Financial Analysis of Britvic plc: Evaluating Statements and Ratios

This report provides a detailed analysis of the financial statements and ratios of Britvic plc, a leading soft drink manufacturer in England. It evaluates the company's performance against its competitors and examines common size statements. The report includes profitability, liquidity, efficiency, and solvency ratios to determine the financial health of the business.

Accounting & Finance

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Evaluate the financial statements and the financial analysis of the company along with the
interpretation of ratio...................................................................................................................3
2. Britvic company performance in against with the competitors and to analysis the common
size statements.............................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Britvic plc is the manufacturing company of the England and it is relay on Hemel
Hempstead. It produces several kinds of soft drinks and it is established in 1845. John Daly is the
chairman of the company. It is registered on the London stock exchange as the element of the
FTSE 250 index. There are various products like Robinsons, tango and the Lemonade brand. It
has taken the franchise of the Pepsi and the 7 up. In the year 2012 the organisation has proposed
to merge with the soft drink producer in the Scotland soft drink A.G. Barr. It is set up in 19th
century and known as the British Vitamin goods company. The net income of this company is £
103.2 million and has 4113 number of employees in the organisation. The company has faced to
maintain the stability in the market. The frequently changing needs of the customers towards the
product is a serious threat to switching among the competitors product (Shafer, and Szado,
2020). The organisation has to ensure that it has to build its brand positioning among the stiff
competitors like Robinson and tango. The main challenges entity faced to determine the price so
it is affordable to the customers. The consumers is satisfied with the products of the company
through this it is able to attain its high market share. The more detailed financial information is
taken from the monetary reports that helps in the deep analysis of the company. The
interpretation of ratio is used to compare the accounting figures of the businesses to verify the
financial key indicators of the company.
MAIN BODY
1. Evaluate the financial statements and the financial analysis of the company along with the
interpretation of ratio
It is one of the fastest, stronger and to achieve higher growth in the future prospects of the
company. Financial statements basically comprises of the income statement, balance sheet and
the cash flow statement. It is the responsibility of the finance department to build the reposts of
the using or arranging the money for several purpose. This helps to know the financial position
of the businesses. It shows the performance of the businesses over the another industry. It guide
whether company is performing better or not. The balance sheet of the Britvic plc show that the
company has the total debt of 59.25 % out of the total equity percentage(Zhang, and Xu, 2021).
The company has the diverse portfolio to capture the wide market. The new culture of the

company and culture helps to respond in the changing market quickly. The company is showing
the positive cash flow from the past few years. The cash flow in 2021 has raised to 180m from
150 m in 2019. The positive cash flow indicates that company is receiving more funds from the
sources rather than to using the funds.
Ratio Analysis: It is the quantitive measurement of the financial reports to measure the
efficiency of the business. It is the part of the key stone equity analysis of the company. This
measurement is utilised by the external users to measure the risk and set the benchmarks. It
signify how organisation is acting with time and by comparing with other industry or the
identical sector and company ( Pham, H.N.A., Ramiah, and Moosa, 2020).
Profitability ratio: This ratio helps to determine the net profit or loss earned by the company. In
2021 the company has the the revenue of the 1.41bn which is same as in the year 2020. The
income of the company has grow with 9.09% means expand from 94.60 m to 105 million. In
2019 the net margin of the Britvic businesses is 1.60 billion that is highest profit company
attained till date. The downfall in the expenses of the COGS has increased the sales by 60% to
70% as an constituent of the net growth of the income. The gross profit of the company is
41.76% in the current year that is more as comparison to the previous year. The operating profit
ratio of the 130.3 in the 2020 and it is 160.7 in the year 2021. The company has 70.40%
Liquidity ratio: It measure the short term solvency and the short term debt-ness of the
organisation. This ratio estimate the capacity of the organisation is to arrange the cash to pay the
current debts and to keep the cash to cope up the emergency situation. The current ratio of the
ratio is company of the current year is 1.08 in the year 2021 and it was 0.75 in 2020 and 0.87 in
the year 2019. The ideal current ratio is 2:1. It denotes that in the current year the company has
less current assets to pay the current liabilities. The quick ratio of the company is 0.84 in 2021
and 0.86 in the year 2020. The ideal quick ratio is 1:1. It was 0.92 in the year 2019. It signify that
the organisation has not enough quick liabilities to pay the quick assets. Quick assets is
computed by subtracting the inventories from the current assets. It aids to estimate the
creditworthiness of the company (Quah, Haman, and Naidu, 2021).
Efficiency ratio: This ratio is measured to used that how effectively company is managing the
assets and liabilities of the businesses. It is also called the activity ratio to utilize the assets
properly and to measure the present performance of the company. It denotes the ability of the
organisation to generate the cash and change the stock in to cash. The assets turnover ratio of the

