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Finance for Managers: Assignment

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Added on  2021-02-19

Finance for Managers: Assignment

   Added on 2021-02-19

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Finance for Managers
Finance for Managers: Assignment_1
Table of ContentINTRODUCTION......................................................................................................................................3MAIN BODY.............................................................................................................................................3PART A.......................................................................................................................................................3Financial Ratios and key areas to be considered from the point of view of investment............................3PART B.....................................................................................................................................................11Appropriateness of pricing method for achieving strategic financial objectives................................11CONCLUSION........................................................................................................................................12RECOMMENDATIONS..........................................................................................................................12REFERENCES.........................................................................................................................................14
Finance for Managers: Assignment_2
INTRODUCTIONFinancial report is a concise summary of business operations and accounting transaction which hastaken place for a specific accounting period. Financial statements prepared by every company plays acrucial role for every investor as well as stakeholders in their decision making process. The report isbased on ASOS Plc which is a British online fashion and cosmetic retailer. This company is engaged inclothing business and provides facility of online shopping. Also, report will discuss about BoohooGroup Plc, providing services related to fashion and clothing retail business. The report will providecomparative analysis with the help of financial ratios and their interpretation between two companiesnamed ASOS Plc and Boohoo Group Plc. MAIN BODYPART AFinancial Ratios and key areas to be considered from the point of view of investment.ParticularsASOS Plc.Boohoo Group Plc.2018 (in £000)2018 (in £000)1. Current RatioCurrent Assets503.6215.09Current Liabilities558104.39Current Ratio = Current Assets/ Current Liabilities0.902.062. Acid Test RatioQuick Asset96166.84Current Liabilities558104.39Acid Test Ratio = Current Assets/ Current Liabilities0.171.603. Debtor daysTrade Debtors42.613.84Revenue Sales2417.3579.8Debtor days = (Trade Debtors/Revenue Sales) * 3656.438.714. Creditor daysTrade Payables549.734.2Cost of Sales1180.2280.43Creditor days = (Trade Payables/Cost of Sales)*365170.0144.515. Operating Profit
Finance for Managers: Assignment_3
MarginOperating Profit 101.943Total Revenue2417.3579.8Operating Profit Margin = (Operating Profit /Total Revenue)*1004.227.426. Net Profit MarginNet Profit 82.432Net sales2417.3579.8Net Profit Margin = (Net Profit/ Net sales)*1003.415.527. Return on AssetsNet Income82.432Total Assets1007326.89Return on Assets = Net Income/ Total Assets0.080.108. Return on Capital EmployedNet Operating Profit82.432Total Assets1007326.89Current Liabilities558104.39Total Assets – Current Liabilities449222.5Return on Capital Employed = Net Operating Profit/ (Total Assets – Current Liabilities)0.180.14(Source: ASOS ANNUAL Report, 2018)Financial ratio provides a deep insight about the financial position as well as performance levelof the company in relation with financial perspective. For making investment in any company orbusiness firm, investor should make proper analysis of company's financial position as well as itsliquidity position. Before making any decision related to investing of money or funds, investor shouldmake correct interpretation of the available financials and thus proceed further. The above table hasprovided a comparison along with interpretation on the basis of financial ratio of two companies namedASOS Plc. And Boohoo Group Plc.1.Current Ratio – This financial ratio defines the liquidity position of the company. With thehelp of this ratio, it can be ascertained that whether the company has made use of its availablebusiness assets as well as resources of short term nature effectively for meeting its businessobligation. ASOS Plc. Is having a current ratio of 0.90 which is a matter of concern for the
Finance for Managers: Assignment_4

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