Strategic Financial Analysis - Methods and Contemporary Approaches

The report provides an insight into different methods of strategic financial analysis adopted by business companies for financial evaluation. It includes trend analysis, ratio and DuPont analysis. The report recommends contemporary methods such as EVA, CAPM and efficient market hypothesis for conducting financial analysis to overcome the drawbacks presents in the traditional methods.

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Strategic financial analysis

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Executive Summary
The present report is developed for providing an insight into different methods of
strategic financial analysis adopted by business companies for financial evaluation. This has
been carried out by conducting strategic financial analysis of the two companies that are Booker
and Tata&Lyle. The financial analysis is carried out with the use of trend analysis, ratio and du-
Pont analysis that Booker financial performance is better than that if its competitor Tate&Lyle.
However, it is recommended to the financial managers of both the companies to adopt the use of
contemporary methods such as EVA, CAPM and efficient market hypothesis for conducting
financial analysis to overcome the drawbacks presents in the traditional methods.

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Contents
Executive Summary.........................................................................................................................2
1.0: Introduction..............................................................................................................................4
2.0: Brief Introduction of Two Companies......................................................................................4
3.0: Financial Analysis Method.......................................................................................................5
3.1: Ratio Analysis...........................................................................................................................6
3.1.1: Profitability Ratio Analysis...................................................................................................6
3.1.2: Liquidity Analysis.................................................................................................................8
3.1.3: Efficiency Ratios.................................................................................................................10
3.1.4: Investors Analysis................................................................................................................12
3.2: Common Size Analysis..........................................................................................................14
3.2.1: Vertical – SOPL, SOFP and SOCF.....................................................................................14
3.2.2: Horizontal – SOPL, SOFP and SOCF.................................................................................17
3.3: Du-Pont Analysis of Booker for last five years......................................................................20
4.0: Merits and Demerits of each of analytical methods used to analyse the performance of
company.........................................................................................................................................22
4.1 Ratio Analysis..........................................................................................................................22
4.2 Trend Analysis (Horizontal &Vertical Analysis)....................................................................23
4.3: Du-Pont Analysis....................................................................................................................24
5. Contemporary Methods.............................................................................................................24
5.1 Capital Asset Pricing Model....................................................................................................24
5.2 Economic Value Added (EVA)...............................................................................................24
5.3 Efficient Market Hypothesis....................................................................................................25
6.0: Conclusion and Recommendation..........................................................................................25
7.0: References..............................................................................................................................26
8.0: Appendixes.............................................................................................................................28

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1.0: Introduction
The process of Strategic Financial Analysis (SFA) can be described as the task of
preparing the financial plan for development of business goals and objectives to be achieved.
The financial plan is developed for determining the ways that a business can adopt for achieving
its strategic goals and objectives. It can be regarded as a value-creating framework that helps
senior executives to examine the business strategy, evaluate its performance and thereby valuing
the business. The financial analysis is regarded to be very important for businesses to undertaken
an overview of the financial position of a company that can assist in its future financial planning
process. The financial management decisions help a company to make important investment
decisions regarding its future growth and development. The financial analysis enables a company
to develop adequate financial strategy that results in maximization of shareholder value. The
financial strategy developed though conducting financial evaluation helps a company to gain an
insight into the financial resources possessed for achieving its strategic goals and objectives
(Ehrhardt and Brigham, 2016).
The main objective of the report is to conduct a critical assessment of the principal
method used for analyzing the financial position of a company as an outsider. The method of
financial analysis includes calculation of financial ratios, vertical and horizontal and DuPont
analysis. Also, it intends to present the major drawbacks that re present within the financial
analysis methods and proposed more effective methods that can be sued for overcoming these
drawbacks. The overall financial analysis is carried out by presenting working examples from the
selected listed companies that are Booker Group PLC & Tate &Lyre PLC.
2.0: Brief Introduction of Two Companies
Booker Group PLC is recognized as the largest food wholesale operator within the UK
that is involved in providing both branded and private label goods to about 40,000 customers. It
operates convenience stores, grocers, pubs and restaurants and as such the group comprises of
Booker Wholesale, Booker Direct, Classic Drinks, Family Shopper and many other business
units. The major product of the company includes grocery, fresh food, beers, wines, tobacco and

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alcoholic products. The non-food product items of the company include stationery, furniture,
office equipment and clothing (Booker, 2017).
On the other hand, Tate & Lyle PLC is recognized as a global supplier of food and
beverage ingredients to industrial markets. The company is headquartered within the UK and has
attained a leadership position within the food and beverage industry at a global level with the use
of its innovative technology to transform the raw materials and developing large-scale
manufacturing plants. The high manufacturing capabilities of the company has enabled it to
produce high quality ingredients for the customers. The company aspired to attain a global
position in providing special food ingredients and solutions.
3.0: Financial Analysis Method
Ratio Analysis
The method of ratio analysis has proved to be very effective for gaining an analysis of the
financial position of a company. It is regarded to be a quantitative method of analysis that can be
effectively sued for evaluating different financial aspects of a company such as determination of
its efficiency, liquidity, profitability, solvency and others. The different financial ratios are
calculated with the use of financial information disclosed by a company in its financial
statements.
Vertical Analysis
Vertical analysis can be regarded as a method of comparing the financial statement in
which each line item can be expressed as a percentage of base figures such as income statements
can be expressed as a percentage of gross sales (Gibson, 2008).
Horizontal Analysis
It is also known as trend analysis that involves expressing the financial items in the
financial statements as a percentage of the amount in the baseline year and taking the baseline
amount to be 100%.
DuPont

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The method of financial analysis involves analyzing decomposing the different metrics of
return on equity for assessing the financial performance of a company (Monks and Lajoux,
2010).
3.1: Ratio Analysis
3.1.1: Profitability Ratio Analysis
Net Profit margin
Net profit margin can be described as the amount of profit realized by a company after
meeting all the operational expenses and is calculated as: (Arnold, 2013)
Net Profit Margin=Net Income/Total Revenue
2013 2014 2015 2016 2017
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
1.90%
2.25% 2.48% 2.56% 2.89%
B o o k e r - 5 y e a r s n e t p r o fi t m a r g i n
BK
2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7
1.90%
2.25%
2.48%
2.56%
2.89%
7.83%
8.90%
0.17%
5.14%
9.26%
N et P r o fi t Ma r g in
BK T&L
(Booker, 2013 to 2017) and (Tate & Lyle, 2013 to 2017)

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The comparison of the net profit margin ratio’s of both the companies over the financial
year 2013-2017 have depicted that its net profitability have increased over the selected financial
period. The comparison of the ratio with its competitor Tate &Lyle have revealed that its net
profitability is higher than Booker over the selected financial period. This means that Booker
need to reduce its operational costs for realizing higher profitability for outperforming its
competitors.
Return on Capital Employed
It is a financial ratio that is sued for measuring the profitability and effectiveness of a
company in using the capital base. It is calculated as: (Ackert and Deaves, 2009)
ROCE=Earnings before interest and tax (EBIT)/Capital Employed
2013 2014 2015 2016 2017
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
18.07% 19.74% 21.28% 22.61% 25.18%
B o o k e r - 5 y e a r s r o c e
BK
2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7
18.07%
19.74%
21.28%
22.61%
25.18%
15.19%
12.78%
1.95%
7.07%
11.22%
R OCE
BK T&L
(Booker, 2013 to 2017) and (Tate & Lyle, 2013 to 2017)

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The ratio of the company BK has increased from 2013-2017 stating that its efficiency to
use capital for generating profits is on increase. On the other hand, the ratio of the company Tate
&Lyle is lower in comparison to BK depicting that its efficiency to utilize capital base is not so
effective in comparison to Booker. Booker is having high capital turnover which indicates that it
trades more for each dollar of capital invested. Tate & Lyle has realized a constant decrease in its
ROCE despite of increase in the net profitability which can be linked to its poor management by
the Chief Financial Officer.
3.1.2: Liquidity Analysis
Current Ratio
It measures the ability of a company to meet effectively its financial obligations from the
asset base and can be calculated as: (Moles and Kidwekk, 2011)
Current Ratio=Current Assets/Current Liabilities
2013 2014 2015 2016 2017
0.75
0.80
0.85
0.90
0.95
1.00
1.05
0.87
0.98 0.99
0.95
1.01
Booker - 5 years current ratios
BK

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2013 2014 2015 2016 2017
0.00
0.50
1.00
1.50
2.00
2.50
0.87 0.98 0.99 0.95 1.01
2.31
1.50
1.32
1.63
2.10
Current Ratio
BK
T&L
(Booker, 2013 to 2017) and (Tate & Lyle, 2013 to 2017)
The current ratio of Booker is under 1 over the selected financial period has depicted that
it has not maintained adequate current assets for covering its current liabilities. This indicates
that it not maintain effective liquidity which can pose a financial risk for the company in meeting
its financial obligations. On the other hand, Tate&Lyle have maintained a sufficient liquidity
base as the ratio is higher than 1 over the selected financial period. This indicates lower liquid
financial risk for the company in meeting its future financial obligations. However, the ratio has
depicted a decreasing trend over the financial year 2014-2016 but has increased from the year
2015-2017.
Quick Ratio
It is used for assessing the short-term liquidity position of a company with the most liquid
assets present within a company and is calculated with the use of following formula:
Quick Ratio= (Cash Equivalents + Accounts Receivable)/Current Liabilities

