Financial Performance: Ratio Analysis Report of Rangemaster PLC

This report presents a detailed ratio analysis of Rangemaster PLC, a UK-based manufacturing company specializing in catering machines. The analysis encompasses key financial areas, including liquidity, profitability, efficiency, capital structure, and investor ratios. Liquidity ratios, such as the current and quick ratios, are examined to assess the company's short-term financial health, revealing trends over time. Profitability ratios, including return on capital employed, gross profit margin, and net profit margin, are analyzed to evaluate the company's ability to generate profits. Efficiency ratios, such as inventory days, debtor days, and creditor days, are assessed to determine how effectively the company manages its assets and liabilities. Capital structure ratios, including the debt-equity ratio, are examined to evaluate the company's financing decisions. Investor ratios, like return on equity and price-earnings ratio, are analyzed to provide insights into investor perspectives. The report concludes that Rangemaster PLC demonstrates a strong financial performance and efficiently utilizes its resources, supported by the financial data and ratio calculations. The report uses data from 2018 and 2019 and includes charts to visually represent the trends observed in the ratios. The report also includes references to support the analysis.

RATIO ANALYSIS

TABLE OF CONTENT
• INTRODUCTION
• RATIO ANALYSIS
• CONCLUSION
• REFERENCES

INTRODUCTION
• Financial analysis refers to evaluation of the financial
performance and position of the company. It is carried
out by the experts and analysts for making decision
related to the organisation.
• Range Master PLC is manufacturing company which is
engaged in supplying and producing catering machines
to restaurants, hotels and the public houses in UK.

DEFIITION OF RATIO ANALYSIS
• Ratio analysis refers to comparison of the line
items in financial statements of company.
• It is used for evaluating the number of
information of the entity like profitability,
liquidity, efficiency of the operations and capital
structure of the organisation.

Liquidity Ratios
Current Ratio – The ratio of company is 1.54 in 2019 and
has shown downward movement from last year.
Quick Ratio- QR of company is 0.88 and shown downward
movement of 23% from last year.

Chart
2018 2019
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
Chart Title
Current Ratio Quick Ratio

Profitability Ratios
Return on capital employed- The ROCE of company is
23.08% and shows upward movement of 19% from 19.39%
last year.
Gross Profit margin- GP ratio of company is 26.80 for the
year and has not shown change from last year.
Net Profit margin – NP ratio of Rangemaster is 12.60%
which was 11.21% last year.

Chart
ROCE Net Profit Gross Profit
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Chart Title
Profitability Ratios 2018 Profitability Ratios 2019

Efficiency Ratio
Inventory days - Rangemaster is having inventory days of
74 days that has reduced from 76 days last year.
Debtor days – Collection days of company are 59.86 days
Creditor Days – Payable days of the firm is 40 days with
significant increase from 28 days.

Chart
Inventory Days Debtor Days Creditor Days
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
Chart Title
Efficiency 2018 Efficiency 2019

Capital Structure
Debt equity ratio-
• D/E ratio of Rangemaster is 0.41 and it shows
downward movement of 32% from last year.
• Company has repaid some of its debt in the current year
and has also issued new equity shares for raising the
capital.

Chart
2018 2019
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
Debt Equity

Investor Ratio
Return on Equity - ROE of company is 32.64% that is
higher that than the industry average.
Price earning ratio – P/E ratio of Rangemaster plc is
0.556 which is very low.

Chart
2018 2019
0.00
0.10
0.20
0.30
0.40
0.50
0.60
Chart Title
P/E ROE

CONCLUSION
• From the above report it could be concluded that
financial analysis shows the actual performance and
position of company which is not reflected by the
financial statements.
• Rangemaster is having strong financial performance
and position. Management is using the resources of
company in an efficient manner for generating adequate
returns.

REFERENCE
• Durrah, O., and et.al., N.A., 2016. Exploring the relationship
between liquidity ratios and indicators of financial
performance: An analytical study on food industrial
companies listed in Amman Bursa. International Journal of
Economics and Financial Issues. 6(2).
• Ekpu, V. and Paloni, A., 2016. Business lending and bank
profitability in the UK. Studies in Economics and Finance.
• Kajananthan, R. and Velnampy, T., 2018. Liquidity, Solvency
and Profitability Analysis Using Cash Flow Ratios and
Traditional Ratios: The Telecommunication Sector in Sri
Lanka. Research Journal of Finance and Accounting. 5(23).