Performance Analysis of T plc Company: Business Finance Report

BUSINESS
FINANCE

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Profitability ratio....................................................................................................................3
Liquidity ratio.........................................................................................................................3
Working capital management.................................................................................................4
Stock market performance......................................................................................................4
Investment decision- for investing in T plc company............................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
APPENDICES.................................................................................................................................7

INTRODUCTION
Business finance means the procurement and deployment of fund by the company in their
business. This report will show the performance of T plc company in term of liquidity,
profitability and working capital management. Further, this report will also compare company
performance to industry performance for taking investment decision. This report will also
analyse the investment opportunity in T plc company by taking the base of financial tools.
MAIN BODY
Profitability ratio
Return on equity ratio evaluates how much company is generating return on the
investment. From the above table, data has been interpreted that return on equity ratio of T plc
company is constantly increasing. From the year 2018 to 2019 and 2019 to 2020 the ratio is
increased by 0.25% or 0.75% respectively (Ngetich, 2020). Earning per share shows how much
company is earning money on each share. It is increased from 2019 to 2020 by 2p. Dividend per
share is the amount declared as a dividend by the company for its shareholder. Divided yield
ratio is increased from 2018 to 2019 by 1% but after that it became constant. Price earning ratio
(P/E) is used to analyse the share price of the company is over-valued or under- valued. This
ratio is constantly increasing year-on-year basis. From the year 2018 to 2019 and 2019 to 2020 it
is increased by 20 to 22 and 22 to 25. Moreover, gross profit of the company is increased from
2018 to 2019 by 1% then after it became constant. Net profit of the company is increased by
0.15% from the year 2019 to 2020 (Kennickell, Kwast and Pogach, 2017).
Liquidity ratio
Current ratio is the part of liquidity ratio which shows how much company is capable in
paying its current obligations. The standard current ratio is 2:1. From the above table, it has been
interpreted that the current ratio of the company is decreasing from 1.1:1 to 0.95:1 and 0.95:1 to
0.8:1. Quick ratio measure the short term liquidity position of the company. This ratio decreasing
from 2018 to 2019 and 2019 to 2020 by 0.65:1 to 0.55:1 and 0.55:1 to 0.4:1.