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2013 2014 2015 2016 2017
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0.45
0.50
0.34
0.44 0.45 0.44 0.46
Booker - 5 years quick ratios
BK
2013 2014 2015 2016 2017
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
0.34
0.44 0.45 0.44 0.46
1.44
0.98
0.81
1.03
1.20
Quick Ratio
BK
T&L
(Booker, 2013 to 2017) and (Tate & Lyle, 2013 to 2017)
The quick ratio of Booker is under 0.5 for the selected financial period years and thereby
it can be said that the company has not maintained enough liquid assets for meeting the current
liabilities. On the other hand, Tate &Lyle have maintained a higher quick ratio in comparison to
Booker but have been reduced considerably over the years 2014-2017 depicting that its liquidity
management have experienced a setback which can lead to shortage of liquidity within the
company in future context.
3.1.3: Efficiency Ratios
Day of Sales Outstanding
The ratio is used for assessing the efficiency of a company in collecting the amount of its
credit sales (Madura, 2014). The formula for its calculation is as follows:
Day of Sales Outstanding=Accounts Receivable/Average sales per day

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2013 2014 2015 2016 2017
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
4.95 4.62 5.17
7.17
9.91
B o ok e r - 5 y e ar s D S O
BK
2013 2014 2015 2016 2017
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
4.95 4.62 5.17 7.17
9.91
33
37 37 38
32
Days of Sales Outstanding
BK
T&L
(Booker, 2013 to 2017) and (Tate & Lyle, 2013 to 2017)
The ratio of both the companies is on increase over the financial year 2013-2017 which
cannot be regarded good for the future growth of the companies as it can lead to shortage of cash
flows. However, it can be stated that management of Booker is proper than Tate&Lyle in
collecting the amount of credit sales. This is because Tate&Lyle is collecting the amount due
from the customers in more than 30 days while Booker time period is relatively short of 4-6
days.
Total Asset Turnover ratio
It can be described as an efficiency ratio that depicts the ability of a company to generate
sales from the asset base. The formula for calculation can be stated as follows:
Total asset turnover ratio=Net Sales/Average total assets

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2013 2014 2015 2016 2017
3.60
3.65
3.70
3.75
3.80
3.85
3.90
3.95
4.00
Booker - 5 years Total Asset Turnover Ratio
BK
2013 2014 2015 2016 2017
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
3.90 3.96 3.76 3.75 3.78
1.14 1.05 0.96 0.95 1.03
Total Asset Turnover Ratio
BK
T & L
(Booker, 2013 to 2017) and (Tate & Lyle, 2013 to 2017)
The ratio of the company over the selected financial period has decreased for both the
companies as depicted in the graph above. Booker has maintained a higher ratio as compared to
Tate&Lyle which means that it is utilizing the asset base more effectively for generating sales.
Thus, it can be said that the efficiency position of Booker is better as compared to Tate&Lyle but
it need to take effective steps for improving the ratio as it has depicted a decreasing trend.
3.1.4: Investors Analysis
EPS (Pence)
The ratio is calculated for assessing the amount of profit allocated to each share of
outstanding share and serve as an important indicator of company profitability (Davies and
Crawford, 2011). The formula used for its calculation is stated as follows:
EPS=Net Income/Number of shares outstanding

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2013 2014 2015 2016 2017
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
4.51
6.06
6.73 7.24
8.66
Booker - Earning Per Shares (pence)
BK
2013 2014 2015 2016 2017
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
4.51
6.06
6.73 7.24
8.66
0.59 0.59 0.06 0.35
0.55
EPS (Pence)
BK
T&L
(Booker, 2013 to 2017) and (Tate & Lyle, 2013 to 2017)
It can be stated form analyzing the EPS ratios of both the companies that Booker is
having a higher EPS in comparison to Tate&Lyle. Its EPS ratio has depicted an increasing trend
over the selected financial period which means that company is having good market
performance. On the other hand, Tate&Lyle EPS depict a decreasing trend and also significantly
low mainly due to its poor management.
Dividend Payout Ratio
The ratio is used for depicting the part of earnings realized by a company that is paid to
the shareholders as dividends (Damodaran, 2011). The ratio can be calculated as follows:
Dividend payout ratio=DPS/EPS

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2013 2014 2015 2016 2017
0%
10%
20%
30%
40%
50%
60%
70%
58%
53% 54%
64% 65%
Booker - Dividend Payout Ratio
BK
2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7
58%
53%
54%
64%
65%
38%
45%
47%
433%
80%
Di v i d e n d P a y o u t
BK T&L
(Booker, 2013 to 2017) and (Tate & Lyle, 2013 to 2017)
The dividend payout ratio of Booker has increased over the selected financial period.
However, it has experienced a downfall over the years 2014-2015 but has been subsequently
improved after it. On the contrary, Tate&Lyle has depicted a higher growth in the ratio over the
selected financial period and as such it can be said that it paying more dividend to the
shareholders in comparison to Booker Plc.

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3.2: Common Size Analysis
3.2.1: Vertical – SOPL, SOFP and SOCF
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Booker Tate & Lyle
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
5 Years Vertical : Common Size SOPL(%)
(Booker, 2013 to 2017) and (Tate & Lyle, 2013 to 2017)

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2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Booker Tate & Lyle
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
5 Years Vertical : Common Size SOFP(%)
(Booker, 2013 to 2017) and (Tate & Lyle, 2013 to 2017)

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2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Booker Tate & Lyle
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
5 Years Vertical : Common Size SOCF(%)
(Booker, 2013 to 2017) and (Tate & Lyle, 2013 to 2017)

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3.2.2: Horizontal – SOPL, SOFP and SOCF
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Booker
Tate & Lyle
0.00%
50.00%
100.00%
150.00%
200.00%
250.00%
Revenue
Cost of Sales
Gross profit
Operating Income or loss
Profit before tax
Profit for the year
5 Years Horizontal : Common Size SOPL (%)
(Booker, 2013 to 2017) and (Tate & Lyle, 2013 to 2017)

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2013
2014
2015
2016
2017
2013
2014
2015
2016
2017Booker
Tate & Lyle
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
140.00%
160.00%
180.00%
Total Current Assets
Total Non Current Assets
Total Current Liabilities
Total Non Current Liabilities
Total Equity
5 Years Horizontal : Common Size SOFP (%)
(Booker, 2013 to 2017) and (Tate & Lyle, 2013 to 2017)

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2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
Booker
Tate & Lyle
-200.00%
-100.00%
0.00%
100.00%
200.00%
300.00%
400.00%
Net cash provided by (used in) operating activities
Net cash provided by (used in) financing activities
Cash and cash equivalents at end of year
5 Years Horizontal : Common Size SOCF (%)
(Booker, 2013 to 2017) and (Tate & Lyle, 2013 to 2017)

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3.3: Du-Pont Analysis of Booker for last five years
Du Pont analysis also referred as Du Pont model which uses return on equity as the main
element to assess performance of company in respect to increase the total earnings on equity. As
investors wants entity to provide maximum return on their investment that makes it essential for
the companies to assess return on equity at regular interval. Du Pont model decompose the return
on equity on three main components and they are profit margin, total asset turnover ratio and
financial leverage. It means as per Du Pont model, company can improve the return on equity
through high profit margin, increasing asset turnover ratio and leveraging assets more
effectively.
2013
2014
2015
2016
2017
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00%
7.43%
8.90%
9.30%
9.60%
10.90%
16.75%
18.54%
19.70%
21.51%
25.72%
BK ROA vs ROE
Return on Assets (ROA) Return on Equity (ROE)
2013
2014
2015
2016
2017
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00%
8.96%
9.32%
0.16%
4.86%
9.58%
24.36%
23.49%
0.40%
12.32%
21.60%
T & L ROA vs ROE
Return on Assets (ROA) Return on Equity (ROE)
(Booker, 2013 to 2017) and (Tate & Lyle, 2013 to 2017)
On the basis above graph it is clearly reflected return on equity is much higher than return
on assets in case for both the companies for last five year. It shows that both companies use
maximum part of shareholder’s fund to run their business (Brigham and Michael, 2013).

