Accounting and Finance for Managers : Report

Added on - 03 Jun 2020

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Accounting and Finance for Managers1
TABLE OF CONTENTSINTRODUCTION......................................................................................................................1SECTION A...............................................................................................................................1a. Analyzing financial position of the three companies undertaken......................................1b. Identifying best performing company by giving ranks to all of them................................9c. Recommending actions for making improvement in the business performance..............10SECTION B.............................................................................................................................10a. Explaining key stages in the context of capital budgeting tools along with itssignificance..........................................................................................................................10b. Explaining main methods of investment appraisal that can be used in practice..............11CONCLUSION........................................................................................................................13REFERENCES.........................................................................................................................142
INTRODUCTIONIn the context of business organization, it is the accountability of manager to developstrategies and policies in such a manner that makes contribution in the attainment of goals.Under the competitive business arena, it becomes difficult for the managers to achieve bothfinancial and non-financial objectives. In this regard, ratio analysis is the most effectualfinancial tool that helps in measuring business performance and undertaking suitable measurefor the improvement. The present report is based on William Hill, Ladbrokes and PaddyPower which are operating and considered as the leading units under gambling sector. Allsuch business units are listed on the recognized stock exchange of London such FTSE 100and recognized as a major contributor in the UK economy. In this, present report will shedlight on the extent to which financial position of one business unit is sound over others.Besides this, report will also provide deeper insight about the process associated withinvestment appraisal. It also entails the manner in which capital budgeting tools & techniquesfacilitates profitable decision making.SECTION Aa. Analyzing financial position of the three companies undertakenRatio analysis tool helps business units in summarizing financial performance andenables them to compare the same over the years as well as in against to the rivals. Hence, toassess the firm, in gambling sector, that is highly suitable for the investment purpose ratioanalysis has been done.Ratio analysis of William Hill, Paddy Power and Ladbrokes from the period of 2014 to 2016is enumerated below:Financial ratiosProfitability ratiosGross margin or profit ratio1
William HilllLadbrokesPaddy Power0.0010.0020.0030.0040.0050.0060.0070.0080.0090.00Gross marginin%Graphical presentation shows that GP margin of William Plc declined from 88.57% to81.74 at the end of 2016. Further, it has assessed from the evaluation that in the period of2016, GP margin of Paddy Power accounted for 85.50% & 76.91%. Referring overallevaluation, it can be presented that William Hill exerted effectual control on direct expensesin comparison to the rival firms (Choi and et.al., 2018). This aspect can clearly be supportedwith the Swot analysis section which in turn shows that William Hill is enjoying high levelcost advantages and economies of scale. This in turn directly contributes in the profit marginof firm.Net profit ratioWilliam HilllLadbrokesPaddy Power-15.00-10.00-5.000.005.0010.0015.0020.00Net profit ratioin%2
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