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Bertie plc: a global retail company operating in Europe, Asia and US

   

Added on  2019-12-03

13 Pages3425 Words120 Views
ACCOUNTING &DECISIONMAKINGBERTIE24 FEB 2016

ACCOUNTING &DECISIONMAKING2 | P a g e

Table of ContentsExecutive summary....................................................................................................................1BUSINESS REPORT:......................................................................................................1Part 1 .........................................................................................................................................1Interpretation of the profitability statement......................................................................1Market Segment Analysis.................................................................................................3Statement of Cash Flow ..................................................................................................4Liquidity and working capital:..........................................................................................4Solvency............................................................................................................................5PART 2 ......................................................................................................................................6Investment appraisal ........................................................................................................6Sources of internal finance................................................................................................7REFERENCES...........................................................................................................................93 | P a g e

EXECUTIVE SUMMARYBertie plc is a global retail company, established in the UK in 1945 selling food andgroceries and operates in Europe, Asia and the US. The present project report will help us todetermine company's performance analysis in UK and US. In addition to it, Bertie Plcconsidered to invest funds in Hill Ranch project of £10m. Henceforth, different investmentappraisals techniques such as pay back period, accounting rate of return and net present valuehave been used to determine assess viability of its Hill Ranch project. BUSINESS REPORT:Financial performance analysis reported that Bertie Plc operational performance isdeclined because of lower GM and NM. Declined sales, throat cut competition, priceinstability, market uncertainties are the reason behind it. Moreover, Bertie Plc liquidity andsolvency position is also decreased due to high debts that contribute to higher the risk. Oncontrary, extended creditors payment terms and reduce the inventory holding period impliedmore cash availability for Bertie Plc. In addition to it, inventory appraisal method suggestedthat Bertie Plc should make investment in Hill Ranch project because it posses positive NPVof 6915000£. In addition to it, US Market segment analysis indicated that its performance isnot as good as other segment performance. The reason behind this is it is new marketsegment, facing competition from Walmart and incurred operating losses. PART 1 Interpretation of the profitability statementRevenue: In 2015, Bertie plc improved its overall sales by only 1.424%. Thepossible reason for such increase is company starts online sales delivery resulted in highcustomer demand and growth in sales as well. However, in UK, it dropped by 1.49% becauseUK is highly competitive market for retail industry. Fierce level of competition, price war,price sensitive customers and recession are the reason for declined sales. On contrary, in USmarket, it is significantly increased by 111.63% which contributed to enhance overall Bertieplc performance. 1 | P a g e

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