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2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7
16.75%
18.54%
19.70%
21.51%
25.72%
24.36%
23.49%
0.40%
12.32%
21.60%
Du p o n t - 3 fa c t o r s r o e
BK T&L
Above graph represent shows value of return on equity through using Du Pont 3 factor
model. The division of each component of Du Pont model is provided on below graphs.
2013 2014 2015 2016 2017
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
1.90% 2.25% 2.48% 2.56% 2.89%
7.83%
8.90%
0.17%
5.14%
9.26%
Net Profit Margin
2013 2014 2015 2016 2017
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
3.90 3.96 3.76 3.75 3.78
1.14 1.05 0.96 0.95 1.03
Asset Turnover

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2013 2014 2015 2016 2017
0.00
0.50
1.00
1.50
2.00
2.50
3.00
2.25
2.08 2.12 2.24 2.36
2.72
2.52 2.46 2.53
2.26
Equity Multiplier
(Booker, 2013 to 2017) and (Tate & Lyle, 2013 to 2017)
Booker has very good asset turnover ratio and lower financial leverage while T&L has
lower assets turnover ratio and good financial leverage. Booker has very low net profit margin as
compared to T&L so it is highly suggested to Booker to improve their net profit margin through
reducing the expenses and increase the revenue. It is also recommended to Booker to tighten the
financial leverage through increasing the debt capital and balance both capitals in well balanced
manner. It will help to improve the return on equity in case of Booker Plc (Brigham and Michael,
2013).
4.0: Merits and Demerits of each of analytical methods used to analyse the performance of
company
The financial analysis of both the companies carried out above with the use of ratio,
horizontal, vertical and Du-Pont analysis are also associated with some merits and demerits.
These are discussed as follows:
4.1 Ratio Analysis
Merits
 Simplification of Accounting Statements: The technique helps in simplifying the
accounting statements into simple terms for assessing easily the financial position of a
firm.
 Identification of Problem: It also helps in identification of the problematic area easily by
the management and thus improving the decision-making process.

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 Comparison: It also enables the company in carrying out comparison with other firm’s ad
industry standards which eventually helps the business managers in taking adequately the
long-term decisions.
Demerits
 Lack of Qualitative Information: The major drawback of the method is that it predicts the
future growth potential of a company only by examining the quantitative aspects but has
not carried out qualitative evaluation.
 Lack of Reliability: In addition to this, the ratios are calculated with the use of
information presented in the financial statements which are often subjected to some type
of materialistic error. This can impact the quality of ratio analysis. Also, it provides the
financial results only on the basis of past historical information and as such not very
helpful for reflecting the current financial position of a firm (Bangs, 2010).
4.2 Trend Analysis (Horizontal &Vertical Analysis)
Merits
 Easy Understanding: The major benefit of the method is that it enables the investors and
analyst to gain an insight of the major reason driving the financial performance of a
company.
 Facilitating Comparison of Financial Position of Multiple Companies: The trend analysis
helps the investors to compare the financial position of multiple companies at the same
point of time by analyzing the structural composition of their various financial
instruments such as asset, liabilities, profits and costs (Monks and Lajoux, 2010).
Demerits
 Lack of Reliability: The financial performance analyzed by the use of this technique may
have less reliability due to application of different accounting policies and regulations by
various entities in preparation of their financial reports. As such, the comparison between
the financial performances of two companies can be impacted by the differences in the
accounting policies and procedures.
4.3: Du-Pont Analysis
Merits
 Equity Valuation: The technique is regarded to be high useful for developing an analysis
of the overall financial health of a company in comparison to other equity valuation tools.
It provides an accurate assessment of the significant changes in the ROE of a company
and thus facilitating investors to gain an analysis of the equity returns.
Demerits

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 Limited Accuracy: The model adopts the use of accounting data obtained from the
financial statements that is subjected to manipulation and therefore impacting the
accuracy of the financial outcomes (Ehrhardt, 2013).
5. Contemporary Methods
5.1 Capital Asset Pricing Model
The CAPM (Capital Asset Pricing Model) has made an important contribution towards
the understanding of the capital markets in comparison to other methods of financial analysis.
The model has been constantly used by the corporate finance manager’s to assess the cost of
equity capital. The method has proved to be highly effective for determining the expected returns
on capital investments and its relationship with the risks that need to be undertaken by an
investor. It can be easily applied by the investors or financial managers for taking investment
decisions.
5.2 Economic Value Added (EVA)
The most significant advantage of EVA method over other method of financial analysis is
that it enables investors in taking investment decisions by considering whether a particular
company is worthy of investing by analyzing its goodwill. It measures the performance of a firm
in relation to the value added for the shareholders. It is also relatively easy to be calculated and
los less time-consuming to evaluate the financial performance of a firm in comparison to other
methods of financial analysis such as trend or ratio analysis (Günther, 2014).
5.3 Efficient Market Hypothesis
The model is largely being used by the investors or financial analysts to study the
behavior of share prices of securities within the capital market. The their ha stated that the
current price of an asset fully reflect all the publicly available information and therefore the
market prices of a security quickly absorb all the new information. As such it is not possible for
the investors to realize higher returns by predicting the future income to be realized by a security.
The investors can base their investment decisions on the basis of publicly available information
of the companies (Cope, 2015).

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6.0: Conclusion and Recommendation
It can be stated from the overall analysis carried out that Booker has high potential of
growth as its financial performance is better than Tate& Lyle. The profitability of Booker is
though lower than its competitor Tate& Lyle but yet it is providing higher returns due to its good
turnover position. Tate & Lyle efficiency, liquidity and the return on investment is lower as
compared with Booker. Thus, it is recommended to the investors to invest in Booker for realizing
higher returns in the future period of time. Also, the finance managers of Booker should place
emphasis on improving the company’s operational efficiency by taking measures to reduce the
operational costs that enhances its net profitability position.
7.0: References
Ackert, L. and Deaves, R. 2009. Behavioral Finance: Psychology, Decision-Making, and
Markets. Cengage Learning.
Arnold, G., 2013. Corporate financial management. Pearson Higher Ed.
Bangs, D. 2010. A Crash Course on Financial Statements: Drive More Revenue, Make Better
Business Decisions, Understand the Numbers and What They Mean. Entrepreneur Press.
Booker. 2013. Annual Report 2013. [Online]. Available at:
http://www.annualreports.com/Company/booker-group-plc [Accessed on: 16 December,
2018].

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Booker. 2014. Annual Report 2013. [Online]. Available at:
http://www.annualreports.com/Company/booker-group-plc [Accessed on: 16 December,
2018].
Booker. 2015. Annual Report 2013. [Online]. Available at:
http://www.annualreports.com/Company/booker-group-plc [Accessed on: 16 December,
2018].
Booker. 2016. Annual Report 2013. [Online]. Available at:
http://www.annualreports.com/Company/booker-group-plc [Accessed on: 16 December,
2018].
Booker. 2017. Annual Report 2013. [Online]. Available at:
http://www.annualreports.com/Company/booker-group-plc [Accessed on: 16 December,
2018].
Brigham, F., and Michael C. 2013. Financial management: Theory & practice. Cengage
Learning.
Cope, A. 2015. International Financial Statement Analysis. John Wiley & Sons.
Damodaran, A, 2011. Applied corporate finance. John Wiley & sons.
Davies, T. and Crawford, I., 2011. Business accounting and finance. Pearson.
Ehrhardt, M. 2013. Corporate Finance: A Focused Approach. Cengage Learning.
Ehrhardt, M. and Brigham, E. 2016. Corporate Finance: A Focused Approach. Cengage
Learning.
Gibson, C. 2008. Financial Reporting and Analysis: Using Financial Accounting Information.
Cengage Learning.
Günther, M. 2014. A Study on the Integrated Approach of Shareholder Value Analysis.
diplom.de.

28
Madura, J. 2014. Financial Markets and Institutions. Cengage Learning.
Moles, P. and Kidwekk, D. 2011. Corporate finance. John Wiley &sons.
Monks, R. and Lajoux, A. 2010. Corporate Valuation for Portfolio Investment: Analyzing Assets,
Earnings, Cash Flow, Stock Price, Governance, and Special Situations. John Wiley & Sons.
Tate & Lyle. 2013. Annual Report 2013. [Online]. Available at:
https://www.tateandlyle.com/investors/annual-reports [Accessed on: 16 December, 2018].
Tate & Lyle. 2014. Annual Report 2013. [Online]. Available at:
https://www.tateandlyle.com/investors/annual-reports [Accessed on: 16 December, 2018].
Tate & Lyle. 2015. Annual Report 2013. [Online]. Available at:
https://www.tateandlyle.com/investors/annual-reports [Accessed on: 16 December, 2018].
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https://www.tateandlyle.com/investors/annual-reports [Accessed on: 16 December, 2018].
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https://www.tateandlyle.com/investors/annual-reports [Accessed on: 16 December, 2018].

