Ratio Analysis of Reckitt Benckiser and Associated British Foods PLC
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Added on 2019-10-12
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This report provides a detailed analysis of the financial performance of Reckitt Benckiser and Associated British Foods PLC, two FMCG companies in the UK. The report covers profitability, liquidity, capital structure, and growth ratios.
Ratio Analysis of Reckitt Benckiser and Associated British Foods PLC
Added on 2019-10-12
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UK FMCG FIRMSRECKITTBENCKISER GROUP PLC ANDASSOCIATED BRITISH FOODS PLCANALYSIS OF RATIOS
Ratio Analysis of Reckitt Benckiser and Associated British Foods PLCEXECUTIVE SUMMARY:FMCG stands for FAST MOVING CONSUMER GOODS. Companies involved in FMCGSector sell their products to consumers through retail market. Consumers purchases thesegoods very frequently, as these fast moving consumer goods have a very short life andrelatively low cost. Fast moving consumer goods include food, beverages, toiletries etc..Here,we have been asked to report on the financial performance of two companies from the UKFMCG Firms. There are too many firms engaged in FMCG Sector bur here, I have choosentwo FMCG Firms one is RECKITT BENKISER and another one is Associated British FoodsPlc.2 | P a g e
Ratio Analysis of Reckitt Benckiser and Associated British Foods PLCTable of ContentsINTRODUCTION OF COMPANIES:..........................................................................................................4RECKITT BENCKISER:..........................................................................................................................4Associated British Foods, PLC:...........................................................................................................4Analysis of the profitability of the Reckitt Benckiser and Associated British Foods PLC:-......................5Gross Profit Ratio:..............................................................................................................................5Net Profit Ratio:.................................................................................................................................5Operating Profit Ratio:.......................................................................................................................6Analysis of Liquidity Position of the company:......................................................................................6Current Ratio:....................................................................................................................................7Acid Test Ratio:..................................................................................................................................7Analysis of Gearing & Capital Structure and Growth Ratios:-................................................................7Debt Ratio:.........................................................................................................................................8Debt Equity Ratio:-............................................................................................................................8Interest Coverage Ratio:....................................................................................................................8Growth Ratio:-.......................................................................................................................................9Price Earning Ratio:............................................................................................................................9Dividend Yield ratio:..........................................................................................................................9Summary of Analysis:-.........................................................................................................................10Weaknesses of the ratios:...................................................................................................................10Conclusion and Recommendations:-...................................................................................................10References:..........................................................................................................................................12Appendix:............................................................................................................................................133 | P a g e
Ratio Analysis of Reckitt Benckiser and Associated British Foods PLCINTRODUCTION OF COMPANIES:RECKITT BENCKISER:Reckitt Benckiser is a British multinational company. It’s headquarter is in Slough, England.Reckitt Benckiser manufactures the products related to health, hygiene and home. It operatesthrough two broader regions one is ENA and another one is DVM. ENA region includesEurope including Russia/CIS and Israel, North America/New Zealand. DVM region includesAfrica, Middle east (Excluding Israel), Turkey, Asia (Excluding Russia/CIS) and LatinAmerica. ENA reported £5830m in 2015 while, DVM reported £2695m. Reckitt BenckiserGroup operates in more than 60 Countries. It sales it’s products in most countries across theworld. (Reckitt Benckiser, 2015)Major products in all the categories i.e. Health, Hygeine, Home includes Strepsils, Durex,Scholl, Gaviscon, Nurofen Express (in Health category). Dettol, Lysol, Harpic, Mortein,Veet, Cillit Bang (in Hygeine Group). Vanish, Life Scents, Air wick, Woolite (in Homecategory). It has total 19 Powerbrands creates 80% of company’s total revenue. Health andHygeine creates 74% of company’s total net revenue in which, health creates 33% of netrevenue while hygiene creates 41% of net revenue. (Reckitt Benckiser, 2015)Associated British Foods, PLC:Associated British Foods PLC is a multinational company. Company’s headquarters are inLondon, United Kingdom. Company’s major operations are in 48 countries across America,Australia, Asia, Southern Africa. Total 124000 employees are employed by this diversifiedgroup. Company reported £12.8bn in 2015. (Associated British Food Plc., 2015)Associated British Foods, PLC operates through different business segments basicallyincludes Grocery, Sugar, Agriculture, Ingredients, Retail . Major brands in which companyoperates its business are KINGSMILL 50 50, Dorset Cereals, Twinings English Breakfast,Jordans. Primark is one of the retailers in Europe that deals in Clothing business includesclothes for Men, Women, Children. Primark entry in new country i.e. France has increasedit’s revenue significantly. (Associated British Food Plc., 2015)4 | P a g e
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