Financial Analysis of Farsons and Heiniken

Financial Analysis Management &
Enterprise - FAME

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Presentation of the detailed analysis in the financial performance between the two
companies....................................................................................................................................3
2. Importance of analysing working capital -..............................................................................8
3. Analysis of annual cash flow of both the companies...............................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
APPENDIXE.................................................................................................................................13

INTRODUCTION
Financial analysis helps the company to have the major impacts in masking the effective
decision-making in the organization. There are various level of ways which will help in proper
analysing the business situation of company in more effective way for particular level of
development. For the comparison two firm which have been chosen to have the proper analysis.
The companies are Farsons and Heiniken as both are beer manufacture company as the level of
competitor firm. Farsons is a Maltese food and beverage conglomerate. The businesses of the
Farsons Group include brewing, production, sale and distribution of beers. On the other hand is
a pale lager beer with 5% alcohol by volume produced by the Dutch brewing company Heiniken
International. Heiniken beer is sold in a green bottle with a red star.
MAIN BODY
1. Presentation of the detailed analysis in the financial performance between the two companies.
Profitability ratio
Operating profit margin- the operating profit ratio have the clear indication regarding
the profits which is earned by company after meeting all the level of cost such as raw material
and wages of labour etc. the company has been type of profitably ratio which have the depiction
of efficiency as per firm in keeping control in the cost and expenses which have been attached in
business operation development. The higher level of margining in operation profit have the
reselection of the better level of performance in an enterprise in the systematic accounting
period. The ratio analysis of company Heiniken has seen that operating margin is having the
steep level of declining as comparative to the competitor firm arson in the level of increasing
trend. This has the clear indication that the latter company have the more level of efficiency in
order to meet in operation expenses as the former one. The companies are considered to be more
effective which is somewhere having the major level of contribution in development of company
in more appropriate manner.
Net profit margin- The profitability ratio have the proper level of indication which are in
level of sales proportion of the systematic sales revenue which can be converted into the net
profit. The ratio has been analysed as the measure of key performance in the profitability of firm.
The increase higher level of profit margin makes the company more effective along with
efficiency in range of conversing the sales into net profit. As per the result of the analysed that

the Heiniken is having the four years decline as there i8s systematic decrease in operating profit.
This has the clear indication that the company is not able to have the well level of performance is
the aspects of sales along with generating the level of operating profit. On the other hand the
NPM of the latter company is having the level of increase as compare to former one through
having proper level of profit generation. This is helping in reflecting better performance of
company as compare to is competitors in gaining the level of competitive advantage in
understanding the marketing environment in more proper level.
Return on assets () – it has been refereed as ratio which have measurement of effectiveness in
companies in the respects to have proper level of earning as per the investment done
systematically on assets. This also helps in having the clear level of reflection about the company
level of conversion of money in purchasing the assets into the net profit. The positive level of
result in of the ratio have the proper level of insinuation in company ability to generate a high
level of profit generation with having the systematic level of investment of assets. As per
properly analysis the both companies return on assets it has been clearly identified as the
Heinlein ROA is 5 and Farsons is resulted as 7 which turned out to have the managing of the
latter company is able to have more focus in generation of more efficient use of its assets as
compared to Heiniken.
Return On Equity (ROE) – as consideration of the profitability ratio is term as the ability in
having the generation of the specific profits which is earned by company in having systematize
investment on shareholder in inside the company. In accordance to have the level of proper
analysis it has been identified that Heiniken is having the downfall trend as comparative to its
competitor firm. The later one is having the level of increase in the company that is from 8 to 12
in the between of four years. The company able to have the proper generation of amount of
annual profit along with having proper level of investment which is being made by the
shareholders as compare to the specific competitors Heiniken. In existence of positive
relationship has increase the level of ability of company to have the increase level of generation
of profit without adding much to the capital of the firm.
Leverage ratio -
Debt-equity ratio- this ratio has the indication of values in percentage in regard to
financing of company along with proper attainment from their respective investors and
shareholders. The higher level of debt equity ratio have the major level of reflection in more of