Operating Performance of the UK Food Industry - Term Paper Example

The paper "Operating Performance of the UK Food Industry" is a brilliant example of a term paper on finance and accounting. The food industry can be portrayed as the most complicated collection of businesses that are operating globally. It mainly aims at supplying food energy to consumers, who form the world population. The food industry had encountered huge fluctuations in demand and supply over few decades due to various macro-economic factors. This situation is the same all over the world.

The consumption of food is affected by rising or fall in disposable income as well as by fluctuations in food prices. In United Kingdom (UK), the food industry has shown resilience after the economic downturn, where the agricultural food sector has contributed about £ 96.1 billion per year (according to government announcements) (Department of Environment Food and Rural Affairs, 2012). The figure reflects that the sector generated 7.3% of gross value added (GVA) in 2011, which has increased by 7.8% from the previous year in 2010 (Spray, 2013).

The report highlights the operating performance of the UK food industry by employing theories like PEST analysis, SWOT analysis, and Porter’s Five Forces. The financial performance of this industry is determined by considering three renowned companies; Associated British Foods Plc, Devro Plc, and Greencore Group Plc. Ratio analysis is the best method to evaluate the financial condition of these companies, which reflected the overall picture of the food industry in the UK.  

2.0 Rationale for industry choice

During 1990, technological and policy developments had led to vast transitions in consumption patterns in the food industry. The business had become increasingly automated and globalized owing to several mergers and acquisitions that took place worldwide.

The stronger players grew larger and others turned competent and more dominant. The rationale for choosing this industry is its importance and complex structure. Food Statistics Pocketbook indicated that in 2012, average residents of the UK had spent about 11.3% of disposable income on food consumption. However, it is also noticed that about 20% of the lowest income group have spent about 16.6% of their income for food purposes (National Statistics, 2012; Department of Environment Food and Rural Affairs, 2012).