This report will analyse the financial performance of Wolseley Group and how the group has performed in the last year or so. The report has been divided into three sections; the first section of the report will discuss and analyse how the group has performed in the last three years, the second section of the report will analyse the financial performance of the company using financial ratios of the year 2010 and 2009. The third section of the report will discusses about one of the items in the current assets of the company’s balance sheet, financial receivables. Section 1: Analysing the performance of Wolseley Group Wolseley Group is the leading trade distributor of heating and plumbing products to different professional contractors. The group operates in 25 countries and has more than 4000 branches around the world with more than 47,000 employees working for the Wolseley Group (Wolseley Group, 2011). The financial crisis has made a huge impact on different industries therefore the industries to which the Wolseley Group has been offering its products were affected as well. The demand of the products had reduced considerably around the world and therefore it influenced the sales of the company negatively. One of the most important industries to which the group has been offering its products is the construction industry. The clients of the Wolseley Group include large construction companies, professional contracts, individual contracts etc. However, with the economic crunch, the overall demand of the of construction projects has reduced to a great extent. There have been several factors that have lead to the reduction in the demand of construction industry as currently the economy is suffering with more unemployment and lower credit available, large number of housing inventory remained unsold etc. Therefore all these have resulted in reduction in overall construction in both the commercial as well as the residential sector. The following image reflects different sectors of the group and it can be seen that most of them are directly or indirectly related to the construction industry. (Wolseley Group, 2010) In several countries including United States of America, United Kingdom, Nordic region, France and Central and Eastern European countries, the sales have reduced however only in Canada the sales of the Wolseley Group grew in the year 2010. But the problem is that Canada only contributes 6% of the total sales of the company as it has been shown in the image below. (Wolseley Group, 2010) All in all, the overall performance can be said to have improved as the sales declined by almost 14% in the year 2009 however in 2010 this figure has reduced to 6% and therefore it can be considered as a positive sign for the group. (Wolseley Group, 2010) Section 2: Analysing The Financial Performance Of The Group Using Financial Ratios Financial ratios are used to analyse the financial performance of the company. Financial ratios are used to analyse and compare one company from the other and it is also used to compare the performance of the company with its past performances (Ross, Westerfield, and Jordan, 2009). This section of the report will analyse the compare the financial performance of the company in the year 2009 and 2010 using financial ratios. Different types of financial ratios like the profitability ratios, liquidity ratios and the efficiency ratios are used in this report to analyse the performance of the company in the two years under study. Profitability Ratios Profitability ratios are used to analyse the profitability of the company. The higher the value of the profitability
Financial statements reflect the financial performance of the company usually in a period of one year. …
In the year 2003 there was a 9% accounted for on the GDP (Data monitor, 2003). For the past years the supermarkets in the United Kingdom have been scrutinized keenly on how they treat their supplies, specifically the ones of their own labeling, though strategic supply development networks plays a major role in integration of the strategies of supermarkets for the last ten years.
This paper is aimed at focusing the importance of annual reports and accounts with respect to analyzing the overall company’s performance. The basic tool to do this job is value added framework of accounting which does not only helps in determining the performance level of the company under consideration but it also provides the accountants and financial professionals with a benchmark in the form of a calculated Value added for one company operating in the industry which is then used to analyze the performance of the overall industry.
FINANCIAL STATEMENTS OF JT ENGINEERING FOR THE FINANCIAL YEAR 2012 In addition to the above financial information, it is also important to understand various accounting concepts and principles based on which these financial statements are prepared.Gross profit margin is an analyzing tool which assists in identifying how effectively and efficiently the company is utilizing its raw materials, variable cost related to labor and fixed costs such as rent and depreciation of property plant and equipment.
Cost allocation and cost apportionment are the two procedures which describe the identification and allotment of costs to cost centres or cost units. Cost allocation refers to the allotment of all the items of cost to cost centres or cost units whereas cost apportionment refers to the allotment of proportions of items of cost to cost centres or cost units Thus, the former involves the process of charging direct expenditure to cost centres or cost units whereas the latter involves the process of charging indirect expenditure to cost centres or cost units.
Firms may window-dress the financial statements in order to show a rosy picture of their accounts. In such a case, the whole exercise of analyzing the statements becomes useless. Window-dressing is also done to forecast a better picture to shareholders, bankers and financial institutions.
After having successfully assembled the resources, the company is also required to assure all its stakeholders that it is indeed making good use of the resources in a manner benefitting all the stakeholders. This is considered as one of the important responsibility of the company.
(Sherman, A. & Hart, M., 2006)
Since the deals of mergers and acquisitions involve a huge amount of money, a company cannot be solely purchased based on its stock prices due to the presence of a huge chance
The external parties like stakeholders, creditors, government etc can get a fair idea about the overall functioning of the business from these financial statements.
The public companies present a summarised