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Analysis of Financial Statement: Doc

   

Added on  2021-01-01

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``CASE STUDY
Analysis of Financial Statement: Doc_1

``ContentsINTRODUCTION...........................................................................................................................1CASE 1............................................................................................................................................1Calculation of holding period return......................................................................................1Estimation of Expected return................................................................................................1Calculation of total return to shareholders.............................................................................1The performance of the company on the basis of share price................................................2CASE 2............................................................................................................................................2Contribution margin...............................................................................................................2Calculation of break even.......................................................................................................2Calculation of annual profit....................................................................................................3Calculation of net profit for the year......................................................................................3CONCLUSION................................................................................................................................4REFERENCES................................................................................................................................5
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``INTRODUCTIONFinancial analysis is a process in which a managers evaluate business, budgets, projects and theother entities which are related to finance (Sheikhi, Ranjbar and Oraee, 2012). It helps managersto analyse that whether an entity is solvent, stable, profitable or liquid. The following reportconsists of two case studies, case one contains the calculation of holding period return, expectedreturn, total return to the shareholders. It also contains the comparison of company’s pastperformance in case one example of Domino’s pizza enterprise Ltd is used. In case two exampleof a new cupcakes franchise business is taken. This report also contains the explanation ofvarious topics.CASE 1Calculation of holding period returnHolding period of return: Holding period of return is the return which is received by acompany from holding a particular asset over a period of time. It can be calculated for by usingthe following formula:Growth in earning per share states the holding period of return for Dominos PizzaEnterprise Ltd. In the year 2014 it was stated at 129% which means the share holders are gettinga positive return on their investment. In the year 2015 it is stated as 146% in year 2016 it was at127%, later in the year 2017 it fell down to 124% and in the year 2018 it was stated at 128%which means that the company is providing good returns to its shareholders.Estimation of Expected returnFrom the above historic return it can be estimated that the company will be performingbetter in the near future as per the historic return the shareholders are generating a high returnfrom the company (Bragg, 2012 ). It can also be stated that company can improve its operation inorder to reduce its cost and increase its profit margin and provide better return in the future.Calculation of total return to shareholdersTotal return to shareholders: Total return to shareholders is a measure which is used bymanagers to measure the performance of the stocks of various companies over a given period offtime. 1
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