Report on Financial Analysis of Primark

Added on - 28 May 2020

  • 29

    pages

  • 4641

    words

  • 8

    views

  • 0

    downloads

Showing pages 1 to 6 of 29 pages
Running head: FINANCIAL ANALYSISFinancial AnalysisName of the StudentName of the UniversityAuthors NoteCourse ID
FINANCIAL ANALYSIS1Executive Summary:The current report will be giving importance on the financial analysis of the Primark. Tobegin with, the examination, the trend analysis of ratios will be used to measure the monetarysituation of Primark for the year 2016. The ratio analysis techniques are put into use to gain adeep understanding of the financial performance of the Primark by facilitating comparisonwith its competitors. Furthermore, a forecast of the profit for 2017 will be explained. Thestudy will further deliver the assessment of the techniques and commendations on thecorporate governance structure will be provided at the end of the report.
FINANCIAL ANALYSIS2Table of ContentsIntroduction:...............................................................................................................................4Business and Financial Situation...............................................................................................4Business Situation:.....................................................................................................................4Financial Position:......................................................................................................................5Profitability and Return:.............................................................................................................6Solvency, Stability and Efficiency Ratios:.................................................................................6Investment and Shareholders Ratio:...........................................................................................7Industry Sector and Competitor Analysis:.................................................................................8Industry Sector...........................................................................................................................8Competitor Analysis:.................................................................................................................9Profitability and Return:.............................................................................................................9Solvency, Stability and Efficiency:............................................................................................9Shareholder and Investment Ratios:.........................................................................................10Financial Strength and Weakness of Primark:.........................................................................10Strengths:..................................................................................................................................10Weakness:................................................................................................................................11Suitable Price ranges:...............................................................................................................11Conclusion and Summary:.......................................................................................................112014 Forecast:..........................................................................................................................12Financial Techniques Evaluation:............................................................................................12
FINANCIAL ANALYSIS3Valuation affecting factors:......................................................................................................13Corporate Governance Structure:.............................................................................................13Reference List:.........................................................................................................................15Appendix:.................................................................................................................................18Primark:....................................................................................................................................18Marks and Spencer...................................................................................................................20H & M Hennes & Mauritz UK Ltd..........................................................................................23Next Ltd...................................................................................................................................25
FINANCIAL ANALYSIS4Introduction:The present report will be placing emphasis on the financial analysis of the Primark.To commence with the analysis, the trend analysis of ratios with the help of ratios is used tomeasure the financial situation of Primark for the year 016. The ratio analysis techniques areput into use to gain an in depth understanding of the financial performance of the Primark byfacilitating comparison with the Next Ltd, H & M Hennes & Mauritz UK ltd, Marks, andSpencer Plc. Apart from this financial strength and weakness of the company will beanalysed. Additionally, by making use of the industry sector index Primark would be rankedin terms of financially on the London Stock Exchange. Furthermore, a forecast of the profitfor 2017 will be explained. The study will further provide the evaluation of the techniquesand recommendations on the corporate governance structure will be provided at the end ofthe report.Business and Financial SituationBusiness Situation:The business of Primark is organized in a manner that they remain close to the marketand customers that is served by the business. Primark is the part of the Associate BritishFoods and they are managed as the five business segments, which collectively combines theindustry expertise, operational ability and the market intelligence (Powers et al., 2014).Considering the business situation, the operational decisions of the company is made locallywith people that have better understanding of the markets. The corporate centre targets toprovide the framework in which the business leaders possess the freedoms and decisionmaking authority to pursue the opportunities having entrepreneurial ability. The businesssituations of Primark reflect that the corporate centre agrees strategy and budgets with thebusiness by closely monitoring the performance.
FINANCIAL ANALYSIS5Financial Position:The financial position of the firm in 2016 reflects that the influence of the Primark inthe UK market is experiencing growth and the company is gaining strength increasingly inthe strong global market with its business operations in UK, Sweden, and USA and in theregions of Middle East (Oulasvirta, 2016). Similarly adjusted earnings per share increased by5 % to 106.2p and the basic earnings per share increased by 55% to 103.4p.Over the years Primark reported a strong year of financial growth and cash generationas the revenue for the company stood 13.3bn pound with a rise of 9% and the adjustedoperating profit of Primark stood 1.185m pound which is up by 10% from the previous year.The net capital investment of the company increased to 600 million pound with a fall in thenet debt to 804m pound (Zeff, 2016). Considering the financial performance in the year 2014,Primark had reported an exceptional year with revenue increasing by 18% and the like forlike sales grew by 6%. The profit of Primark was ahead by 35%.By improving the net profit margin, the company has been successful in strengtheningthe order book that has ultimately increased with lower amount of loans. From the year 2014to 2016 the current liabilities of the company have increased subsequently from 2684 millionto 2960 million. In addition to this the number of employees employed in the company hasgradually increased during this period from 124,000 in 2015.However, in the year 2016 the revenue of the company increased by 5% to 13.3 bnpound and the adjusted before tax stood 1071 which is again up by 5%. On the other hand, in2016 the company gained grounds by reporting a higher operating profit of 1103 with anincrease of 18%.
desklib-logo
You’re reading a preview
card-image

To View Complete Document

Become a Desklib Library Member.
Subscribe to our plans

Unlock This Document