Assignment for Managerial Finance

   

Added on  2020-09-08

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Managerial Finance
Assignment for Managerial Finance_1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1QUESTION 1...................................................................................................................................1A Analysing the financial ratios for 2015 and 2016...............................................................1B Determining the performance, investment potential and financial position of both firms.3C Recommending ways to improve the financial performance of business........................12D Evaluating the limitations of financial ratios to interpret firm performance....................12QUESTION 2.................................................................................................................................13A Application of investment appraisal techniques to advise senior manager......................13B Evaluating the limitations over investment appraisal techniques for long term decisionmaking..................................................................................................................................16CONCLUSION..............................................................................................................................16REFERENCES..............................................................................................................................17
Assignment for Managerial Finance_2
INTRODUCTIONTo develop the operational efficiency of business, there is essential requirement of havingadequate amount of funds. In order to meet various business needs such as expansion, sales,purchase or investment, it is necessary that the business must have financial strength which inturn is helpful for making adequate growth of business. In the present assessments, there hasbeen analysis based on the two sports industries: Sport Direct International PLC and JD SportsFashion PLC. Therefore, the managers of these organisations will be suggested to makenecessary improvements in their operational activities as to enhance the financial strength. Thereport will also evaluate various investment appraisals which in turn have some limitations andnecessity in the business operations.QUESTION 1A Analysing the financial ratios for 2015 and 2016To determine the profitability of both the companies in terms of this segmentation, therewill be need to analyse their financial ability. However, with the help of various ratios, themanagerial professionals will evaluate the capabilities of companies to meet the debts or to makethe expansion of business operations (Atoom, Malkawi and Al Share, 2017). In the below listedtable, there has been analysis based 2 years financial ratios of Sports Direct International Plc andJD Sports fashion Plc such as:RATIOSFORMULASSports DirectInternational PlcJD SportsFashion Plc2015Ratio2016Ratio2015Ratio2016RatioCurrent ratiosCurrent Assets8782.2913112.424001.225111.47Currentliabilities383541327348Quick ratioCurrent Assets-inventory3610.946091.131750.542730.78Currentliabilities383541327348GP MarginGross profit*100124143.81%128544.25%74048.62%88448.52%1
Assignment for Managerial Finance_3
net salesrevenue2833290415221822Operating profitratiooperating profit*10028710.13%2127.30%926.04%1327.24%net salesrevenue2833290415221822Net Profit ratioNet profit*1002408.47%2779.54%533.48%984.36%net salesrevenue2833290415221822Gearing ratioLong term-liabilities*1001379.85%33318.31%4312.11%429.48%Capitalemployed13911819355443Earnings persharenet income-preferreddividends0.390.460.050.1Weightedaverage shareso/sReturn on capitalemployedEBIT3960.284660.261380.391820.41Capitalemployed13911819355443Averageinventoryturnover periodCost of goodssold15921.9316201.877832.629372.72Averageinventories823.5868298.5344Dividend pay-outtotal dividends0000100.19100.102
Assignment for Managerial Finance_4

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