Financial Resources Management

Financial Resources
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
An evaluation of profitability:.....................................................................................................3
Short-term Liquidity Position and Long term Liquidity Position:..............................................4
Performance from an equity shareholders perspective...............................................................6
Overall performance and position of the business......................................................................7
PART 2............................................................................................................................................9
Valuation for a company using Forecast dividend growth model..............................................9
CONCLUSION .............................................................................................................................12
REFERENCES .............................................................................................................................13

INTRODUCTION
Financial resource management implies to systematised planning, effective managing,
providing directions and establishing controlling over enterprise's financial resources like
collection and arrangement of funds as well as efficient utilisation of fiscal resources within
enterprise (Gibbert, Hoegl and Valikangas, 2014). This involves throughout and detailed analysis
or evaluation of financial resources to manage financial resources.
This study consists of evaluation of performance and current status of corporations
named Balfour Beatty PLC and Polypipe Group PLC. Both companies belongs to construction
sector in UK. Study analyse these companies performance for last five consecutive years by
applying ratio analysis and vertical/horizontal analysis.
Overview of Companies:
Balfour Beatty PLC:
Balfour Beatty is top multinational group of transportation firms. Company finance,
create, build and sustain creative and productive infrastructure underpinning daily life,
strengthening communities and promoting economic growth. With nearly 110 years of expertise
in providing extremely complicated infrastructure mechanisms via projects at heart of regional
communities, company operate with highest standards of quality, security and technological
competence, embed with clients and domestic supply chains, as well as supporting local groups.
Poly-pipe Group PLC:
Polypipe Plc is top manufacturer and construction company of UK. Company is engaged
in manufacture of plastic piping structures for residential, industrial, and infrastructure industry.
Company is engaged in developing piping systems that are primarily utilized and applied in
drainage system, water supply, plumbing, water management, heating, cable management and
ventilation. Company is leading supplier of piping systems in construction sector.
PART 1
An evaluation of profitability:
Gross Profit Ratio:
Balfour Beatty PLC
Year 2018 Year 2017 Year 2016 Year 2015 Year 2014

Gross Profit 371.00 311.00 284 157 131
Revenues 6634.00 6916.00 6923 6955 7264
Gross Profit Margin 5.59% 4.50% 4.10% 2.26% 1.80%
Polypipe Group PLC
Year 2018 Year 2017 Year 2016 Year 2015 Year 2014
Gross Profit 181.00 173.00 180 143 125
Revenues 433.00 412.00 437 353 327
Gross Profit Margin 41.80% 41.99% 41.19% 40.51% 38.23%
Net Profit Ratio:
Balfour Beatty PLC
Year 2018 Year 2017 Year 2016 Year 2015 Year 2014
Net Profits 135 162 24 -206 -60
Revenues 6634 6916 6923 6955 7264
Net Profit Margin 2.03% 2.34% 0.35% -2.96% -0.83%
Polypipe Group PLC
Year 2018 Year 2017 Year 2016 Year 2015 Year 2014
Net Profits 49 34 44 34 14
Revenues 433 412 437 353 327
Net Profit Margin 11.32% 8.25% 10.07% 9.63% 4.28%
From the above calculated gross profit and net profit ratio it has been determined that
both companies have shown a positive growth in last 5 years. Net profit margin ratio suggests
that if the percentage is high then company is capable of generating greater profits than the other
(Khalo, 2014). This also represents the company's sound financial status. This ratio helps to
define the net profitability situation of an organization in specific time frame. Such as the
Balfour Beatty PLC was able to increase gross profit and net profit by controlling operating cost