BILLABONG Samantha Mowatt ACG

Executive Summary Over the past year there has been an overall increase in Billabong industries with record highs in sales. This was a good year for Billabong stockholders and Billabong representatives plan to make the success long-term. Over the past year there has been an overall increase in Billabong industries with record highs in sales. This was a good year for Billabong stockholders and Billabong representatives plan to make the success long-term. Billabong Biz : Behind the brand Billabong Biz : Behind the brand

Part A. Introduction Derek O’Neill was appointed Chief Executive Officer effective January 1, 2003 Derek O’Neill was appointed Chief Executive Officer effective January 1, 2003 Home Location: 1 Billabong Home Location: 1 Billabong Burleigh Heads QLD 4220 Burleigh Heads QLD 4220 AUSTRALIA AUSTRALIA Year ended June 30, 2006 Year ended June 30, 2006 Billabong is a board sport-oriented business with it’s core business in the marketing, distribution, retailing, and wholesaling of apparel, footwear, accessories, eyewear, and hard goods under the Billabong, element, Von Zipper, Honolua Surf Company, Kustom, Palmers Surf, and Nixon Brands Billabong is a board sport-oriented business with it’s core business in the marketing, distribution, retailing, and wholesaling of apparel, footwear, accessories, eyewear, and hard goods under the Billabong, element, Von Zipper, Honolua Surf Company, Kustom, Palmers Surf, and Nixon Brands The majority of revenue generated is in Australia, North America, Europe, Japan, New Zealand, and South America The majority of revenue generated is in Australia, North America, Europe, Japan, New Zealand, and South America

Audit Report PricewaterhouseCoopers Chartered Accountants PricewaterhouseCoopers Chartered Accountants 1 Eagle Street Brisbane QLD 4000 AUSTRALIA

Stock Market Information Most recent price of Billabong’s stock is $14.24 Most recent price of Billabong’s stock is $14.24 Trading range of June 30, 2005 thru June 30, 2006 Trading range of June 30, 2005 thru June 30, cents per fully paid share 23.5 cents per fully paid share Above information dated October 11, 2005 Above information dated October 11, 2005 In my opinion stockholders should sell shares because the season is changing and even though 2006 was a successful year, Billabong’s sales are highest during the warmer seasons. In my opinion stockholders should sell shares because the season is changing and even though 2006 was a successful year, Billabong’s sales are highest during the warmer seasons.

Industry Situation and Company Plans In the future outlook Billabong representatives plan to increase the industry on a more long-term basis. In addition, improvements in European, as well as, worldwide sale is also a goal. In the future outlook Billabong representatives plan to increase the industry on a more long-term basis. In addition, improvements in European, as well as, worldwide sale is also a goal.

Income Statement Single-step format Single-step format 2006$ $000 Gross Profit 212,949183,659 Income from operations 1,027,832848,430 Net income 145,659125,232 There was a steady increase from 2005 to 2006

Balance Sheet Assets=Liabilities+ Stockholders’ Equity 20061,257,732545,609712, ,938300,604637,334 Total assets in 2006 increased from 2005; however, there was also a substantial increase in total liabilities

Accounting Policies Executives plan to increase liabilities; however, in the end these liabilities will show for further profits Executives plan to increase liabilities; however, in the end these liabilities will show for further profits In the financial statements, the issues of liabilities are definitely a concern In the financial statements, the issues of liabilities are definitely a concern

Financial Analysis Liquidity Ratios Working Capital $ $ Current Ratio Receivable Turnover Avg. days’ sales uncollected Inventory Turnover Avg. days’ inventory on hand

Financial Analysis Profitability Ratios Profit Margin 14.2%14.9% Asset Turnover.23 times 1.32 times Return on assets 6.0%3.2% Return on equity 99.6%82.1%

Financial Analysis Solvency Ratios Debt to equity 25.4%21.4%

Financial Analysis Market Strength Ratios Price/earnings per share 70.8 cents 61.0 cents Dividend yield