29
8.0: Appendixes
Appendix 1: Financial Statement of both Companies
Name of the Company: BOOKER GROUP
PLC
Abbreviation BK
Last Financial Year Analyzed: 2017
BOOKER GROUP PLC INCOME STATEMENT
Particulars 2013 2014 2015 2016 2017
Total Revenue 3,992.20 4,681.60 4,753.00 4,991.50 5,327.90
Cost of Sales (3,832.80
)
(4,475.40
)
(4,524.80
)
(4,737.90
)
(5,036.00
)
Gross Profit 159.40 206.20 228.20 253.60 291.90
Operating Expenses
Administrative and general Expenses (64.50) (82.40) (87.90) (100.80) (115.80)
Other Operating Expenses - - - -
Operating Income or Loss 94.90 123.80 140.30 152.80 176.10
Finance Income - - 0.50 0.60 0.40
Earnings Before Interest And Taxes 94.90 123.80 140.80 153.40 176.50
Finance Cost

30
(2.80) (1.70) (2.00) (2.60) (2.50)
Profit Before Tax 92.10 122.10 138.80 150.80 174.00
Income Tax Expenses (16.10) (16.90) (21.10) (23.00) (20.20)
Profit (loss) for the year 76.00 105.20 117.70 127.80 153.80
- - - -
Profit Attributable to the owners of the Group 76.00 105.20 117.70 127.80 153.80
BOOKER GROUP PLC STATEMENTS OF FINANCIAL POSITION
Particulars 2012 2013 2014 2015 2016 2017
Assets
Current Assets
Inventories 268.50 267.10 327.60 328.10 354.10 397.00
Trade Receivables, Net 50.10 58.10 60.30 74.40 121.60 167.80
Other Receivables 31.60 38.50 53.30 50.10 59.30 0.00
Other Current Assets 0.00 0.00 0.00 0.00 0.00 0.00
Available-for-sale financial
assets 0.00 0.00 0.00 0.00 0.00 0.00
Derivative financial
instruments 0.00 0.00 0.00 0.00 0.00 0.00
Other financial assets 0.00 0.00 0.00 0.00 0.00 0.00
Cash And Cash
Equivalents 63.50 77.20 149.60 147.00 127.40 160.70
Total current asset 413.70 440.90 590.80 599.60 662.40 725.50

31
Non-Current Assets
Property Plant and
Equipment 71.90 71.90 204.50 207.10 229.80 216.40
Available for sale financial
assets 0.00 0.00 0.00 0.00 0.00 0.00
Derivative financial
instruments 0.00 0.00 0.00 0.00 0.00 0.00
Intangible Asset 437.10 436.90 438.70 439.80 466.70 465.60
Trade and other receivables 0.00 0.00 0.00 0.00 0.00 0.00
Retirement benefit surplus 0.00 0.00 0.00 0.00 0.00 0.00
Investment In Associates 0.00 0.00 0.00 0.00 0.00 0.00
Investment In Joint
Venture 0.50 0.60 1.10 1.40 1.50 1.60
Other Investment 0.00 144.90 0.00 0.00 0.00 0.00
Deferred Tax Assets 13.30 13.50 20.10 28.10 25.30 27.40
Total non-current asset 522.80 667.80 664.40 676.40 723.30 711.00
TOTAL ASSETS 936.50 1108.70 1255.20 1276.00 1385.70 1436.50
Liabilities
Current Liabilities
Trade Payables 420.40 428.10 496.20 505.40 573.30 699.80
Other Payables 51.40 58.40 90.00 80.60 104.60 0.00
Loans And Borrowings 0.10 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00
Tax Liabilities 15.20 21.20 15.80 19.90 21.20 21.30
Total current liability 487.10 507.70 602.00 605.90 699.10 721.10

32
Non-Current Liabilities
Loans and Borrowings 0.00 0.00 0.00 0.00 0.00 0.00
Other payables 28.20 28.00 27.50 26.90 26.00 25.00
Derivative financial
instrument 0.00 0.00 0.00 0.00 0.00 0.00
Retirement benefit
liabilities 19.00 6.80 3.60 19.70 29.60 46.90
Provisions 32.80 28.10 25.50 25.40 40.80 37.90
Deferred Tax Liabilities
Total non-current
liability 80.00 62.90 56.60 72.00 96.40 109.80
Total Liability 567.10 570.60 658.60 677.90 795.50 830.90
Equity
Share capital 15.70 17.30 17.40 17.60 17.70 17.80
Share premium 49.10 34.90 36.40 41.20 44.00 7.60
Merger reserve 260.80 260.80 260.80 260.80 260.80 260.80
Capital redemption reserve 0.00 0.00 0.00 60.90 122.80 179.50
Other reserves 0.00 136.80 136.80 75.80 14.00
Share option reserve 3.80 6.60 8.50 11.20 12.40 13.10
Retained earnings 40.00 81.70 136.70 130.60 118.50 126.80
Total Equity 369.40 538.10 596.60 598.10 590.20 605.60
TOTAL LIABILITIES &
EQUITY 936.50 1108.70 1255.20 1276.00 1385.70 1436.50

33
BOOKER GROUP PLC CASH FLOW STATEMENT
Particulars 2013 2014 2015 2016 2017
Net cash provided by (used in) operating activities 85.70 126.20 134.60 175.10 177.50
Net cash provided by (used in) investment activities (34.90) (8.80) (24.40) (70.50) (11.20)
Net cash provided by (used in) financing activities (37.10) (45.00) (112.80) (124.20) (133.00)
Increase (decrease) in cash and cash equivalents 13.70 72.40 (2.60) (19.60) 33.30
Cash and cash equivalents at beginning of year 63.50 77.20 149.60 147.00 127.40
Cash and cash equivalents at end of year 77.20 149.60 147.00 127.40 160.70
Other Information
Particulars 2012 2013 2014 2015 2016 2017
Capital employed
44
9.40
601.
00
653.
20
670.
10
686.
60
715.
40
Average capital
employed
525.
20
627.
10
661.
65
678.
35
701.
00
EPS 4.83
4
.51
6
.06
6
.73
7
.24
8
.66
Dividend per share
(pence) 2.28 2.63 3.20 3.66 4.60 5.60
Share price $
84.25
$
121.55
$
166.70
$
147.70
$
163.50
$

34
229.00
Average Receivables 54.10 59.20 67.35 98.00 144.70
Average total assets 1022.60 1181.95 1265.60 1330.85 1411.10
Weighted Average Number of Shares (WANS) 1,551.40 1,684.30 1,735.90 1,748.10 1,765.20 1,775.70
Average Equity 453.75 567.35 597.35 594.15 597.90
Competitor: TATE &
LYLE
Abbreviation T&L
Last Financial Year Analyzed 2017
TATE & LYLE INCOME STATEMENT
Particulars 2013 2014 2015 2016 2017
Total Revenue 3,256.
00
2,754.
00
2,341.
00
2,355.
00
2,753.
00
Cost of Sales (2,281.
00)
(1,927.
00)
(1,515.
00)
(1,471.
00)
(1,704.
00)
Gross Profit 975.00 827.00 826.00 884.00 1,049.
00
Operating Expenses
Other operating &
Selling Expenses (429.0
0)
(388.0
0)
(475.0
0)
(480.0
0)
(496.0
0)
Other Operating

35
Expenses (212.0
0)
(188.0
0)
(318.0
0)
(277.0
0)
(320.0
0)
Operating Income or Loss 334.00 251.00 33.00 127.00 233.00
Finance income 1.00 2.00 1.00 1.00 2.00
Earnings Before Interest And Taxes 335.00 253.00 34.00 128.00 235.00
Finance Cost (34.00) (37.00) (32.00) (30.00) (34.00)
Share of profit after tax
of joint ventures and
associates - 61.00 23.00 28.00 32.00
Profit Before Tax 301.00 277.00 25.00 126.00 233.00
Income Tax Expense (46.00) (32.00) (21.00) (5.00) 22.00
Profit for the year from continuing operation 255.00 245.00 4.00 121.00 255.00
Profit for the year
from discontinued
operations 18.00 28.00 26.00 42.00 1.00
Profit Attributable to T&L Shareholders 273.00 273.00 30.00 163.00 256.00
TATE & LYLE STATEMENTS OF FINANCIAL POSITION
Particulars 2012 2013 2014 2015 2016 2017
Assets
Current Assets
Inventories

36
450.0
0 510.00 372.00 363.00 389.00 441.00
Trade
Receivables, Net 264.0
0 330.00 231.00 248.00 238.00 250.00
Other
Receivables 68.00 53.00 34.00 42.00 63.00 41.00
Current Tax
Assets 3.00 4.00 1.00 2.00 3.00 1.00
Available-for-
sale financial
assets - - - 16.00 4.00 -
Derivative
financial
instruments 80.00 86.00 78.00 62.00 43.00 31.00
Other financial
assets - - - 2.00 - -
Cash And cash
equivalent 424.0
0 379.00 346.00 195.00 317.00 261.00
Total current
asset 1,289
.00
1,362.
00
1,062.
00 930.00 1,057.
00
1,025.
00
Asset held for
sale 100.0
0 1.00 - - 7.00 -
Non-Current Assets
Property Plant
and Equipment 922.0
0 958.00 732.00 750.00 926.00
1,061.
00
Available for
sale financial 23.00 27.00 28.00 15.00 19.00 30.00