company is 0.9 in the current year and it was 0.5 in the past year. It shows that the company is
efficiently managing the assets from the sales. The ratio has improved in the present year it
means the sales has increased and the assets has been covered from the sales. The stock turnover
ratio of the Bitvic company in the 2021 year is 5.59 and it was 5 in the 2020. It denotes that how
speedily company is able to sell the products. It denotes that there is no situation should be arise
of overstocking or under stocking.
Solvency ratio: This ratio determine the long term solvency and obligations of the enterprise. It
analyse the financial health of the businesses and capability of the organisation to cope up the
long term obligations of the enterprises. It examine the higher creditworthiness of the businesses.
The debt equity ratio of the organisation is 1.45 in the 2021 year and 1.56 in the past year and
1.98 in the 2019 year (Bogt, and Scapens, R.W., 2019). The perfect ratio of the company is 1:1.
It has higher ratio in the 2021 it means the organisation has more external debts than the internal
obligations of the business. The debt to assets proportion in 2019 is 0.44 that is quite lower in
against with the past years. This ratio was same as 0.37 in the 2020 or the 2021 year. It is the
ratio that denotes that the enterprise is capable to manage the debt from the assets. If the
company has the lower ratio it means the entity is in good position to survive in the long run.
These ratios aids to know the ability of the company to borrow or pay the long term loan.
2. Britvic company performance in against with the competitors and to analysis the common size
statements
The market capitalisation of the Britvic company is £1.92 billion which is quite big amount to
beat its competitors. There are several competitors of the Britvic plc such as Fevertree drinks,
A.G. Barr and the Coca cola. The share price of the Britvic company in the London stock
exchange market is 729.50 and it is rising by +0.14%. The rivalry of this company A.G. Barr
drinks has share price of 462 that is down fall by 1.1%. The revenue of the A.G. Barr
organisation is £ 291.20M where as the income of the Britvic plc is 550 million. The britvic
organisation sell the products of the Pepsi Co brand in Ireland and Britain. It is known as the one
of the top most brand in the month of July (Dang, Ngo, and Hoang, 2019). It has been observed
that the small group of the investors invest as 37% in the AG barr and the rest of the percentage
invested in the Tango or the Britvic Plc. It aids the entity to manage the businesses, concentrate
on the cost savings and to increase the revenue for reaching the better access of the market. The
CEO of the Britvic company John Gibney has research the market to identify the opportunities or

the challenges by the company. In the UK both the companies A.G. Barr reach to customers by
selling soft drinks through connected with the wholesaler, retailer and carry operators. The
enterprise sell the goods either in the packaged form such as the cans, bottles or in the dispensers
form like product syrup that is mashed with the carbonated drink (Habibu Umar, 2021). This
company earns by 33.2 percent from the international sales, 19.9 percent with France and 11.7 %
from Ireland. The britvic organisation started to recover with the loss that has faced due to the
unpredictable conditions and by descaling the operations in Ireland. It has helped to build strong
growth in terms of the revenue and the tactics to invest in several brands. Due to this favourable
conditions and it has increased the more possibilities for this entity. Although, it has expanded
into new territories and has robust position in the international drink market (Cahan, Chen, and
Chen, 2021). The A.G. Barr plc has give a stiff compensation to this businesses. The changes in
the tastes and the preferences of the customers by reducing the food squashes in the drink decline
the sale of the Britvic company. Now people are more aware to live healthy life so they are
ignoring the sugar in the drink. This is also a benefit or the threat to britvic for grabbing the
market. It has seen that the company has performed better in UK drinks industry and the growth
rate is increasing in quick way with reference to the carbonates soft drink system. The merger of
the britvic company with the A.G. Barr will bring some uniqueness in the foods and the
beverages industry. This help to survive with the core economic conditions of the businesses.
Comparative statement analysis of the A.G. Brr and the britvic plc
It has been analysed from the comparative reports the the assets of the A.G. Brr
organisation has increased by the 11.32% and the return company has received from the assets is
8.74 %. in the 2022. But in the last two years there is downfall in the percentage of assets by 1.38
or 0.17 percent in the 2019 and the 2020 year. The availability of the current assets in the
company has increased from the 5% to the 29% in the current year. Due to the covid in the past
two years there is major slow down in the growth of the entity. The total debts of the company in
percentage is 30.10% and it reduced to 26.20% in 20222. It is the good indication for the
company growth. The burden of the organisation to pay the outside debt liabilities has reduced
by the 4%. It helps to increase trading on margin. The internal capital invested in the businesses
is almost 77% which is good to measure the state of equity of the company. The money that is
kept in the retained earnings is quite huge amount to meet the contingency in the future
(Bakarich, and O'Brien, 2021). The income statement is used to analyse the profit earned by the

entity in the last three years. The net profit after tax of the businesses is 27,900 million in the
current year and it was 19100 in the last year. In the recent year it has risen by the 10 percent it
means it is earning good amount of profit at present. The CCI has approved the merger of the
AG Barr drink Iru- Bru and the Robinsons drink of the Britvic. It is the biggest merger of the two
public limited companies. The idea of this joint venture is to save the cost and to provide the
drinks at the reasonable price. This strategy will provide benefit to supply the products at the
international level. The both products are closely substitutes of each other and provide distinct
features in the goods and services.
CONCLUSION
It has been concluded from the above report that accounting and finance is important for
every businesses. Britvic plc is the producing company of the food and the soft drinks. The
businesses has good brand image in the market. In this report the financial statements has
analysed to know the status of the financials. These documents helps to differentiate the
performance of the company with its competitors. It shows the state of the assets and the equity
of the company. The income statement denotes the how much company is earning the income
from the cost of the product. There are many ratio such as the profitability, Liquidity, efficiency
and the solvency ratio is computed to know the accounting terms. These ratios denotes the profit
making capability of the entity, how effectively enterprise is able to run its operations, ability to
generate the cash easily and the creditworthiness of the businesses in the long term. The next part
is the examination of the monetary performance of the businesses with the financial papers.
There is the study of the competitors market and to analysis the comparative financial statement
of the major competitors. At last there is the estimation of scope of joint venture with the listed
company. It is good for the Britvic entity to start the joint venture to reduce the some level of
competition in the market.

REFERENCES
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