Financial Analysis of British Gas: Industry Highlights, Background, and Ratio Analysis

Economics
and
Business

EXECUTIVE SUMMARY
The financial statement is the important part of any enterprise as it reflects the health of
the organisation in terms of facts and figures which are reflected on the face of their investors.
These statements are analysed by the internal and external user of the business concern so that
they can develop understanding about the performance of the entity over the accounting period.
The following report showcase about the UK companies that is British Gas and highlights that
how they analyse their business performance in the financial year after evaluating their financial
statements. In this report multiple interpretation has been carried out with respect to financial
statements items reflecting in the balance sheet and thereafter the strong recommendation has
been carried forward to the organisation.

Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
TASK...............................................................................................................................................4
1. Industry highlight with respect to the Company:...............................................................4
2. Background of British Gas from the Beginning:................................................................5
3. Analysis of Financial Figures of British Gas:....................................................................5
4. Ratio Analysis along with interpretation:...........................................................................5
5. Recommendation:.............................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Business economics relates to applied economics that studies about the financial,
environmental, and market related issued faced by the business concern. Business analysis means
analysing the performance of the entity by applying management and financial tools so that
performance of the organisation cab be judged and evaluated accordingly. After implementing
such strategies, the organisation would achieve the next level height that provides then
competitive edge in the market (Afanasyeva, Pokrovskaia, & Grishakina, 2021). It the core duty
of the organisations management to manage the resources of entity in such manger so that they
will effectively and efficiently utilized. This report highlights about the British Gas Plc. based in
United Kingdom who is providing energy services as their entity’s product which includes gas
and electricity segment. They are considered as best companies of UK who are working in gas
and electricity segment. They are providing the LPG gas to household by installation of Pipes in
their houses which are installed by other organisations. It is one of the ancient firms of UK and
according to market surveys and information gathered from the print media and journals they are
working in new heights as their net profits increases multiple times compares in previous years’
data in 2020. In this report financial ratios have been calculated and analysed accordingly
compare to previous years in order to check their performance. At the end of this report certain
recommendation has been provided to management of the entity that how they can improve their
business cycle through implementation of regular feedback so that their product quality raises at
higher standard.
TASK
1. Industry highlight with respect to the Company:
The UK market is completely changed over a decade as there are significant changes taken
place at industry and government level. Energy sector mainly focuses on the final price that is
delivered at the door step of household with respect to Gas and electricity (Barbieri, Bragoli, &
Marseguerra, 2020). There are various policy initiatives has been taken place with the increased
competition in order to control the price of gas and electricity to an acceptable level. Various
economic factors also affecting the business profits however energy industry regularly supported
by government in form of various subsidies in regular interval of time.