37
assets
Derivative
financial
instruments 57.00 54.00 23.00 30.00 21.00 15.00
Goodwill &
Intangible Asset 325.0
0 356.00 307.00 340.00 390.00 401.00
Trade and other
receivables 2.00 3.00 - 2.00 1.00 1.00
Retirement
benefit surplus
146.0
0 12.00 - 25.00 45.00 120.00
Investment In
Associates 5.00 6.00 4.00 4.00 3.00 4.00
Investment In
Joint Venture - - 308.00 323.00 82.00 92.00
Other
Investment -
Deferred Tax
Assets 37.00 8.00 4.00 4.00 3.00 22.00
Total non-
current assets 1,517
.00
1,424.
00
1,406.
00
1,493.
00
1,490.
00
1,746.
00
TOTAL
ASSETS 2,906
.00
2,787.
00
2,468.
00
2,423.
00
2,554.
00
2,771.
00
Liabilities
Current Liabilities
Trade Payables 256.0
0 264.00 198.00 228.00 218.00 185.00

38
Other Payables 126.0
0 118.00 85.00 88.00 119.00 130.00
Loans And
Borrowings
141.0
0 75.00 323.00 305.00 200.00 88.00
Derivative
financial
instruments
94.00
60.00 49.00 25.00 22.00 17.00
Provisions for
other liabilities
and charges
10.00
20.00 13.00 13.00 23.00 10.00
Tax Liabilities 49.00 53.00 38.00 45.00 66.00 57.00
676.0
0 590.00 706.00 704.00 648.00 487.00
Liabilities held
for sale 15.00 0.00 0.00 0.00 2.00 0.00
Total current
liability
691.0
0 590.00 706.00 704.00 650.00 487.00
Non-Current Liabilities
Loans and
Borrowings
805.0
0 821.00 437.00 463.00 556.00 604.00
Other Liabilities 4.00 3.00 2.00 13.00 13.00 10.00
Derivative
financial
instrument
19.00
21.00 2.00 15.00 19.00 37.00
Retirement
benefit deficit
286.0
0 277.00 220.00 252.00 253.00 259.00
Provision for
others liability
and charges
18.00
15.00 9.00 8.00 13.00 17.00
Deferred Tax
Liabilities 25.00 24.00 42.00 32.00 21.00 25.00

39
Total Non-
Current
Liabilities
1,157
.00
1,161.
00 712.00 783.00 875.00 952.00
Total Liability 1,848
.00
1,751.
00
1,418.
00
1,487.
00
1,525.
00
1,439.
00
Equity
Share Capital 117.0
0 117.00 117.00 117.00 117.00 117.00
Share premium 406.0
0 406.00 406.00 406.00 406.00 406.00
Merger reserve 0.00 0.00 0.00 0.00 0.00 0.00
Capital
redemption
interest
8.00
8.00 8.00 8.00 8.00 8.00
Other reserves
128.0
0 139.00 58.00 61.00 127.00 253.00
Share option
reserve 0.00 0.00 0.00 0.00 0.00 0.00
Retained
earnings
374.0
0 366.00 460.00 343.00 370.00 548.00
Non controlling
interest 25.00 0.00 1.00 1.00 1.00 0.00
Total Equity 1,058
.00
1,036.
00
1,050.
00 936.00 1,029.
00
1,332.
00
TOTAL
LIABILITIES
& EQUITY
2,906
.00
2,787.
00
2,468.
00
2,423.
00
2,554.
00
2,771.
00

40
TATE & LYLE CASH FLOW STATEMENT
Particulars 2013 2014 2015 2016 2017
Net cash provided by (used in) operating
activities 251.00 286.00 179.00 188.00 298.00
Net cash provided by (used in) investment
activities (83.00) (21.00)
(164.0
0) 86.00
(114.0
0)
Net cash provided by (used in) financing
activities (236.0
0)
(197.0
0)
(185.0
0)
(166.0
0)
(272.0
0)
Increase (decrease) in cash and cash
equivalents (68.00) 68.00 (170.0
0) 108.00 (88.00)
Cash and cash equivalents at beginning of year 446.00 305.00 346.00 195.00 317.00
Effect of changes in foreign exchange 1.00 (27.00) 19.00 14.00 32.00
Cash and cash equivalents at end of year 379.00 346.00 195.00 317.00 261.00
Other Information
Particulars 2012 2013 2014 2015 2016 2017
Capital employed
2,215
.00
2,197.
00
1,762.
00
1,719.
00
1,904.
00
2,284.
00
Average capital
employed
2,206.
00
1,979.
50
1,740.
50
1,811.
50
2,094.
00
EPS 66.35 58.81 58.82 6.46 35.11 55.16

41
Dividend per share
(pence) 24.90 26.20 27.60 28.00 28.00 28.00
Share price
$
705.0
0
$
850.00
$
667.50
$
597.50
$
578.00
$
703.00
Average Receivables 297.00 280.50 239.50 243.00 244.00
Average total assets 2,846.
50
2,627.
50
2,445.
50
2,488.
50
2,662.
50
Weighted Average Number of Shares
(WANS) 465.7
0 464.20 464.10 464.20 464.30 464.1
Average Equity 1,047.
00
1,043.
00 993.00 982.50 1,180.
50
Appendix 2: Vertical Analysis of both companies
BOOKER GROUP PLC
Common Size Income Statement (as a % of sales)
Vertical Analysis Income Statement for BK
Particulars 2013 2014 2015 2016 2017
Total Revenue 100.00
%
100.00
%
100.00
%
100.00
%
100.00
%
Cost of Sales
-
96.01
%
-
95.60
%
-
95.20
%
-
94.92
%
-
94.52
%
Gross Profit 3.99% 4.40% 4.80% 5.08% 5.48%
Operating Expenses

42
Administrative and
general Expenses
-
1.62%
-
1.76%
-
1.85%
-
2.02%
-
2.17%
Other Operating
Expenses 0.00% 0.00% 0.00% 0.00% 0.00%
Operating Income or
Loss 2.38% 2.64% 2.95% 3.06% 3.31%
Finance Income 0.00% 0.00% 0.01% 0.01% 0.01%
Earnings Before Interest
And Taxes 2.38% 2.64% 2.96% 3.07% 3.31%
Finance Cost -
0.07%
-
0.04%
-
0.04%
-
0.05%
-
0.05%
Profit Before Tax 2.31% 2.61% 2.92% 3.02% 3.27%
Income Tax
Expenses
-
0.40%
-
0.36%
-
0.44%
-
0.46%
-
0.38%
Profit (loss) for the year 1.90% 2.25% 2.48% 2.56% 2.89%
Profit Attributable to
the owners of the Group 1.90% 2.25% 2.48% 2.56% 2.89%
BOOKER GROUP PLC
Common Size Statements of financial position (as a % of total assets)
Vertical Analysis Balance Sheet for BK
Particulars 2013 2014 2015 2016 2017
Assets
Current Assets
Inventories 24.09
%
26.10
%
25.71
%
25.55
%
27.64
%
Trade Receivables, 5.24% 4.80% 5.83% 8.78% 11.68

43
Net %
Other Receivables 3.47% 4.25% 3.93% 4.28% 0.00%
Other Current
Assets 0.00% 0.00% 0.00% 0.00% 0.00%
Available-for-sale
financial assets 0.00% 0.00% 0.00% 0.00% 0.00%
Derivative financial
instruments 0.00% 0.00% 0.00% 0.00% 0.00%
Other financial
assets 0.00% 0.00% 0.00% 0.00% 0.00%
Cash And Cash
Equivalents 6.96% 11.92
%
11.52
% 9.19% 11.19
%
Total current asset 39.77
%
47.07
%
46.99
%
47.80
%
50.50
%
Non-Current Assets
Property Plant and
Equipment 6.49% 16.29
%
16.23
%
16.58
%
15.06
%
Available for sale
financial assets 0.00% 0.00% 0.00% 0.00% 0.00%
Derivative financial
instruments 0.00% 0.00% 0.00% 0.00% 0.00%
Intangible Asset 39.41
%
34.95
%
34.47
%
33.68
%
32.41
%
Trade and other
receivables 0.00% 0.00% 0.00% 0.00% 0.00%
Retirement benefit
surplus 0.00% 0.00% 0.00% 0.00% 0.00%
Investment In
Associates 0.00% 0.00% 0.00% 0.00% 0.00%
Investment In Joint
Venture 0.05% 0.09% 0.11% 0.11% 0.11%

