Financial Analysis of Britvic Plc and Comparison with Competitors

This report provides a detailed financial analysis of Britvic Plc and compares its performance with its competitors. It includes an evaluation of the company's financial statements, interpretation of ratios, and analysis of common size statements. The report also discusses the joint project of Britvic plc and Coca-Cola, which will help both companies to increase their market share and provide better products and services to their customers.

AAF0446 Accounting and
Finance

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................................................................................................................................................6
CONCLUSION...............................................................................................................................................7
REFERENCES................................................................................................................................................9

INTRODUCTION
McDonald's Corporation is an American global fast-food enterprise started in 1940 as a
cafeteria in San Bernardino, California, by Richard and Maureen McDonald. They renamed their
business a hamburger stand and then transformed it into a franchise, with the Golden Arches
emblem first appearing in 1953 at a site in Phoenix, Arizona. Ray Kroc (1902-1984), a
businessman, joined the business as a franchised operator in 1955 and went on to buy the chain
from the McDonald family. McDonald's previously had its headquarters in Oak Brook, Illinois,
but in June 2018, business relocated its worldwide headquarters to Chicago. Worldwide
comparative revenue decreased 1.3% despite increasing from the previous quarter, with
favorable similar market in the United States of 5.5% and unfavorable sales prices in the
International Operated division of 7.4% and 3.6%, correspondingly. Combined revenue fell 2%.
Overall revenues grew by 1%. Overall operating profit fell 7%, including $142 million in
significant gains from the sale of McDonald's Japan equity. Net margin fell 13% when these
gains were excluded. The diluted profits per share of $1.84 fell 12% (Chen and et.al., 2018).
Excluding $0.14 per share of current year strategic gains, primarily from the sale of McDonald's
Japan stock, diluted earnings per share for the quarter were $1.70, a 14% decrease when also
excluding $0.11 per share of prior year income tax benefit due to regulations issued in the fourth
quarter of 2019.
MAIN BODY
1. Evaluate the financial statements and the financial analysis of the company along with the
interpretation of ratio
Financial statements are the company's relevant information which helps in assessing its
current performance (Amorelli and García‐Sánchez, 2021). These statements are very helpful for
the investors as well as financial institution for decision making. Financial statements are helpful
for analysing the current position of the company as well as its profitability. The financial
statement consist of trading, profit or loss and balance sheet. The financial statements are very
helpful in analysing the company's demand in the market. The financials gives a better
understanding of the company and company's future growth can be easily accessible through
these fundamentals. Financial statement analysis is a part of fundamental analysis and gives
information of long term stability of the company. The analysis of financial statement is a time

taking and hectic task but the information is highly useful for better decision-making.
There are many other financial information which may help in properly assessing the current
position of the company. The informations like cash flow statements, working capital and many
more are helpful in knowing company's efficiency. Financial information are highly helpful in
assessing the other cash equivalents of the organisation (Gerged, Matthews and Elheddad, 2021).
These financial information may be highly effective when financial statements are seem to be
less favourable on behalf of company. Other financial information may also be used for gaining
more information in a particular segment.
Britvic Plc is a producer of soft drinks and other associated brands. The company was
founded in 1845 and its headquarters are in Hemel Hampstead (United Kingdom). The company
operates in more than 100 countries. The company is equipped with efficient management and
consist of more than 4000 employees. Britvic Plc is a prestigious brand and operates in Great
Britain, Brazil, France and Ireland. The soft drink is highly preferred by consumers and the
company is showing good performance at present.
Britvic Plc is trying improve its performance which is fallen down due to Covid pandemic.
The pandemic has highly affected the businesses around the world and brought decrease in the
sales of the respective company (Reiter, 2020). The current ratio of Britvic Plc has shown
improvement from the past year that is 2020 and it is 1.05 in 2021. The current ratio shows the
company's efficiency in meeting its short term obligations. The company has 0.05 times more
current assets as compared to its current liabilities. It is ideal for the company and may fulfil the
current requirements with ease. Britvic Plc long term solvency is measured with the help of debt-
equity ratio. The debt equity ratio for the year 2021 is 1.4 while the last year is 1.8. The company
has shown decrement in debt which is good sign and it is possible due to profit increment or
better handling of variable cost of the company. The debts are easily cleared by Britvic Plc as
equities are optimum to meet any uncertainty. The efficiency ratio of the company is measured
using assets turnover ratio. The assets turnover ratio of the company is 0.81 and it has shown
decrement of 0.03 from 2019. The ratio is not favourable for the company as it indicates that
company is unable to generate enough profit from its assets (Smith and Castonguay, 2020). The
operational efficiency of the company is checked with the gross profit. Gross Profit of Britvic Plc
is increased by 0.02 % which is good for handling further operations. Net profit of Britvic Plc
has shown an increment of 1% which is quite low. The net profit need increments in the

