Financial Performance Analysis and Impact of Training and Development

This article discusses the financial performance analysis of British Sky and the impact of training and development on employee performance. It includes computation of financial ratios, analysis of gross profit margin, operating profit margin, and net profit margin. It also suggests various options to enhance profitability and highlights the importance of training and development in improving employee performance.

Knowledge and
Creativity

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Computation of ratios:........................................................................................................3
2. Financial Performance Analysis:........................................................................................5
3. Different sort of options/alternatives which could be advantageous for respective
organization in order to enhance profitability:.......................................................................7
TASK 4............................................................................................................................................8
Impact of training and development for enhancing performance of employee......................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
In present business environment, every business wants to achieve business goals within
reasonable time-frame. Financial analysis is crucial aspect for business which determines the
actual position of enterprise (Sheikhi, Ranjbar and Oraee, 2012). Training and development have
been considered as a very essential part in uplifting the performance level of employees in
various companies. This task evaluates the real fiscal performance of enterprise British Sky
which is a broadcasting corporation. Company is major supplier of telephone as well as
broadcasting or broadband services. Also study contains suggestions for improving profitability
level.
TASK
1. Computation of financial-ratios:
(i). Gross profit- The term represents part of the profits that entity gained post distributing all
expenditures linked with the production as well as revenues of multiple products/items. Amount
of GP usually reported as difference revenue and COGS in the organization's income statement.
In this context, the gross profits of the relevant company over two years and the GP margin
estimate are as follows:
Description (GBP in Million)
Year-2014 Year-2013
Revenues £7632 £7235
Less- Cost of sales £4616 £4329
Gross profits £3016 £2906
(I) GP margin(%) = Gross profit / Net sales x100
Description (GBP in Million)
Year-2014 Year-2013
Gross profits 3016 2906

Net Revenues 7632 7235
Computations: £3016/7632 x 100 £2906/7235 x 100
Gross profit margin 39.52% 40.17%
(ii.) Operating profits: The term specifies amount of profits that the entity earns via its
fundamental business trade activities. Especially noteworthy fact here is that sum of interest
expenses paid-out and tax payable sum are excluded in the assessment of operating profits.
Below are British Sky's operating profit estimates and margin percentage, as follows:

(iii.) Profit of current year:It is considered net-income that the company has received post paying
all of its expenses/costs over a time-frame (Delen, Kuzey and Uyar, 2013). This displays net
profitability level of the company during a given period, underneath the tables contains net
profits earned during 2 years and entity's NP margin:
2. Financial Performance Analysis:
Descriptive analysis- In that subsection of the study-assessment, a detailed descriptive review
and analysis is performed in following way to determine financial-performance in various terms
of corporation British-Sky, as below:
Gross profit margin :

2013 2014
39
39.2
39.4
39.6
39.8
40
40.2
40.17
39.52
Gross profit margin
Analysis: From the above measurements and graph of company's GP margin, it's been evaluated
that the GP ratio in year-2013 was around 40.17 percent, which decreased to around 39.52
percent, since during this time-span gross profits recorded a growth of just £ 110 million,
whereas sales improved by a big figure.
Operating profit margin:
2013 2014
15.5
16
16.5
17
17.5
18
18.5
18.38
16.7 Operating profit margin
Analysis: Operating profit margins figures and graph show that this ratio was 16.7% in year-
2014, and that was around18.38% in 2013, suggesting decreasing pattern owing to a fall in
operating profits over period. Evaluation pointing towards that enterprise's capabilities to achieve
operating profits have been decreased over the period.

Net profit margin:
2013 2014
10
10.5
11
11.5
12
12.5
13
13.5
14 13.53
11.33 Net profit margin
Analysis- Based on graph and net-profit ratios displayed above of the British Sky corporation,
this is evaluated that total/aggregate net profitability level of the organization decreased from
13.53% to 11.33 % during year-2013 to year-2014. The downward trending in NP margin
suggests that the NP making strengths of the company have diminished over respective time-
frame.
Aggregate analysis reveals that financial performance of the firm from year-2013 to 2014
has dropped and at present company has reported positive profits and double digit percentage of
profit i.e. 11.33%. Therefore company is still in position to pay-out dividends but increase in
dividend payout even after a decline in profitability is can lead to negative cash-flows also
adequate reserve should be maintained by company as to deal with future contingencies
(Cucchiella, D’Adamo and Gastaldi, 2015).
3. Various sort of choices/alternatives that could be advantageous for respective organization to
enhance profitabilities:
Based on above performed analysis of British Sky this has been evaluated that there is
need of improvement in profitability level as to enhance the dividend payout. Here following are
some relevant options which can contribute in increasing profits of corporation, as follows:
 Effective cost-management: Sky Broadcasting must try to minimizing expenses for
raising their profits The information examined above indicates that in year-2014 their

spending has been grown significantly. Cost-management is most crucial option for
corporation as by reducing costs company can earn more profits at same revenue level.
Under this alternative, corporation should identity factors which are leading to increase in
operating expenses and adopt appropriate measures to minimise them accordingly.
 Putting efforts in increasing sales: Another option for corporation is to enhance their
existing revenues to achieve increased profitability. With current increase in operating
expenses corporation is facing decline in profits, thus if company is unable to optimise
their current operating expenses, company can adopt this option. Under this option
company can expand their business and implement effective promotional strategies for
enhancing current revenues (Dong, Liao and Liang, 2016).
Company can option any one or both the options to enhance their current business
profitability status. It is advisable to company to adopt these options immediately since a decline
in profits can lead to loss of trust of stakeholders specially shareholders.
TASK 4
Impact of training and development for enhancing performance of employee
The Training and development have observed to be as one of the most major function in
the department of human resource management. Training is specifically set up where a fair
chance have been rendered to employees to making them taught the technical and basic
knowledge of the work they are going the construct as their job duty. It primary focus on
teaching the workers of British Sky which comprises of using some appropriate machines or how
a certain task are being carried out in respect to their clients. Development, on the other hand
defines the educational as well as holistic growth of the people who are at the managerial
position (Noe and Kodwani, 2018). The procedure of development are always being included in
context with adaptability, insights, leadership, attitudes and some human relations. In spite of
having a desirable educational skills and degree, some associates have been found to have low
efficiency at work. The main reason behind such outcome may be the incapability of
misunderstanding in the working of company, these people do not get what all functioning or

