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Sustainability of the Clients Investments - Assignment Example
For one of the pension fund clients which is a minority shareholder in Toops Tiles PLC, I have prepared this brief with relevant information on the medium/long term sustainability of the client's investments.
Toops Tiles PLC is Britain's largest tile and wood flooring specialist group…
The company's broad product line is comprised of wall and floor tiles, natural stone, and laminate and solid wood flooring. Toops Tiles also offers underfloor heating, tools, adhesives, grouts, accessories, and cleaning products to complement the major product lines. These additional offerings enable each customer to finish any job involving tile installation.
Through this memo, the medium and long term sustainability of Toops Tiles PLC will be assessed through an analysis of its financial statements. I will also provide a SWOT analysis to get a deeper insight on the company's internal performance and external environment.
Table 1 shows a two-year comparative report on the Toops Tiles PLC's major accounts. During the fiscal year 2005, the company recorded total sales of 175.64 million compared to the previous years' 159.43 million. It can be noted that the company's revenue ballooned by 10% despite the weak consumer environment in the United Kingdom. Profit before taxes also leaped by 16% to 39, 232 and net income totaled 30, 189. Toops Tiles' resources also expanded by almost 3% which is due to the growth in tangible fixed asset, and short term receivables. The company was able to pay off a huge portion of its debts as evidenced by the 6.15% drop in total liabilities. Toops Tiles' preference for low risk financing is also indicated by the growth in equity by 17.10% (Annual Report 2005).
As a minority shareho ...