upcoming years. The earning per share of the company has shown an increment of £ 3 that is £
38 from last year £ 35. This increase is due to the market push after the lockdown.
The company is seen to be highly affected with the pandemic as government guidelines has
closed shops to restrict Corona growth. Britvic Plc revenue seem to be decreasing after 2019.
The revenue collection of the company in 2021 is 1405.10 million euros. The operating profit of
the company has raised 30 million euros from the past year. Britvic Plc is operationally efficient
and continuously trying to improve it. The Britvic has seen several ups and down in terms of
generating revenue for the company. There are huge possibility of growth in Britvic Plc as
customer base is consistently maintained by their operations team. It is trying to decrease its
debts on the basis of equity holdings at present. The company has increase its assets by an
investment of around 4 million euros. Britvic Plc has been consistently increasing its assets from
2019 and at present it has around 544.10 million euros investments in assets. This shows that
company has securely invested in assets in the bad time of Covid pandemic. The pandemic has
created loss but company's condition was quite stable (Xiong and et.al, 2020). This may be due
to huge investment in assets.
Britvic Plc is very good in its operations and management is quite stable and strong. The
company knows its position in the market and consistently trying to increase its presence around
the world. It has been seen that the pandemic decreases the sales of many company and same
happen with Britvic Plc. The difference is seen in the stability of the company. The company has
got a message from this pandemic that debts may decrease the efficiency in bad times. Britvic
Plc is surely a good company and has prestige of providing service to consumers for more than
100 years. The company has been consistently increasing its operations and trying to cope it with
loss faced in past years. Britvic has been increasing its selling on credit as it focussing on
maintaining long term customer relations. Trade receivables are around 383.30 million euros in
2021 which is 35 million euros more than past year. Britvic Plc is very good in maintaining good
relations with its customers and suppliers. This is the main reason of continuous growth.
2. Britvic company performance in against with the competitors and to analysis the common size
statements
Britvic's market capitalization is £1.92 billion, which is a significant sum in comparison to
its rivals. Britvic plc competes with various companies, including Fevertree drinks, A.G. Barr,
and Coca-Cola. The stock value of Britvic on the London stock exchange is 729.50, and it is

