In a few words, the main limitation of ratio analysis is that there are many other thingsto consider and that might affect the end result of the ratios and make them ambiguous.For example, inflation is something that can heavily alter a companies’ financialstatements and people might not bare in mind such a factor. In addition, ratios areheavily used to compare, and for certain PLC’s that are big conglomerates it might behard to find an industry to compare with. Furthermore, different accounting practicescan happen within the same company that can make ratios ambiguous. What it is meanby all of these is that while ratios are a great tool to analyse a company’s financial8
performance, there are many other things that need to be taken into consideration forsuch analysis to b thorough. (Investopedia.com)Conclusions & Recommendations:By looking at the data, we can tell that Marshalls PLC has performed on a higher levelduring 2014. This may be related to the fact that they have achieved several of theirtargets, one of them being the broader opening to international markets, as 97 percent oftheir customers came from the United Kingdom. Adding to the two facilities inBelgium, they have opened a facility in China which could give be very successful onthe long-run as China is an emerging country. Throughout the year they have managedto increase their international turnover by 27%. This sign of growth can be a good signfor current and potential investors as it demonstrates that the company is eager to grow.This year’s success can be translated to the London Stock Market where the companyentered in 2004 and where this year the company has continued to increase its earningsper share and dividends. These are all signs that Marshalls PLC is looking at the future. Opening themselves tonew markets and being successful in such a short time reflects a strong leadership andcapability by the company. They are more than settled in the UK as they are sole leadersin the industry and are also the main provider of the government. Marshalls PLC ispotentially good choice for an investment, but profits might start to be seen as theirmain focus now is internationalism and not market share. 9
Reference List:Marshalls PLC (2014). Annual Report and Accounts 2014 [Report] Marshalls PLCInvestopedia. CFA Level 1. Financial Ratios – Uses and Limitations of Financial Ratios.(Online)Availablefrom:-1/financial-ratios/uses-limitations-ratios.asp. (Accessed December 12th 2015)Marshalls PLC. About Us. Operations. (Brochure) (Online) Available from:. (Accessed December 12th 2015)Marshalls PLC. About Us. Our History. (Brochure) (Online) Available from:. (Accessed December 12th 2015)London Stock Exchange. MSLH Marshalls. (Online) Available from:-markets/stocks/summary/company-summary/GB00B012BV22GBGBXSTMM.html.(Accessed December 13th 2015)Financial Times. Equities. Marshalls PLC. (Online) Available from:.
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