008 | 292.1 | 55.8 | (157.7) | (156.1) | (4.69) | 2007 | 339.8 | 76.0 | 10.0 | 4.9 | 0.15 | 2006 | 331.1 | 68.9 | 9.1 | 2.3 | 0.0 | The current financial performance of Playboy can be evaluated by looking at the internal as well as the external factors. This involves looking at its internal capabilities including its strength and weaknesses and the…...

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