increasing by +0.14%. This firm's competitor, Coca Cola drinks, has earnings per share of 55.14,
which is decreased 1.1%. The Coca-Cola organization's sales are 41.32 billion, while Britvic
plc's revenue is 550 million. The britvic company sells Pepsi Co goods in Ireland and the United
Kingdom. It is recognised as being one of the most popular brands in the month of July (Omamo,
Rodriguez and Muliaro, 2018). It has recently been discovered that a tiny group of financiers
invests 37% in Coca Cola, with the remainder investing in Tango or Britvic Plc. It assists the
company in managing its enterprises, focusing on cost reductions and increasing income in order
to gain greater free trade. The CEO of Britvic, John Gibney has conducted market analysis to
uncover potential and difficulties for the firm. In the United Kingdom, both Coca-Cola firms
reach out to people via distributing soft drinks via wholesalers, retailers, and carry operations.
The company sells its products for either original packaging, such as containers or bottles, or
in dispensing form, including such item syrup mixed with fizzy drink (Ross and Caldwell, 2020).
This business generates 33.2 percentage of its revenue from overseas sales, 19.9 percent from
French, and 11.7% from Ireland. The British group started to recoup from the losses incurred as
a result of the unpredictability of the weather by downscaling activities in Ireland. It has aided in
the development of significant income development and strategies for investing in several
businesses. Each institution's potential has grown as a result of the favorable circumstances.
Despite this, it has grown into new markets and has a strong place in the international beverage
industry. Coca-Cola has provided substantial payments to these firms. The reduction of food
squashes in the drink decreases the Britvic sales volume due to shifts in the preferences of
consumers. Individuals are becoming more conscious of the need of living a healthy lifestyle,
thus they are disregarding the sugar in their beverages. This is also an advantage or a danger to
Britvic's ability to capture the marketplace. It was observed that the corporation has done much
better in the UK drinks market, and the annual growth is expanding rapidly in relation to the
carbonates soft drink systems (Jiskani and et.al., 2020). The merging of the British firm and
Coca Cola will provide some variety to the food and beverage industries. This aids in the
survival of the enterprises' key economic circumstances.
Comparative statement analysis of the Coca Cola and the Britvic plc
According to comparable statistics, the assets of the Coca-Cola Company have expanded by
11.32%, and the return on assets obtained by the corporation is 8.74% in 2022. However, in the

preceding two years, the proportion of resources has decreased by 1.38 percent, or 0.17 percent
in 2019 and 2020. In the present period, the accessibility of total assets in the firm has grown
from 5% to 29%. The entity's growth has slowed significantly in the last two years as a result of
the covid. The firm's revenue debts are 30.10% in proportion and will be lowered to 26.20% in
20222. It is a positive sign for the firm's future growth (Logan 2022). The organization's cost of
paying external debt commitments has been lowered about 4%. It aids in increasing speculative
trading. Internally capital spent in the companies is over 77%, which is a positive indicator of the
firm's equity position. The cash preserved in net income is relatively large in order to cover
unknown and potentially. The financial statements are employed to evaluate the institution's
earnings over the three most recent years. The enterprises' net profit after tax is 27,900 million in
the current year, up from 19100 in the previous year. It has increased by 10% in the last year,
indicating that it is now profitable. The CCI has authorised the merger of the Coca-Cola Coke
drink with the Britvic Robinsons drink. It is the 2 large holding businesses' largest merger. The
goal of this partnership is to save money and give drinks at a fair price. This method will boost
inventory levels at the worldwide level. Both items are near alternatives for one another and offer
unique qualities in products and services (Lutalo 2020).
CONCLUSION
According to the aforementioned data, accounting and finance are essential for all firms.
Britvic plc is the corporation that manufactures food and carbonated beverages. In the industry,
the company enjoys a positive reputation. The income reports have been analyzed in this report
to determine the financial situation. Such materials aid in differentiating the firm's productivity
from those of its opponents. It depicts the condition of the firm's assets and capital. The income
statement depicts the amount that the firm earns as from product's price tag. Many comparisons,
including such profitability, liquidity, efficiency, and solvency, are calculated to understand
accounting concepts. Those ratios indicate the individual's capacity to produce profits, how
efficiently it can operate its activities, its capacity to earn money quickly, and its lengthy
trustworthiness. The next section examines the financial performance of the corporations using
financial documents. It includes a research of the rivals' market and an examination of the top
rivals' comparable financial statements. Finally, the breadth of the joint project with the leading

companies is estimated. It is advantageous for the Britvic organisation to initiate the partnership
in order to eliminate a portion of competitive market.

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