Accounting and Finance Assignment: Cranswick Plc
Added on 2020-06-04
17 Pages3805 Words20 Views
Finance
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ACCOUNTING ANDFINANCE
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TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1SECTION A.....................................................................................................................................1Profit, earnings & dividends...................................................................................................1Profitability ratios..............................................................................................................1Earnings ratios...................................................................................................................3Dividend ratios...................................................................................................................5Financial stability & liquidity.................................................................................................7Liquidity analysis ..............................................................................................................7Solvency analysis...............................................................................................................8SECTION B.....................................................................................................................................9Critical reflection on the company portrayed by financial reports.........................................9An evaluation of the corporate governance ...........................................................................9Identify the assets value per share and the current market share price to assess investmentopportunity...........................................................................................................................12CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................14
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INTRODUCTIONAccounting is a major area of the business functions which is concerned with therecording, organizing and interpretation of the historical transactions that took place in anorganization. Finance, on the other hand, is a primary requirement of any establishment becausenone of the firm regardless to their sizes can operate and survive in the market with inadequatefunding. Cranswick Plc is a British leading food production company which is listed on LSE at aconstituent of FTSE 250 Index. It offers premium, organic and sustainable food products invariety of range to the consumers. The thrust of the report is to examine its financial positionthrough ratio analysis technique for evaluating its investment opportunity. Besides this, itscorporate governance mechanism also will be examined for sustainable success. 100SECTION AProfit, earnings & dividendsIn order to determine performance of the company in its respective industry, there areseveral numbers of ratios are calculated and then analysed. In the present section basically threetypes of the ratios considered for assessing Cranswick's business performance which areprofitability, earnings and dividends (Uechi and et.al., 2015). Moreover, interpretation of suchratios are given as below:Profitability ratiosProfitability ratiosFormula20132014201520162017Gross income106.17118.91124.34136.31159.06Net sales875.17994.911003.341016.311245.06Gross profitratio(Gross profit/sales)*10012.13%11.95%12.39%13.41%12.78%Net income36.1443.2141.2545.462.64Net sales875.17994.911003.341016.311245.06Net profit ratio(Net profit/sales)*1004.13%4.34%4.11%4.47%5.03%1
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2013201420152016201711.00%11.50%12.00%12.50%13.00%13.50%14.00%12.13%11.95%12.39%13.41%12.78%Illustration 1: Gross profit ratio201320142015201620170.00%1.00%2.00%3.00%4.00%5.00%6.00%4.13%4.34%4.11%4.47%5.03%Illustration 2: Net profit ratioInterpretationBy considering the above stated profitability ratios it can be found that, gross profit ratiofluctuates from the FY 2013 to 2017. There is neither increasing trend nor decreasing by which itcan be said that, Cranswick not able to manage cost of goods sold in proper direction at the endof each year. Apart from this, it has not welled strategies for reducing the COGS within each andevery year which lead to fluctuate. 2
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