Contemporary Corporate Reporting

Contemporary Corporate Reporting

Table of Contents
Part A...............................................................................................................................................3
Introduction: Background............................................................................................................3
Profitability..................................................................................................................................3
Short term liquidity......................................................................................................................3
Long term liquidity......................................................................................................................4
Investor ratios...............................................................................................................................4
Conclusion and recommendation.................................................................................................7
Part B...............................................................................................................................................8
Strategies and Corporate policies.................................................................................................8
Corporate impression and communication management.............................................................9
Referencing................................................................................................................................11
Appendices.................................................................................................................................12

Part A
Introduction: Background
In this report, financial analysis of Future PLC for the past two recent years has been
carried out. Future PLC was founded in the year 1985 and is a media company. The company
deals in publishing magazines related to films, video games, photography, technology, and
music. Headquarter of the organization is in Somerset, England. Chris Anderson was the founder
of this organization. Two years of ratio analysis has been done. The corporate policies, strategies
and financial performance of the enterprise have been described in detail. Graphs have also been
plotted to describe financial performance. CSR activities carried out by the firm have been
elaborated through corporate impression theory. The stock exchange of London has agreed with
all the compliances and reviewed the past track record of Future PLCand allowed it to get listed
on stock exchange. The firm has entered into the Index of FTSE 250. Future publishing, Future
Australia and Future US are the main subsidiaries of Future PLC. In 1994 the company was sold
by Anderson to a British company Pearson PLC. A consideration of 52.7 million pounds has
been quoted by the owner of Future PLC. Audience of around 260 million has been connected
with the company till date.
Profitability
The company in the year 2018 reported annual revenue of 130.1 million pounds and in
the year 2019, the revenue was increased to 221.5 million pounds. Almost 70 percent of the
revenue has been increased in 2019. The operating profit in 2019 rose by 182% from 18.5
million pounds to 52.2 million pounds. Due to the growth strategy of the firm the new scale has
been achieved. The company has experienced strong performance growth of 11% and media
revenue growth by almost 32%. The earnings per share in 2018 were 4.7 which move upward to
9.3. The investors and the shareholders would want to invest in the company after seeing this
upward movement in the EPS. The online audience in financial year 2019 has also shown a
growth of 44%.

Short term liquidity
Quick ratio can be applied to measure the short term performance of any organization.
The organization ability and capacity to settle its current obligations which have to be settled
within 12 months are measured by this quick ratio. The liquid assets of the firm will be used as
an indicator to analyze the liquidity of the organization (Singh 2017). Liquid assets such as
inventory, trade receivables, marketable securities, and cash are the main current assets used to
evaluate the short term liquidity(Öztürk&Karabulut 2018).The quick ratio in 2019 is 0.44 which
is less than 1 and it signifies that the capacity to meet all its short term debt is very poor.
According to Jiang & Lie (2016), cash ratio which is also an instrument to examine and analyze
the capacity of payment by cash to the suppliers or creditors or any bills payable by the firm.
This ratio is especially used by the creditors to evaluate the amount of money they would lend to
any organization. Cash ratio in 2018 was 0.11 and decreases to 0.06 in 2019 indicate that the
capacity decrease for repayment by cash to lenders and suppliers.
Long term liquidity
Solvency ratio is applied to examine the long term financial health of a company. The
ability to meet the enterprise long term settlements is evaluated through the application of
solvency ratios (Kamaluddinet al. 2019).The solvency ratio in the year 2019 is 0.05. The ratio is
very low to meet long term requirements or obligations of organization. According to Singh
(2017), a lower solvency ratio indicates that there is high probability that the company will
default to pay its debt. The solvency of the enterprise is determined by this ratio. The cash flow
is measured by adding all the non-cash expenses and the depreciation amount. Interest coverage
ratio (ICR) and gearing ratio can also be used to assess and evaluate the performance of any
funds which has been invested in any listed company. The ratio of shareholder funds and the
debenture funds can be measured by gearing ratio and ICR.

Investor ratios
The shareholders before investing in any kind of portfolio or any project evaluate
different investor’s ratios such as EPS, net profit ratio, debt-equity ratio, etc. The net profit
margin in financial year 2019 is 12.05 percent and in 2018 it was 4.07 percent. A drastic
improvement has been seen in the profit margin. Company can finance its funds either by issuing
debenture or by issuing equity share. Higher ratio of debt-equity signifies that company is
borrowing more money to arrange its finance rather than equity capital. This higher percentage
of debt will lead to higher amount of risk at the time of company bankruptcy. The debt-equity in
2018 was 0.09 which was increased to 0.20 in 2019. Thus it can be seen that the company as
compared to previous year is including more debt components in its capital structure(Lewis &
Tan 2016). Therefore the company is balancing the ratio of debt equity. The asset turnover ratio
is 0.57 in 2019 and in 2015 it was 0.33. This increase in asset turnover signifies that the
management is utilizing or deploying all its assets effectively.
Net profit in 2015 was negative 2.17% and in 2019 it reaches positive 3.66%. Return on
equity in 2015 and 2016 was minus 3.42% and 40.23% and because of the increase in profit and
revenue, the return in 2019 becomes 3.80%. This indicates that the organization is utilizing its
shareholders capital efficiently and effectively. According to Kamar (2017), if the ROE of the
firm is high then the performance of the company will also be high. As per the graph shown in
table 1 the EPS ratio in 2015 and 2016 was in negative figure and after the successful merger or
acquisition the company revenues, operating profit, cash flows increased by a huge margin. The
company purchased all the target company by paying a premium amount which is known as
goodwill.

EPS graph
2019
2018
2017
2016
2015
(6.00) (4.00) (2.00) - 2.00 4.00 6.00 8.00 10.00 12.00
9.90
5.10
3.70
(3.90)
(0.40)
EPS (in pence)
Table 1