44
Other Investment 13.07
% 0.00% 0.00% 0.00% 0.00%
Deferred Tax
Assets 1.22% 1.60% 2.20% 1.83% 1.91%
Total non-current
asset
60.23
%
52.93
%
53.01
%
52.20
%
49.50
%
TOTAL ASSETS 100.00
%
100.00
%
100.00
%
100.00
%
100.00
%
Liabilities
Current Liabilities
Trade Payables 44.89
%
38.61
%
39.53
%
39.61
%
41.37
%
Other Payables 5.49% 5.27% 7.17% 6.32% 7.55%
Loans And
Borrowings 0.01% 0.00% 0.00% 0.00% 0.00%
Tax Liabilities 1.62% 1.91% 1.26% 1.56% 1.53%
Total Current
Liabilities
52.01
%
45.79
%
47.96
%
47.48
%
50.45
%
Non-Current Liabilities
Loans and
Borrowings 0.00% 0.00% 0.00% 0.00% 0.00%
Other payables 3.01% 2.53% 2.19% 2.11% 1.88%
Derivative financial
instrument 0.00% 0.00% 0.00% 0.00% 0.00%

45
Retirement benefit
liabilities 2.03% 0.61% 0.29% 1.54% 2.14%
Provisions 3.50% 2.53% 2.03% 1.99% 2.94%
Deferred Tax
Liabilities 0.00% 0.00% 0.00% 0.00% 0.00%
Total Non
Current Liabilities 8.54% 5.67% 4.51% 5.64% 6.96%
Total Liability 60.56
%
51.47
%
52.47
%
53.13
%
57.41
%
Equity
Share capital 1.68% 1.56% 1.39% 1.38% 1.28%
Share premium 5.24% 3.15% 2.90% 3.23% 3.18%
Merger reserve 27.85
%
23.52
%
20.78
%
20.44
%
18.82
%
Capital redemption
reserve 0.00% 0.00% 0.00% 4.77% 8.86%
Other reserves 0.00% 12.34
%
10.90
% 5.94% 1.01%
Share option
reserve 0.41% 0.60% 0.68% 0.88% 0.89%
Retained earnings 4.27% 7.37% 10.89
%
10.24
% 8.55%
Total Equity 39.44
%
48.53
%
47.53
%
46.87
%
42.59
%
TOTAL
LIABILITIES &
100.00
%
100.00
%
100.00
%
100.00
%
100.00
%

46
EQUITY
BOOKER GROUP PLC
Common Size Cash Flow Statement (as a % of Net Sales)
Vertical Analysis Cash Flow Statement for BK
Particulars 2013 2014 2015 2016 2017
Net cash provided by (used in) operating
activities 2.15% 2.70% 2.83% 3.51% 3.33%
Net cash provided by (used in) investment
activities
-
0.87%
-
0.19%
-
0.51%
-
1.41%
-
0.21%
Net cash provided by (used in) financing
activities
-
0.93%
-
0.96%
-
2.37%
-
2.49%
-
2.50%
Increase (decrease) in cash and cash
equivalents 0.34% 1.55% -
0.05%
-
0.39% 0.63%
Cash and cash equivalents at beginning of year 1.59% 1.65% 3.15% 2.95% 2.39%
Cash and cash equivalents at end of year 1.93% 3.20% 3.09% 2.55% 3.02%
TATE & LYLE
Common Size Income Statement (as a % of sales)
Vertical Analysis Income Statement for T&L
Particulars 2013 2014 2015 2016 2017
Total Revenue 100.0
0%
100.0
0%
100.0
0%
100.0
0%
100.0
0%
Cost of Sales -
70.06
-
69.97
-
64.72
-
62.46
-
61.90

47
% % % % %
Gross Profit 29.94
%
30.03
%
35.28
%
37.54
%
38.10
%
Operating Expenses
Other operating & Selling
Expenses
-
13.18
%
-
14.09
%
-
20.29
%
-
20.38
%
-
18.02
%
Other Operating
Expenses
-
6.51%
-
6.83%
-
13.58
%
-
11.76
%
-
11.62
%
Operating Income
or Loss
10.26
% 9.11% 1.41% 5.39% 8.46%
Finance income 0.03% 0.07% 0.04% 0.04% 0.07%
Earnings Before
Interest And Taxes
10.29
% 9.19% 1.45% 5.44% 8.54%
Finance Cost -
1.04%
-
1.34%
-
1.37%
-
1.27%
-
1.24%
Share of profit after tax
of joint ventures and
associates
0.00% 2.21% 0.98% 1.19% 1.16%
Profit Before Tax 9.24% 10.06
% 1.07% 5.35% 8.46%
Income Tax Expense -
1.41%
-
1.16%
-
0.90%
-
0.21% 0.80%
Profit for the year
from continuing
operation
7.83
%
8.90
%
0.17
%
5.14
%
9.26
%
Profit for the year
from discontinued
operations
0.55% 1.02% 1.11% 1.78% 0.04%
Profit Attributable 8.38 9.91 1.28 6.92 9.30

48
to T&L
Shareholders % % % % %
TATE & LYLE
Common Size Statements of financial position (as a % of total assets)
Vertical Analysis Balance Sheet for T&L
Particulars 2013 2014 2015 2016 2017
Assets
Current Assets
Inventories 18.30
%
15.07
%
14.98
%
15.23
%
15.91
%
Trade Receivables, Net 11.84
% 9.36% 10.24
% 9.32% 9.02%
Other Receivables 1.90% 1.38% 1.73% 2.47% 1.48%
Current Tax Assets 0.14% 0.04% 0.08% 0.12% 0.04%
Available-for-sale
financial assets 0.00% 0.00% 0.66% 0.16% 0.00%
Derivative financial
instruments 3.09% 3.16% 2.56% 1.68% 1.12%
Other financial assets 0.00% 0.00% 0.08% 0.00% 0.00%
Cash And cash equivalent 13.60
%
14.02
% 8.05% 12.41
% 9.42%
Total current asset 48.87
%
43.03
%
38.38
%
41.39
%
36.99
%
Asset held for sale 0.04% 0.00% 0.00% 0.27% 0.00%
Non-Current Assets
Property Plant and
Equipment
34.37
%
29.66
%
30.95
%
36.26
%
38.29
%
Available for sale 0.97% 1.13% 0.62% 0.74% 1.08%

49
financial assets
Derivative financial
instruments 1.94% 0.93% 1.24% 0.82% 0.54%
Goodwill & Intangible
Asset
12.77
%
12.44
%
14.03
%
15.27
%
14.47
%
Trade and other
receivables 0.11% 0.00% 0.08% 0.04% 0.04%
Retirement benefit
surplus 0.43% 0.00% 1.03% 1.76% 4.33%
Investment In Associates 0.22% 0.16% 0.17% 0.12% 0.14%
Investment In Joint
Venture 0.00% 12.48
%
13.33
% 3.21% 3.32%
Other Investment 0.00% 0.00% 0.00% 0.00% 0.00%
Deferred Tax Assets 0.29% 0.16% 0.17% 0.12% 0.79%
Total non-current asset 51.09
%
56.97
%
61.62
%
58.34
%
63.01
%
TOTAL ASSETS 100.0
0%
100.0
0%
100.0
0%
100.0
0%
100.0
0%
Liabilities
Current Liabilities
Trade Payables 9.47% 8.02% 9.41% 8.54% 6.68%
Other Payables 4.23% 3.44% 3.63% 4.66% 4.69%
Loans And Borrowings 2.69% 13.09
%
12.59
% 7.83% 3.18%
Derivative financial
instruments 2.15% 1.99% 1.03% 0.86% 0.61%
Provisions for other
liabilities and charges 0.72% 0.53% 0.54% 0.90% 0.36%
Tax Liabilities 1.90% 1.54% 1.86% 2.58% 2.06%

50
21.17
%
28.61
%
29.05
%
25.37
%
17.57
%
Liabilities held for sale 0.00% 0.00% 0.00% 0.08% 0.00%
Total current liability 21.17
%
28.61
%
29.05
%
25.45
%
17.57
%
Non-Current Liabilities
Loans and Borrowings 29.46
%
17.71
%
19.11
%
21.77
%
21.80
%
Other Liabilities 0.11% 0.08% 0.54% 0.51% 0.36%
Derivative financial
instrument 0.75% 0.08% 0.62% 0.74% 1.34%
Retirement benefit deficit 9.94% 8.91% 10.40
% 9.91% 9.35%
Provision for others
liability and charges 0.54% 0.36% 0.33% 0.51% 0.61%
Deferred Tax Liabilities 0.86% 1.70% 1.32% 0.82% 0.90%
Total Non Current
Liabilities
41.66
%
28.85
%
32.32
%
34.26
%
34.36
%
Total Liability 62.83
%
57.46
%
61.37
%
59.71
%
51.93
%
Equity
Share Capital 4.20% 4.74% 4.83% 4.58% 4.22%
Share premium 14.57
%
16.45
%
16.76
%
15.90
%
14.65
%
Merger reserve 0.00% 0.00% 0.00% 0.00% 0.00%
Capital redemption
interest 0.29% 0.32% 0.33% 0.31% 0.29%
Other reserves 4.99% 2.35% 2.52% 4.97% 9.13%

