Rolls royce has to follow different laws in different

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Rolls-Royce has to follow different laws in different parts of the world. For instance, trade laws, labour laws and competition laws are some of the laws the company faces[Rol171].EconomicChange in the general price level in an economycan affect Rolls-Royce’s sales. For example, if the aviation fuel prices are high; airline companies will demand fewer engines and reconsider making more aircrafts for that period of time [Kap16].A company’s cost can vary depending on the price of their raw materials. Prices of raw materials such as titanium and nickel alloys fluctuate since they are short on supply, which affects the overall costs of aerospace businesses,including Rolls-Royce [Mon].Multinational companies such as Rolls-Royce are supported by governments since they create jobs for people and increase the overall economic growth [BBC14].23
SocialIt is a well-known fact that aeroplanes andother vehicles in general; contribute to air and noise pollution. Rolls-Royce is consistently striving to reduce carbon and nitrogen emissions [Rol171].Rolls-Royce has taken on lots of Corporate Social Responsibility, moreover, in 2016 they were ranked 8thon the Forbes list for companies with the bestCSR reputation [For17]. TechnologicalAerospace businesses like Roll-Royce must constantly make changes to their engines since technology advances every day, making it easierto find flaws and problems in their engines.Every aerospace business hopes to build products that would not or reduce harm to the environment. Similarly, Rolls-Royce has started working on their ‘Ultra-Fan’ engine which will reduce nitrogen and carbon emissions, moreover, reduce fuel consumption [Rol171]. 3.0 FINANCIAL ANALYSIS AND RATIO ANAYLSISNet income: Rolls Royce 201631 Dec 2016 (£ Millions)31 Dec 2015 (£ Millions)Net income/ Net Loss1,432Total Assets: 31 Dec 2016 (£ Millions)31 Dec 2015 (£ Millions)Total Asset25,53822,324In December 2016 the total asset was amounted to £ 25,54 billion which is £ 32 billion higher than the previous year’s amount. Return on Asset:31 Dec 2016 in %31 Dec 2015 in %24
Return on Asset in %3.186.41The ROA for RR has slightly declined in 2016 compared to the previous year. Return on investment 31 Dec 2016 in %31 Dec 2015 in %Return on investment in %Owner’s Equity 31 Dec 2016 (€ Millions)31 Dec 2015 (€ Millions)Owner’s EquityCurrent Ratio:Current Assets/Current Liabilities2016: 12,858/ (-9,534) = -1.352015: 12,116/ (8,173) = -1.48The current ratio in 2016 is below 1, as a result this clarifies that firm will be suffering troubles in paying off its short-term liabilities along with the obtainable current assets[Smi16]. Quick Ratio: Current assets – Inventory / Current Liabilities2016: (12,858 – 3,086) / (-9,534) = -1.022015: (12,116 – 2,637) / (-8,173) = -1.16Quick ratio identifies the liquidity position of an organization. It determines whether the company willing or is capable to cover short term liabilities. In addition, Quick ratio benchmark is 1 but Rolls Royce both ratio in 2016 and 2015 is less than 1 which indicates that the company might not be able to cover their short-term liabilities.

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