StuDocu is not sponsored or endorsed by any college or university Managerial finance - Financial analysis of a company Managerial Finance (Edinburgh Napier University) Downloaded by Shameer Babu Thonnan Thodi ([email protected]) lOMoARcPSD|4323350
Managerial Finance Coursework 2017/18 AIM Company 40331877 Erasmus 1. Introduction. Young & Co.’s Brewery, Plc. operates and manages pubs and hotels in the United Kingdom. The company operates through three segments: Young’s Managed Houses, Geronimo Managed Houses, and Ram Pub Company. It sells drinks and food, as well as provides accommodation services; and owns, leases and sub leases its owned or leased pubs to third parties. It has 172 managed pubs and 79 tenanted pubs principally located in London and the South East. Young & Co.’s Brewery, Plc. was founded in 1831 by Charles Young and Anthony Bainbridge when they purchased the Ram Brewery. Ram Brewery was one of the oldest British breweries until 2006, when John Young, the great- great-grandson of the founder, died. After that, Ram Brewery closed and, in 2011, the brewing operation was transferred to a new company, Wells & Young's Brewing Company Ltd, when Charles Wells acquired Young´s percentage of shares. In 2013, the redevelopment of the site was announced, to provide new residential and commercial properties alongside shops, bars, restaurants and public open spaces. 2. Financial Figures. Current Year Last Year % Movement Revenue 245.9 227 +8.3 Operating profit / loss before exceptional items 41 37.4 +9.6 Total capital employed 45.1 50.9 -5.8 Total assets 714.8 654.3 +60.5 Net cash generated / used in operating activities 13.2 0.2 +13 Number of employees 3735 3496 +6.8 Earnings per share (basic) 55.76p 55.17p +1.1 Total dividend paid per ordinary share 17.45p 16.46p +6.0 Year-end (10 June) closing share price 1220 1230 -0.8 Year end (10 June) market 452.5 407.2 +11.1 Downloaded by Shameer Babu Thonnan Thodi ([email protected]) lOMoARcPSD|4323350
capitalisation 3. Company analysis. With the aim of advising our friend if he should invest in this company we must carry out a financial analysis of the current situation of the company. We have to calculate some ratios that will tell us in which state the company is in different financial aspects. One of the most important areas of analysis might be the business´ profitability, which is going to tell us show worth it is for the shareholders to invest in the company. To calculate the amount of profit per capital used we can use two ratios: ROCE and ROE. The difference between these two ratios is that ROCE takes account of all the capital used (total equity and long term debts), whereas ROE only takes account of the total equity (ordinary share capital and reserves) -First of all, we should start calculating the ratio ROCE (Return on Total Capital Employed), which relates the returns achieved to the level of long term capital invested (%). Company´s ROCE in 2015 was 7.2 % , which could be a good or a bad score depending on the comparision with other investment´s ROCE. The bad news is that ROCE decreased in 2016 to 5.79%, that means that the capital employed increased relatively more than the operating profit did.
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- Balance Sheet, Financial Ratio, Generally Accepted Accounting Principles, Shameer Babu Thonnan Thodi