51
Share option reserve 0.00% 0.00% 0.00% 0.00% 0.00%
Retained earnings
13.13
%
18.64
%
14.16
%
14.49
%
19.78
%
Non controlling interest 0.00% 0.04% 0.04% 0.04% 0.00%
Total Equity 37.17
%
42.54
%
38.63
%
40.29
%
48.07
%
TOTAL LIABILITIES
& EQUITY
100.0
0%
100.0
0%
100.0
0%
100.0
0%
100.0
0%
Table 31 Vertical Analysis Balance
Sheet for T&L
TATE & LYLE
Common Size Cash Flow Statement (as a % of Net Sales)
Vertical Analysis Cash Flow Statement for T&L
Particulars 2013 2014 2015 2016 2017
Net cash provided by (used in) operating
activities 7.71% 10.38
% 7.65% 7.98% 10.82
%
Net cash provided by (used in) investment
activities
-
2.55%
-
0.76%
-
7.01% 3.65% -
4.14%
Net cash provided by (used in) financing
activities
-
7.25%
-
7.15%
-
7.90%
-
7.05%
-
9.88%
Increase (decrease) in cash and cash
equivalents
-
2.09
%
2.47
%
-
7.26
%
4.59
%
-
3.20
%
Cash and cash equivalents at beginning of year 13.70
%
11.07
%
14.78
% 8.28% 11.51
%
Effect of changes in foreign exchange 0.03% - 0.81% 0.59% 1.16%

52
0.98%
Cash and cash equivalents at end of year 11.64
%
12.56
%
8.33
%
13.46
%
9.48
%

53
Appendix 3: Horizontal Analysis
BOOKER GROUP PLC
Common Size Income Statement
Horizontal Analysis Income Statement for BK
Particulars 2013 2014 2015 2016 2017
Total Revenue 100.00
%
117.27
%
119.06
%
125.03
%
133.46
%
Cost of Sales 100.00
%
116.77
%
118.05
%
123.61
%
131.39
%
Gross Profit 100.00
%
129.36
%
143.16
%
159.10
%
183.12
%
Operating Expenses
Administrative and
general Expenses
100.00
%
127.75
%
136.28
%
156.28
%
179.53
%
Other Operating
Expenses
Operating Income or
Loss
100.00
%
130.45
%
147.84
%
161.01
%
185.56
%
Finance Income 100.00
%
120.00
%
80.00
%
Earnings Before Interest
And Taxes
100.00
%
130.45
%
148.37
%
161.64
%
185.99
%
Finance Cost 100.00
%
60.71
%
71.43
%
92.86
%
89.29
%
Profit Before Tax 100.00
%
132.57
%
150.71
%
163.74
%
188.93
%
Income Tax
Expenses
100.00
%
104.97
%
131.06
%
142.86
%
125.47
%

54
Profit (loss) for the year 100.00
%
138.42
%
154.87
%
168.16
%
202.37
%
Profit Attributable to
the owners of the Group
100.00
%
138.42
%
154.87
%
168.16
%
202.37
%
BOOKER GROUP PLC
Common Size Statements of financial position
Horizontal Analysis Balance Sheet for BK
Particulars 2013 2014 2015 2016 2017
Assets
Current Assets
Inventories 100.00
%
122.65
%
122.84
%
132.57
%
148.63
%
Trade Receivables,
Net
100.00
%
103.79
%
128.06
%
209.29
%
288.81
%
Other Receivables 100.00
%
138.44
%
130.13
%
154.03
% 0.00%
Other Current
Assets
Available-for-sale
financial assets
Derivative financial
instruments
Other financial
assets
Cash And Cash
Equivalents
100.00
%
193.78
%
190.41
%
165.03
%
208.16
%
Total current
asset
100.00
%
134.00
%
135.99
%
150.24
%
164.55
%

55
Non-Current Assets
Property Plant and
Equipment
100.00
%
284.42
%
288.04
%
319.61
%
300.97
%
Available for sale
financial assets
Derivative financial
instruments
Intangible Asset 100.00
%
100.41
%
100.66
%
106.82
%
106.57
%
Trade and other
receivables
Retirement benefit
surplus
Investment In
Associates
Investment In Joint
Venture
100.00
%
183.33
%
233.33
%
250.00
%
266.67
%
Other Investment 100.00
% 0.00% 0.00% 0.00% 0.00%
Deferred Tax
Assets
100.00
%
148.89
%
208.15
%
187.41
%
202.96
%
Total non-current
asset
100.00
%
99.49
%
101.29
%
108.31
%
106.47
%
TOTAL ASSETS 100.00
%
113.21
%
115.09
%
124.98
%
129.57
%
Liabilities
Current Liabilities
Trade Payables 100.00
%
115.91
%
118.06
%
133.92
%
163.47
%

56
Other Payables 100.00
%
154.11
%
138.01
%
179.11
% 0.00%
Loans And
Borrowings
Tax Liabilities 100.00
%
74.53
%
93.87
%
100.00
%
100.47
%
Total Current
Liabilities
100.00
%
118.57
%
119.34
%
137.70
%
142.03
%
Non-Current Liabilities
Loans and
Borrowings
Other payables 100.00
%
98.21
%
96.07
%
92.86
%
89.29
%
Derivative financial
instrument
Retirement benefit
liabilities
100.00
%
52.94
%
289.71
%
435.29
%
689.71
%
Provisions 100.00
%
90.75
%
90.39
%
145.20
%
134.88
%
Deferred Tax
Liabilities
Total Non
Current Liabilities
100.00
%
89.98
%
114.47
%
153.26
%
174.56
%
Total Liability 100.00
%
115.42
%
118.80
%
139.41
%
145.62
%

57
Equity
Share capital 100.00
%
100.58
%
101.73
%
102.31
%
102.89
%
Share premium 100.00
%
104.30
%
118.05
%
126.07
%
21.78
%
Merger reserve 100.00
%
100.00
%
100.00
%
100.00
%
100.00
%
Capital redemption
reserve
Other reserves 100.00
%
100.00
%
55.41
%
10.23
% 0.00%
Share option
reserve
100.00
%
128.79
%
169.70
%
187.88
%
198.48
%
Retained earnings 100.00
%
167.32
%
159.85
%
145.04
%
155.20
%
Total Equity 100.00
%
110.87
%
111.15
%
109.68
%
112.54
%
TOTAL
LIABILITIES &
EQUITY
100.00
%
113.21
%
115.09
%
124.98
%
129.57
%
BOOKER GROUP PLC
Common Size Cash Flow Statement
Horizontal Analysis Cash Flow Statement for BK
Particulars 2013 2014 2015 2016 2017

58
Net cash provided by (used in) operating
activities
100.00
%
147.26
%
157.06
%
204.32
%
207.12
%
Net cash provided by (used in) investment
activities
100.00
%
25.21
%
69.91
%
202.01
%
32.09
%
Net cash provided by (used in) financing
activities
100.00
%
121.29
%
304.04
%
334.77
%
358.49
%
Increase (decrease) in cash and cash
equivalents
100.00
%
528.47
%
-
18.98
%
-
143.07
%
243.07
%
Cash and cash equivalents at beginning of year 100.00
%
121.57
%
235.59
%
231.50
%
200.63
%
Cash and cash equivalents at end of year 100.00
%
193.78
%
190.41
%
165.03
%
208.16
%
TATE & LYLE
Common Size Income Statement
Horizontal Analysis Income Statement for T&L
Particulars 2013 2014 2015 2016 2017
Total Revenue 100.0
0%
84.58
%
71.90
%
72.33
%
84.55
%
Cost of Sales 100.0
0%
84.48
%
66.42
%
64.49
%
74.70
%
Gross Profit 100.0
0%
84.82
%
84.72
%
90.67
%
107.59
%
Operating Expenses
Other operating &
Selling Expenses
100.0
0%
90.44
%
110.72
%
111.89
%
115.62
%
Other Operating 100.0 88.68 150.00 130.66 150.94

59
Expenses 0% % % % %
Operating Income
or Loss
100.0
0%
75.15
% 9.88% 38.02
%
69.76
%
Finance income 100.0
0%
200.00
%
100.00
%
100.00
%
200.00
%
Earnings Before
Interest And Taxes
100.0
0%
75.52
%
10.15
%
38.21
%
70.15
%
Finance Cost 100.0
0%
108.82
%
94.12
%
88.24
%
100.00
%
Share of profit after tax
of joint ventures and
associates
Profit Before Tax 100.0
0%
92.03
% 8.31% 41.86
%
77.41
%
Income Tax Expense 100.0
0%
69.57
%
45.65
%
10.87
%
-
47.83
%
Profit for the year
from continuing
operation
100.0
0%
96.08
% 1.57% 47.45
%
100.00
%
Profit for the year
from discontinued
operations
100.0
0%
155.56
%
144.44
%
233.33
% 5.56%
Profit Attributable
to T&L
Shareholders
100.0
0%
100.00
%
10.99
%
59.71
%
93.77
%
TATE & LYLE
Common Size Statements of financial position
Horizontal Analysis Balance Sheet for T&L

