Financial Analysis: British American Tobacco Plc - Case Study Example

The paper "Financial Analysis: British American Tobacco Plc" is a wonderful example of a case study on finance and accounting. The following report reflects the financial analysis of British American Tobacco (BAT) a leading tobacco company that operates in the consumer goods sector in the cigarettes industry. The report aims to give a detailed financial analysis of the company and how British American Tobacco has performed over the years. A different approach for the financial analysis has been adopted rather than using the previous five years data; analysis has been extended to the past decade keeping the intervals of 5 years and comparing the data of financial years 2012, 2007, and 2003.

The three years selected do provide the reflection of performance in the past decade and how the company has evolved over that period. It is understood that industry in which BAT operates has gone through some changes and evolved in the past decade thus these three years selected along with the financial performance would also give an idea about the evolution of the market and how BAT has responded, reacted, contributed, and adapted to the changes. It would not just be the interval of 5 years they are three different eras of the industry as five years is an ample period that would transform an industry and make an impact on its trends thus different aspects and scenarios are being discussed and analyzed.

The analysis is based on financial ratios more specifically liquidity ratios, profitability, gearing, and market ratios. Besides the comparison of the performance of the past decade, British American Tobacco is also being compared to its industry that would give a better idea of how well or worse it has performed compared to its direct competitors. British American Tobacco is a dominant company in its industry and has a strong market presence over the world and has multiple brands of cigarettes under its name.

British American Tobacco is not the market leader however is the second largest company in its industry. The financial analysis of the company gives an idea about the financial position of the company and allows make the recommendation regarding the preferable mode of finance for the company.