Financial Position Key Financial Indicator: This part of the report includes some key financial performance indicators for the three-retail giant of UK. This three company shares almost 72% of UK retail market share. Looking at the size of the company it is very important for management to identify the key financial performance indicator for their organisation. Sales Growth This is one of the major performance indicator for most of the companies particularly companies within retail sector. These companies are serving consumers by providing their basic and luxury items. Sales growth indicates company’s current position in the market as compare to its peer group. Since UK retail market is almost an oligopoly market it can be easily evaluate the performance and efficiency of the management of these three companies. Operating Profit Operating profit is another appropriate performance measurement indicator. Since these companies are largely utilising their fixed asset and labor, it is very important for this companies to maintain their operating cost efficiently. High labour cost or operating expenses can lead to a humongous loss to any firm and its shareholders. Financial Ratio: Any investors or potential investors generally analyse the financial ratios of a company before making an investment on it as they properly indicate the current position of the company. At the same time, these financial ratios are important from manager’s point of view also to assess their performance. While creditors also look at those ratios before giving any loan to the company. Precisely speaking everybody analyse the ratios before involving with any organisation. Ratios like ROE, EPS, and Dividend Payout are the most relevant from investor’s point of view as they are specifically indicate return generate by a company using invested capital. Whereas leverage ratios, efficiency ratio, operating or net profit depending on business (in retail industry operating) are of more interest to managers. While creditors i.e. lenders are more interested to see the efficiency and cash conversion ratios of a particular firm. Accordingly the below explained ratios are very important for retail industry. Operating Profit Margin: This indicates the operating profit as a percentage of sales. OPM signifies firm’s capability of generating profit from its operating activities. Generally, higher operating profit creates some tremendous investment opportunities for both investors and lenders. Total Asset Turnover: The ratio is an appropriate indicator of the fact that how efficiently and effectively company is utilising their assets to generate revenue. This ratio is very important for a retail company as they posse’s lots of fixed assets. The higher asset turnover signifies higher asset utilisation. This ratio is a good indicator of management efficiency. Higher asset turnover implies efficient management team. Current Ratio: This ratio is very important from retail industry point of view as it indicates the liquidity position of the c
Corporate Management & Finance- Assessment Element 2 Table of Contents Overview 4 Financial Position 4 Key Financial Indicator: 4 Financial Ratio: 5 Financial Statement Analysis 7 Liquidity Analysis 8 Solvency Analysis 9 Sainsbury’s 15 Business Objectives 15 Forecasts and Strategic Plan: 15 Strengths 15 Weakness 16 Opportunities 16 Threats 16 TESCO 17 Business Objectives 17 Forecast and Strategic Plan 17 Strengths 18 Weakness 18 Opportunities 18 Threats 18 Morrison’s 19 Business Objectives 19 Strengths 19 Weakness 19 Opportunities 19 Threats 19 Investment Recommendations: 19 References 21 Overview This report is intended to provide potential investors with a financial analysis and insight…
This issue is also highlighted in the statement of Broughton (2010), which is analyzed in this paper. Three are the key issues highlighted in the specific statement: a) the term value is quite common but in the context of the business environment its importance is much higher compared to the daily life, b) as an element of the business environment, the term value can be given different interpretations, reflecting different aspects of each organization and c) when trying to define the context of value, as related to business processes, it would be preferable to focus on specific issues; a simple definition of value would be also applicable in businesses with different characteristics.
In the corporate world any sort of investment an investor basically makes is based on the fact that the ‘Net present value’ arising out of the project is satisfactory enough discounted by a certain effective return the customer thinks can enhance his value for his/her investment.
This estimate of asset valuation is the most conservative as it solely depends upon the book values of the assets. It is assumed that in the event of bankruptcy, the company is likely to receive at least this value of assets (Jaffe and Ross, 2004). If the above values are taken into consideration, it can be noted that M&S has performed well especially in terms of generating higher NAV per share.
A lot many efforts were made towards identifying a predictable trading pattern which could be used for chasing profitable deals. From the mid-1950s to the early 1980s, a random walk theory (RWT) of share prices was developed based on the past empirical evidence of randomness in share price movements.
There are a number of theoretical models available which form the solid base for adapting the valuation model that most suits the particular situation. Irving Fisher, an eminent economist has made the outstanding contribution to the theory of finance. In his analysis of valuation of bonds Fisher has cited several empirical relationships, hat have contributed to the formulation of the valuation model evinced by him.
The standards of the goods being sold in the market are transitional, and experience consistent changes with the passage of time. The changes beyond being public motivated, can be influenced and generated by the other companies themselves. In the modern era, the concept of the need analysis of the market has toppled, and followed by the measures which transform and influence by need of the public i.e.
Another school of thought believes that dividends are adverse for the average shareholder as they attract taxes and cause fiscal disadvantages. Last but not the least the third group lauds large dividends as positive signal to shareholders that all is well.
that dividends have nothing to do with firm value because there is no tax disadvantage to an investor to receiving dividends, and that firms can raise funds in capital markets for new investments without having to go through high issuance costs. Another school of thought
This has been experienced in housing offices, civic buildings, universities, colleges, roads, public realm, hospitals and rail constructions (Osborne, 2013). Similarly, Kier Group has been involved in facilities maintenance, environmental consultancy, maintenance of
Instead of this, the market worth of the company depends on its operating profits. Company’s capital structure is the means by which a company funds its assets. It can finance or fund its operations either
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