Assignment: Financial Decision Making

Financial Decision
Making

Table of Contents
INTRODUCTION...........................................................................................................................3
Overview of Company.....................................................................................................................3
Vision...............................................................................................................................................4
Strategic Goals.................................................................................................................................4
Financial Performance of Go-Ahead Group Plc:.............................................................................5
A. Profitability Measurement:................................................................................................5
B. Liquidity Measures:...........................................................................................................6
C. Dividend Ratios Analysis:.................................................................................................7
Critical Reflection on Genus plc's portrayal in the news
..........................................................................................................................................................9
Evaluation of Corporate Governance at Go-Ahead plc:..................................................................9
Investment Appropriateness in context of Go-Ahead Group Plc:.................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
APPENDIX....................................................................................................................................14

INTRODUCTION
To achieve sustainable growth and enhance business performance, financial decision-
making plays a major role. Financial decision making is a systematic process which starts with
identification and analysis of opportunities. Further this process requires consideration of
financial performance indicators and other financial and non-financial factors that affects
business performance. These factors acts a early warning system for business organisation.
Evaluation and analysis of these factors helps to develop a framework for financial decision
making (Agarwal and Mazumder, 2013). This report provides an analysis of performance and
different operations of Go Ahead Group Plc. It is UK's one of the top listed company in public
transport sector and engaged in providing of passenger transport services in UK. Analysis of
financial performance helps to asses the actual performance of company. It also helps the various
internal and external stakeholders to take important decisions about whether to hold or sell the
securities of company. Various stakeholder of company have great impact on decisions of
company.
Overview of Company
Go Ahead is the leading public transport service in united kingdom with more than one
billion journeys every year. Company's headquarter is situated at Newcastle upon Tyne, United
Kingdom. On the London Stock Exchange it is listed on a FTSE 250 Index group. It started in
February 1987 as a GO-Ahead Northern Limited on the privatisation of the National Bus
Company, In North East England it started acquiring some certain small bus operator, in the
same time it also became the National Express sub-contractor operating service in Midlands,
North East, North West, and South West England (Ambuehl, Bernheim and Lusardi, 2014). In
1993 it began its first major acquisition of Brighton & Hove, in 1994 it acquired Oxford Bus
Company and Wycombe bus company in march. In 1999 a large operator of London, Surrey and
Sussex, Metrobus was acquired. During the privatisation of London Buses company purchased
London Central in 1994, in the same year the company was listed on the London Stock
Exchange. The second London Bus operator, London general was also acquired in 1996, during
the same year company entered the rail market operating the Thames Trains franchise. Director

of Passenger Rail Franchising awarded Thames train franchise to Victory Rail Holdings. 65%
shares in the Victory Rail Holding was owned by Go-Ahead, in 1998 remaining shares which
they did not owned were bought by the company. VIA-GTI entered into a joint venture with Go-
Ahead, taking 65% stake in Govia.
Further the company diversified into Airport Services in 1998 after acquiring Gatwick
Handling international, which provided the ground handling services at UK airport. The product
and services offered by the company are the transport service including regional bus, London bus
and rail services. In the South of England the commercial bus businesses is operated by the
company's regional bus which they own 100% of the business. For the London bus, the company
operate on a tendered contract basis for the Transport of London. It operate in around 167 routes
from 17 depots, 85% of these depots are freehold. For the Department of Transport they operate
rail franchises currently UK's two rail franchises GTR and South-eastern are operated by Go-
Ahead with joint venture with Keolis. Currently Go-Ahead has the employed 28,000 employees
having a 11.3% employee turnover, its employee engagement is 65% for bus and 67% for rail, in
the past year they spent approx £21.1m for the training and development of the employees. In
2018 company has reported revenue amounting GBP 3462 millions and net profit of GBP 89
millions. Company's overall net profit margin is 2.57% (Annual Report of Go-Ahead Group Plc,
2018).
Vision
Go-Ahead vision is clear, company want to reach in FTSE 100 companies' list. Company
also has a vision to expand their business outside the UK. For this, company is continuously
working on creation of brand value in stock exchange and trying to improve their services to
knock the doors of global market.
Strategic Goals
Company is presently struggling with local issues like strikes of staff, decreasing rail
routes, dealing with tenders and regulatory changes. So first priority of company is to resolve
them by developing a dynamic strategy. Beside these company is facing competition by
multinational companies in same sector like First Group Plc to gain competitive advantages
company is following sustainability strategy while improving their services. So main strategic