Financial Management Analysis of SabMiller and Diageo
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Added on 2019-10-12
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Read the financial management analysis of SabMiller and Diageo based on ratio analysis. Learn about their profitability, liquidity, working capital management, capital structure, and investment. Get insights into limitations of ratio analysis.
Financial Management Analysis of SabMiller and Diageo
Added on 2019-10-12
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Running Head: ASSIGNMENTASSIGNMENT[Document subtitle]
ASSIGNMENT 1ContentsINTRODUCTION.......................................................................................................................................2RATIONALE FOR THE CHOICE OF THE COMPANIES.......................................................................2PERFORMANCE ANALYSIS ON THE BASIS OF RATIO ANALYSIS................................................31.PROFITABILITY...........................................................................................................................32.LIQUIDITY.....................................................................................................................................53.WORKING CAPITAL MANAGEMENT.......................................................................................74.CAPITAL STRUCTURE................................................................................................................95.INVESTMENT..............................................................................................................................10SUMMARY OF ANALYSIS....................................................................................................................12LIMITATIONS OF RATIO ANALYSIS..................................................................................................13CONCLUSION AND RECOMMENDATIONS.......................................................................................14REFERENCES..........................................................................................................................................16APPENDIXES...........................................................................................................................................17
ASSIGNMENT 2INTRODUCTIONThe report is related to the analysis of financial management. This report helped us learning and understanding the usage of analytical tools and techniques and the applicable electronic apprentice which help in making financial decisions. The report shows the analysis and effect of a change in tax, economy, etc. on the financial statements and positions of the companies. In this report, the two companies are taken from the FMCG sector of the UK. And further, the analysis is done on both the companies with the help of ratio analysis which is done for the last 5 financial years of both the companies. The companies which we have taken are SabMiller and Diageo. These both companies are among top 10 companies in the FMCG sector in the UK. These companies are taken for the analysis of their financial positions in the form of our assignment of financial management. The information and data are being gathered from the annual and financial reports of the companies from their websites. The analysis of ratios is done based on the consolidated financial statements,and the analysis is done in the last five financial years of the company and further the information is added with the help of other websites of finance. Further, the results are analyzed and have given a logical and appropriate conclusion and suggestions. Since the report is based onthe ratio analysis only so the limitations are also given based on the ratio analysis only.RATIONALE FOR THE CHOICE OF THE COMPANIESFor the report of analysis of financial management we have taken Diageo and SabMiller. Both the companies are a part of FMCG sector. These companies are among top to companies of UK in FMCG sector. Both the companies works under the food and beverages and alcohol. The people in the UK are more addicted to alcohol. And being an individual, I wanted to see the impact of it on the financial positions of the companies. As these, both are the famous and successful brands in the UK. Both the companies are among top 10 companies in the UK under the sector of FMCG, and they both have a worldwide presence. Both the companies are generating maximum profits and also provides a great return on investment to the shareholders of the companies. And from the past few years, the companies have become the largest producers of wine and brewers in many countries across the globe.
ASSIGNMENT 3SabMiller is known as one of the world's leading brewers who is having more than 200 brands ofthe beer and have around 70,000 employees in almost 72 countries. The company is also growing and expanding in soft drinks, and it is the largest bottlers of the products of Coca-Cola worldwide. The market value of the company is $80.1 Billion. (Sabmiller.com, 2016)Diageo Plc is a multinational FMCG company which operated in the category of food and beverages. And the company also manufactures the products of the alcoholic beverages. And the company is the largest producer of spirits, wine and beer worldwide. The most successful and famous brands of Diageo are Smirnoff and Jonnie Walker. The market value of the company is $77.3 Billion. (Diageo.com, 2016)Therefore, both the companies have the worldwide presence and provide great services to the customers. These companies are among top 10 companies in the FMCG sector of UK in respect of earnings, return on investment, etc. both these companies are the competitors of one another, and they work at the same area in order to provide best services to the customers. So, the comparison of the companies helped in giving the impeccable analysis.PERFORMANCE ANALYSIS ON THE BASIS OF RATIO ANALYSISDiageo and SabMiller are both the famous companies worldwide and among top 10 companies in the UK. Both the companies are performing well and generating the great profits from the pastfew years. And if we try to neglect the analysis then both the companies are on the same rostrum and provide great services across the globe. The ratio analysis of the companies is done on the following basis:1.PROFITABILITYIf we look at the graph and see the ratio of net profit of both the companies based on the financialstatements of the 5years, then we can say that Diageo is generating more profit than the SabMiller. We can clearly see that Diageo is making more profit each passing year and improving the quality of products and services whereas, SabMiller performance is not consistent as the graph goes up and down. The ratio of return on assets basically relies on the profits generated by the company and the ability of the company is measured for the future goals. From both the graphs, it can be clearly observed that the average of return on assets for Diageo is 9% whereas the average of return on assets for SabMiller is 6%. As the ratio of return on assets of
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