operations they have to undergo for attaining the specific task, thus it is very essential for the
respective organization to train their workers as soon as they get recruited.
A certain steps are being followed which involve in determining the need of training
which is followed by establishing the aims, once such part is over type of training method is
selected on which the whole process will rely upon. The method of training must be chose
crucially according to the predefined demands and need of the training. After delivering the
training the overall level of performance are being monitored, which most of the time result in
high development. Processes like automation, computation certainly require proper training as
well as such staff which must be highly efficient themselves so as to train the associates and
make them acquainted with the current developments and technical knowledge. It has been
always evidenced, that due to diversification and modern inventions in making the work
categorised or simplified, but in such process an enterprise become very complex and every
instruments and working has to be explained to each and every team members so that they can in
future explain the clients and can earn profit for organization. Sometimes the specifications or
eligibility of workers does not match with the requirement of the company, the gap which is
quite broad when it comes to evaluate the requirement essential and qualification, thus to
overcome such gap training is utilised (Larsen, 2017). The training process is also important
when the current employees get promoted or shifted to high post or to any other department
because the working criteria of such division may get changes, for this they have to get well
trained. If any new product get launched or being invented in some market by rival company, the
training processes comes into active state where all the properties and features of services or any
product are discussed for making suitable alteration or addition in working. The training part is
absolutely indispensable in such dynamic conditions where at any time some new development
or services may come up which can hamper or lower the productivity of organisation (Frost,
2016). For enhancing the performance level as well as competitiveness of employees, training
process is quite competent in human resource division. It not only make the process of working
efficient or productive but it also increase the self confidence and self managing capability of
employees working in British Sky. The stability and expansion of company always depends upon
the quality of work associates impose, thus training improves the quality of work by lowering the
wastage and making workers adaptive enough so that they can adjust themselves in dynamic

situations. All such factors assist in enhancing the overall character and development of skills
which are actually required in accomplishing the task.
The training part helps associates in getting exposure to recent advancements, make long
term growth, from highly creative team members which have the capability to work in highly
changing environment. Each and every component of training imparts in developing high skills
and leadership qualities which are boost the morale and the team members can attain their goal in
most innovative and experienced manner. There is a basic relation between development and
training, development is generally meant for executives while training is quite operatives, but
overall they assist in enhancing the entire personality of associates and add more skills to their
list for maximising their performance level as well as quality. Various training like induction
training have been used as orientation training which is basically provided to new candidates
which comes in British Sky organisation. The main objective of the training is to make new
employees familiar with internal environment of the respective organisation. It benefits the
employees by providing knowledge bout basic procedures, codes of conducts as well as policies
which are already existing within the environment. It is a form of introduction for the new staff
members in order to make them to perform their duties in a new profession (Bournois and et.al.,
2017). Job instruction program on the other hand, provides information and overview of the job.
In this type of training experience candidates in organisation demonstrates entire job to the
employees. An evaluation has been done for measuring the performance of the employees and
additional training is provided if there is any need for improvement. Vestibule, refresher or
apprenticeship training methods are in sue for proving effective training programs to various
group of team members involving in different task or departments.
CONCLUSION
From study it has been articulated that business' financial analysis indeed an essential
aspect which is advantageous for business owners as well as other external parties. In
corporation like British Sky, outcomes of financial analysis help to assess the viability of key
action such as dividend distribution and other financial decisions. Ratio analysis and descriptive-
reviews are primarily used for determining overall actual financial performances of corporation
over a specific time-span. Training is generally conducted where a clean possibility have been
rendered to worker for making them taught the basic non technical as well as technical and
cognition of the activity they are going the construct as their job responsibility. Job instruction

training and induction training program are some kind of training method which are utilised in
such process.

REFERENCES
Books and Journals:
Bournois, F., and et.al., 2017. Training and management development in Europe. In Policy and
practice in European human resource management. (pp. 122-138). Routledge.
Cucchiella, F., D’Adamo, I. and Gastaldi, M., 2015. Financial analysis for investment and policy
decisions in the renewable energy sector. Clean Technologies and Environmental
Policy, 17(4), pp.887-904.
Delen, D., Kuzey, C. and Uyar, A., 2013. Measuring firm performance using financial ratios: A
decision tree approach. Expert Systems with Applications, 40(10), pp.3970-3983.
Dong, W., Liao, S. and Liang, L., 2016. Financial statement fraud detection using text mining: A
systemic functional linguistics theory perspective. In Pacific Asia Conference on
Information Systems (PACIS). Association For Information System.
Frost, S., 2016. The importance of training & development in the workplace. Small Business,
http://smallbusiness. chron. com/importance-trainingdevelopment-workplace-10321. Html.
Larsen, H.H., 2017. Key issues in training and development. In Policy and practice in European
human resource management. (pp. 107-121). Routledge.
Noe, R.A. and Kodwani, A.D., 2018. Employee Training and Development, 7e. McGraw-Hill
Education.
Sheikhi, A., Ranjbar, A.M. and Oraee, H., 2012. Financial analysis and optimal size and
operation for a multicarrier energy system. Energy and buildings. 48. pp. 71-78.