Financial Analysis Management & Entrepreneurship

FINANCIAL ANALYSIS
MANAGEMENT & ENTERPRISE

Contents
INTRODUCTION...........................................................................................................................1
1. FINANCIAL PERFORMANCE ANALYSIS.............................................................................1
Assessment of financial performance of Farsons...................................................................2
Assessment of financial performance of Heineken................................................................7
Ratio analysis........................................................................................................................12
2. IMPORTANCE OF ASSESSING THE WORKING CAPITAL..............................................14
Working capital management of Farsons.............................................................................14
Working capital management of Heineken..........................................................................14
3. CRITICAL ASSESSMENT OF THE ANNUAL CASH FLOW STATEMENT.....................14
Cash flows of Heineken........................................................................................................14
Cash flows of Farsons..........................................................................................................15
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Financial analysis evaluate business, economic trend, building financial policy, long term
goals investors will examine a company's financial statement, income statement, balance sheet,
cash flow statement (Karanina, Bykova and Ilysheva, 2014). Financial ratios are used to evaluate
it performance as compared to other company financial analysis will provide best project for the
companies. To evaluate the financial statements, financial statements of Farson and Heineken are
taken. these company’s ideals in providing best beers and brewers to its consumer's and its
clients. these companies have created market in local as well as international platform. This
report will include the financial ratios of both the companies, along with vertical, horizontal
analysis, further for making decision, importance of analysing of the working capital. Finally,
report will include a critical analysis of annual cash flow statements of both the company for two
years, finding will be accurate for making better decision for the firm.
1. FINANCIAL PERFORMANCE ANALYSIS
Overview of Farsons
Farsons group established in 1928, since then group is engaged in the brewing of beers
and beverages. it also involves in production and sale, distribution of beverages (Zeghal and El
Aoun, 2016). In the competitive environment where the world’s leading food and beverage are
competitive with each other, Farsons is committed to hold highest product standards and services
in the portfolio, as a leading group of companies with an annual turnover in excess of euro 95
million. The group also focuses on innovation and export of beverages including wines and
spirits will also help in ongoing growth and success. The aim of organisation is to grow both on
local as well as on international business, with investment in million Farsons is ensuring its
clients and consumer, gets best quality standard beer with new beverage packing facility. It
focuses on providing better quality of beverage to gain loyalty from consumers and to build
meaningful partnership with other competitive brands to enhance its business.
Overview of Heineken
Heineken is the world's leading portfolios of beer brands and is one of the world's leading
brewers in terms of sales volume and profitability. It includes more than 200 international
premiums, regional, speciality beers. It has a good network of distribution beer and breweries,
Heineken is giving good competition in domestic as well as international market with world class
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brands of beer and brewers for its customers and for clients. With variety of cocktail and brewers
and of beer consumer is enjoying their times. Heineken is taking over the market of brewers by
providing better quality beer to it consumer and client. it has capture local and international
market by distributors of beer and brewers to its clients (Farrell and Gallagher, 2015).
Assessment of financial performance of Farsons
Vertical analysis
A form of analysis that involves report of profits and loss and financial position statement
of organisation. All revenue report numbers are separated by the sales number so the revenue
statement estimates are sales figures. All the elements of financial position statements are split
by total assets of organisation in order to transform the figures of financial position statements
into percentages of figures of total assets (Bekele, 2016).
Income statement
Based on the vertical assessment of Farsons ' income statement, it was estimated that the gross
margin of the firm was 37.97 percent in 2015, that was boosted to 38.82 percent in 2016 or 38.64
percent or 38.95 percent in both in 2017 and 2018 (Muscat, 2013).
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