Financial Analysis of Simonds Farsons Cisk PLC and Heineken Holding N.V.

Financial Analysis
Management &
Enterprise

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
TASK 2 .........................................................................................................................................13
TASK 3 .........................................................................................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................17
APPENDIX....................................................................................................................................18
.......................................................................................................................................................29

INTRODUCTION
The word financial analysis is a structured method of analysing information from
different financial statements in order to accurately determine the financial situation of
businesses (Kim and Jeon, 2015). There are different kinds of financial reports like statement of
financial position, statement of comprehensive income and cash flow position with the purpose
of obtaining important financial data. The purpose of the project document is to evaluate and
compare corporations ' financial results form 2015-2018. The study mainly based on two firms
which are SIMONDS FARSONS CISK PLC and HEINEKEN HOLDING N.V evaluating the
financial situation. Different types of techniques like horizontal analysis and vertical analysis,
ratio analysis are implemented subject to overall analysis of financial position of companies. At
the end of the chapter. At last, an evaluation of cash flow statement of both the organisation done
to analyse the flow of cash in operations.
TASK 1
Introduction of both companies:
Heineken company - It is a Dutch scotch ale that Gerald Adriaan Guinness founded in
Holland in 1864. The company works in 70 nations and has a strong portfolio of goods. More
over 250 locally and internationally specialty beers are produced and offered. The key goal of
such an organization is to focus on developing value that allows them to achieve core
performance (Lin, 2012).
Farsons Company - Formed in 1966, this corporation runs its operations in wine, beer,
coffee, etc. development & delivery. Earlier, the business was identified as Wands Limited. The
headquarters are located in Malta, Birkirkara. Blue Label Ale, Cisk Lager and many others are
the main and most popular items of this business. Although, it is a non-bank business firm, the
business is traded on the Malta stock exchange (Barashian and Pronnikova, 2016).
(a) Vertical analysis
Heineken
Income Statement:
Depending on Heineken Plc's updated comprehensive income statement, it can be
determined that it is structured according to 100 percent of revenue calculation. It was improved
significantly over the period from 2015 to 2017. It could be noted that their operating profits

dropped to 51.29 percent in 2018. A declaration of profits contains specific information on
productivity and spending. Nevertheless, over the four periods 2015, 2016, 2017 and 2018, their
net profits fluctuated. As in 2015, it fell by 4.67 percent in the year to 3.75 percent. This
increased or decreased in other years. It rose became 4.46 percent as in 2017. As in 2015, it fell
by 4.67 percent during the year to 3.75 percent. It growing and reduced in other years. As in
2017, it improved became 4.46% but declined again in 2018 to 4.28%.
Balance sheet:
Depending on Heineken's vertical financial position statement review, this can be
determined that certain products are depending on the 100% book value (Rui, 2012). It is
estimated in all four accounting periods; their non-current assets had decreased. It was 84.32
percent in the beginning year of 2015, which fell substantially as 79.31 percent in 2016, 79.90 in
2017 even 78.38 percent in 2018. On the other hand, in deemed four financial years, the cost of
current assets increases and decreases. This was 15.68 percent, like in 2015, which increased by
31.95 percent in 2016 and have become 20.69 percent. Even though it declined by a decent
margin in 2017 and have become 20.10% in 2017, it rose by 21.62% in 2018.
This can be measured throughout the sense of investor assets that its price has continued
to rise over all four accounting period. Beginning in 2015, this can be found that its price was
down 17.90 percent in 2016 it was down 16.78 percent. While this was 16.16 percent in 2017 &
2018 & 17.06 percent. Some of the main advantages for the organization is that their current
liabilities would decrease between 2016 and 2018. In contrast to their multi-current liabilities,
during span from 2015 to 2018 they are often decreased from 59.52 percent to 58.03 percent.
Farsons:
Income Statement:
Similar with the above balance sheet, all products are calculated on even a share of the
total revenue sum within this business. With respect to net sales, it can be found that in 2015, it
was 37.97%, which rose to 38.82% in 2016. This was 38.64 percent through 38.95 percent in
2017 and 2018 and in the following two accounting period. Furthermore, their net profit
fluctuates over all fourth periods. As in 2015, it declined from 14.74 to 10.13 percent in 2016.
Whilst it rose by 12.94% and 13.64% over the succeeding 2 financial year.
Balance sheet:

