Economics of the Business Environment - Centrica Plc

Added on - 02 Feb 2020

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Economics of the Business Environment
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3Overview of Organization................................................................................................................3Analayzing the factors that affect the financial performance of Centrica Plc and SouthernEnergy Plc...................................................................................................................................3CONCLUSION.............................................................................................................................10REFERENCES..............................................................................................................................11
INTRODUCTIONIn today's time there are many fluctuation in economic environment they may befavorable and unfavorable. Unfavorable condition in business will need some strategies for theirdevelopment and growth of economy. Therefore, firm need to understand all market situationwhich are rising externally through this, they can set up their business easily in competitivemarket situation and will reach out to their ultimate goals. To understand economics of businessenvironment is very difficult task because they have to consist of all factors which are impact ontheir working style. Centrica Plc main competitor is SSE plc therefore, their competition is veryhigh and they consist of different strategies for understanding market situation. In this report itconsist of performance of firm to its competitor from 2006 to 2016 through this, they cananalysis properly and can set market with macro context.OVERVIEW OF ORGANIZATIONAnalayzing the factors that affect the financial performance of Centrica Plc and SouthernEnergy PlcCentrica Plc is public limited company at United Kingdom and it main aim is to supplyelectricity and gas to businesses and consumer. Therefore, it consist of externals factors forsetting up different strategies within organization for maximizing in sale and generating moreenergy for UK service users and firms. Thus, organization is involving of new ideas and someinnovative techniques for attracting their customers (Oil and gas sector of UK,2016). Theyconsist of small and large scale plants for producing enough electricity.Scottish Southern Energy Plc is public limited company and its headquarter is in Perth,United Kingdom. They are delivering products which consist of electricity, natural gas andbroadband to houses and business. It is one of the main constituent of FTSE 100 index. Thisbusiness organization is highly involved in the generation and supply of electricity gas. Hence,other energy related services include gas storage, exploration and production, contracting,connections and metering. Hence, it is one of the sixth largest firm which has dominated theenergy sector to the large extent. Thus, it is one main rival firms of Centrica PlcFinancial performance of Centrica Plc from 2006 to 2016 are as follows:Year20062007200820092010201120122013201420152016
Revenue1640316272208722196322423228242334226571294082797125900Gross profit36414361288038445897420054855394323543634817Gross Margin%22.226.813.817.526.318.423.520.31115.618.6Net Income-1551505-13784419354211245950-1012-747-649Net margin-0.94%9.25%-0.66%3.84%8.63%1.84%5.33%3.58%-3.44%-2.67%-2.51%Earning pershare-0.151.28-0.130.661.490.320.950.73-0.81-0.59-0.56Return onEquity %-7.8161.33-3.5919.8538.667.3722.0917.09-25.53-38.18-22.33Return oninvestedcapital %-0.3132.45-1.6911.5922.375.1313.2810.12-7.64-6.12-3.97GP margin200620072008200920102011201220132014201520160.00%5.00%10.00%15.00%20.00%25.00%30.00%
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