60
Particulars 2013 2014 2015 2016 2017
Assets
Current Assets
Inventories 100.0
0%
72.94
%
71.18
%
76.27
%
86.47
%
Trade Receivables, Net 100.0
0%
70.00
%
75.15
%
72.12
%
75.76
%
Other Receivables 100.0
0%
64.15
%
79.25
%
118.87
%
77.36
%
Current Tax Assets 100.0
0%
25.00
%
50.00
%
75.00
%
25.00
%
Available-for-sale
financial assets
Derivative financial
instruments
100.0
0%
90.70
%
72.09
%
50.00
%
36.05
%
Other financial assets
Cash And cash
equivalent
100.0
0%
91.29
%
51.45
%
83.64
%
68.87
%
Total current asset 100.0
0%
77.97
%
68.28
%
77.61
%
75.26
%
Asset held for sale 100.0
0% 0.00% 0.00% 700.00
% 0.00%
Non-Current Assets
Property Plant and
Equipment
100.0
0%
76.41
%
78.29
%
96.66
%
110.75
%
Available for sale
financial assets
100.0
0%
103.70
%
55.56
%
70.37
%
111.11
%
Derivative financial
instruments
100.0
0%
42.59
%
55.56
%
38.89
%
27.78
%
Goodwill & Intangible
Asset
100.0
0%
86.24
%
95.51
%
109.55
%
112.64
%
Trade and other 100.0 0.00% 66.67 33.33 33.33

61
receivables 0% % % %
Retirement benefit
surplus
100.0
0% 0.00% 208.33
%
375.00
%
1000.0
0%
Investment In
Associates
100.0
0%
66.67
%
66.67
%
50.00
%
66.67
%
Investment In Joint
Venture
Other Investment
Deferred Tax Assets 100.0
0%
50.00
%
50.00
%
37.50
%
275.00
%
Total non-current
asset
100.0
0%
98.74
%
104.85
%
104.63
%
122.61
%
TOTAL ASSETS 100.0
0%
88.55
%
86.94
%
91.64
%
99.43
%
Liabilities
Current Liabilities
Trade Payables 100.0
0%
75.00
%
86.36
%
82.58
%
70.08
%
Other Payables 100.0
0%
72.03
%
74.58
%
100.85
%
110.17
%
Loans And Borrowings 100.0
0%
430.67
%
406.67
%
266.67
%
117.33
%
Derivative financial
instruments
100.0
0%
81.67
%
41.67
%
36.67
%
28.33
%
Provisions for other
liabilities and charges
100.0
0%
65.00
%
65.00
%
115.00
%
50.00
%
Tax Liabilities 100.0
0%
71.70
%
84.91
%
124.53
%
107.55
%
100.0
0%
119.66
%
119.32
%
109.83
%
82.54
%

62
Liabilities held for sale
Total current liability 100.0
0%
119.66
%
119.32
%
110.17
%
82.54
%
Non-Current Liabilities
Loans and Borrowings 100.0
0%
53.23
%
56.39
%
67.72
%
73.57
%
Other Liabilities 100.0
0%
66.67
%
433.33
%
433.33
%
333.33
%
Derivative financial
instrument
100.0
0% 9.52% 71.43
%
90.48
%
176.19
%
Retirement benefit
deficit
100.0
0%
79.42
%
90.97
%
91.34
%
93.50
%
Provision for others
liability and charges
100.0
0%
60.00
%
53.33
%
86.67
%
113.33
%
Deferred Tax Liabilities 100.0
0%
175.00
%
133.33
%
87.50
%
104.17
%
100.0
0%
61.33
%
67.44
%
75.37
%
82.00
%
Total Liability 100.0
0%
80.98
%
84.92
%
87.09
%
82.18
%
Equity
Share Capital 100.0
0%
100.00
%
100.00
%
100.00
%
100.00
%
Share premium 100.0
0%
100.00
%
100.00
%
100.00
%
100.00
%
Merger reserve
Capital redemption
interest
100.0
0%
100.00
%
100.00
%
100.00
%
100.00
%

63
Other reserves
100.0
0%
41.73
%
43.88
%
91.37
%
182.01
%
Share option reserve
Retained earnings
100.0
0%
125.68
%
93.72
%
101.09
%
149.73
%
Non controlling interest
Total Equity 100.0
0%
101.35
%
90.35
%
99.32
%
128.57
%
TOTAL LIABILITIES
& EQUITY
100.0
0%
88.55
%
86.94
%
91.64
%
99.43
%
TATE & LYLE
Common Size Cash Flow Statement
Horizontal Analysis Cash Flow Statement for T&L
Particulars 2013 2014 2015 2016 2017
Net cash provided by (used in) operating
activities
100.0
0%
113.94
%
71.31
%
74.90
%
118.73
%
Net cash provided by (used in) investment
activities
100.0
0%
25.30
%
197.59
%
-
103.61
%
137.35
%
Net cash provided by (used in) financing
activities
100.0
0%
83.47
%
78.39
%
70.34
%
115.25
%
Increase (decrease) in cash and cash
equivalents
100.0
0%
-
100.00
%
250.00
%
-
158.82
%
129.41
%
Cash and cash equivalents at beginning of year 100.0 68.39 77.58 43.72 71.08

64
0% % % % %
Effect of changes in foreign exchange 100.0
0%
-
2700.0
0%
1900.0
0%
1400.0
0%
3200.0
0%
Cash and cash equivalents at end of year 100.0
0%
91.29
%
51.45
%
83.64
%
68.87
%

65
Appendix 4: Ratio Analysis of Both Companies
Ratio Formula BOOKER GROUP PLC TATE & LYLE
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Liquidity
Ratios
Current Ratio
(Current
Assets /
Current
Liabilities)
0.87 0.98 0.99 0.95 1.01 2.31 1.50 1.32 1.63 2.10
Quick Ratio
(Current
Assets -
Inventories)/
Current
Liabilities
0.34 0.44 0.45 0.44 0.46 1.44 0.98 0.81 1.03 1.20
Efficiency
Ratios
Days of Sales
Outstanding
(DSO)
(Average
Receivables /
Net
Revenue)x36
5
4.95 4.62 5.17 7.17 9.91 33 37 37 38 32
Total Asset
Turnover
(Revenue /
Average
Total Assets)
3.90 3.96 3.76 3.75 3.78 1.14 1.05 0.96 0.95 1.03
Profitability

66
Ratios
Net Profit
Margin
(NPM)
(Net Income /
Revenue) 1.90% 2.25% 2.48% 2.56% 2.89% 7.83% 8.90% 0.17
%
5.14
% 9.26%
Return on
Capital
Employed
(ROCE)
(Operating
profit/
Average
Total Capital)
18.07
%
19.74
%
21.28
%
22.61
%
25.18
%
15.19
%
12.78
%
1.95
%
7.07
%
11.22
%
Investor
Ratios
EPS (pence)
Net profit
attributable to
ordinary
shareholders /
WANS
4.51 6.06 6.73 7.24 8.66 0.59 0.59 0.06 0.35 0.55
Dividend
Payout Ratio
Dividend per
share / EPS 58% 53% 54% 64% 65% 38% 45% 47% 433
% 80%

67
Appendix 5: Du-Pont Analysis
Ratio Formula BOOKER GROUP PLC TATE & LYLE
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Dupont -
3 factor
ROE
Net Profit
Margin*Asset
Turnover*Eq
uity
Multiplier
16.75
%
18.54
%
19.70
%
21.51
%
25.72
%
24.36
%
23.49
%
0.40
%
12.32
%
21.60
%
Net profit
Margin
(Net Income /
Revenue)
1.90
%
2.25
%
2.48
%
2.56
%
2.89
%
7.83
%
8.90
%
0.17
%
5.14
%
9.26
%
Asset
turnover
(Revenue /
Average Total
Assets)
3.90 3.96 3.76 3.75 3.78 1.14 1.05 0.96 0.95 1.03
Equity
Multiplier
(Average
Total Assets /
Average
Equity)
2.25 2.08 2.12 2.24 2.36 2.72 2.52 2.46 2.53 2.26
Dupont -
2 factor
ROA
Net Profit
Margin*Asset
Turnover
7.43
%
8.90
%
9.30
%
9.60
%
10.90
%
8.96
%
9.32
%
0.16
%
4.86
%
9.58
%
Net profit
Margin
(Net Income/
Revenue)
1.90
%
2.25
%
2.48
%
2.56
%
2.89
%
7.83
%
8.90
%
0.17
%
5.14
%
9.26
%
Asset
Turnover
(Revenue /
Average Total
Assets)
3.90 3.96 3.76 3.75 3.78 1.14 1.05 0.96 0.95 1.03

68

69