As for this corporation's financial position statement, it could be calculated that perhaps
the company's enterprise value will decline in three periods other than in 2017. Like in 2015, it
fell from 67.11 to 66.87 percent in 2016. Since it rose and becoming 67.21 percent in 2017, it
dropped once more in 2018 to 59.88 percent. Apart from this, regards to the entity's total
liabilities, this can be noted that in given four accounting periods it increases and decreases
dramatically. Such as in 2015, it fell by 32.79 percent in the year to 32.52 percent. Although its
value dropped by a decent profit in 2017, it grew by 32.89% throughout 2018. This decreased
significantly to 20.37%. For both the client, this is a good indication that the overall debts were
through.
It may have determined, in the light of non-current assets, that its value was improved
other than in 2018. Like in 2015, it rose by 78.52% to 79.14% then 81.42% in the next two
financial periods. Whilst it decreased by an enormous margin in 2018, it had become 77.16%.
Rather than the current assets of the organization for 2015, 2016, 2017 through 2018 are 21.48
percent, 20.25 percent, 18.58 percent and 22.22 percent overall.
CONCLUSION
From the above vertical analysis, it is resulted that the gross profitability situation of
Farsons is quite optimistic whereas the net profitability is optimistic of Heineken comparatively
to Farsons’. The financial position presents favourable current assets position for Farsons
compared to Heineken and the current liability is analysed the effective current liability position
organisation.
(b) Horizontal analysis
Heineken:
Income Statement:
Based on this firm's horizontal profit and loss statement review, this can be found that the
revenue rate was greater in 2017, and that was 5.27% when it was less in 2018, and that was
2.66%. Therefore, their gross margin volume declined by 2.08% in 2018 as well as the higher
inflation was 6.04% throughout 2017. A net income also dropped from 1.64 per cent in 2018 as
well as its price rose to 25.42 per cent in 2017 (Annual Report of Heiniken, 2019).
Balance sheet:
Based on this business's financial statements, this can be found that only in 2017 through
2018, the rising percentage of the company's funds was 0.53 percent or 7.91 percent. As it

declined from 2.25 percent in 2016. As for this firm's resources, this can be seen this is rising
dramatically, like 37.59% in 2016, 1.36% throughout 2017 but 9.97% in 2018. Therefore, the
non-current debts are also increased by 7.24% in 2017 than 1.69% in 2018. The cost of
receivables in 2016 and 2017 grew from 22.09% to 0.59%. The volume of money resources rose
from 268.33% in 2016, which dropped by 19.54% in 2018. Although it decreased to 0.08% in
2018. Their non-current assets dropped to 1.94% in 2016, but decreased by 5.14% in 2017 to
0.31% in 2018 over the next two accounting.
Farsons:
Income Statement:
In the sense of these business, its revenue increased by 7.95 percent in 2018 but enhanced
by 3.53 percent in 2016-17 and 7.59 million in 2018. In addition, their gross margin rose by 10%
in 2016, by 3.03% in 2017 and also by 8.82% in 2018. Together the overall productivity, they
improved to 16.67%in 2018,2016, 9.09% in 2017 and 37.50% (Annual Report of Farsons, 2019).
Balance sheet:
As for this business's financial position statement, it can be noted that the resources of its
owner decreased by 21.14% in 2018, and there was a rise of 9% and 12.84% in 2016 as well as
2017. In contrast, their bit of a non-current liabilities rose as 8.16%, 13.21% respectively 11.67%
in 2016, 2017 and 2018. The cost of current assets also rose in 2018 from 33.33%. In the sense
of the company's overall wealth, it can be found that it rose from 12.27% and 9.40% in three
years 2016 and 2017, but declined by 11.48% for 2018. In comparison, the amount of non-
current assets declined to 16.11% in 2018, which rose from 10.26% or 15.50% in 2016 through
2017. In 2016, 2017 and 2018, together with the total assets grew from 3.13 percent, 3.03 percent
and 5.88 percent.
Conclusion
Form the above horizontal analysis it is analyzed that the income position of Farsons is in
optimistic conditions whereas the financial position of Heineken H.V. is optimistic subject to
financial feasibility.
(c) Ratio analysis: It is a type of technique that is used for assessing companies financial
performance (Peda, Argento and Grossi, 2013). Under this a vital range of ratios are calculated

and interpreted. Such as profitability ratio, efficiency ratio, liquidity ratio and many more (Chun-
yu, 2013). In the aspect of above both of companies, ratio analysis is done below:
 Current ratio:
Conclusion- In comparative manner, Farsons company seems better. It is so because their current
ratio is higher in all four years. Though, it is declining but this is higher then Heineken company.
This is so because Farsons company's current ratio is increasing significantly. Such as in year
2015, it was of 1.72 times that ended on 1.12 times in year 2018. While Heineken company's
current ratios are increasing in all four years like in year 2015, it was of 0.69 times that raised in
next year and became of 0.78 times as well as in next two years too.

 Quick ratio:
Conclusion- In comparative manner, Farsons company seems better. It is so because their quick
ratio is higher in all four years. Though, it is declining but this is higher then Heineken company.
It is so because Farsons company's quick ratio is increasing significantly. Such as in year 2015, it
was of 1.14 times that ended on 0.7 times in year 2018. While Heineken company's quick ratios
are fluctuating in all four years like in year 2015, it was of 0.43 times that raised in next year and
became of 0.58 times as well as in next year it reduced till 0.55 tines. In year 2018, increased and
became of 0.6 times.
 Gross profit ratio: