Analysis of Financial Performance for Three Organizations

This report provides a detailed financial analysis of three prominent food industry companies: Hilton Food Group, Premier Food Group, and The Green-Core Group. The analysis focuses on various financial and non-financial ratios, including ROE, ROCE, profit margin, gross margin, current ratio, and gearing, to compare their performance over several years (2018-2020). The report examines the companies' strengths, weaknesses, and overall financial health, offering insights into their operational efficiency, debt management, and shareholder value. Furthermore, the report explores methodologies for efficient financing, including equity and debt financing, and their implications for the companies' financial strategies and fund acquisition. The financial ratios are compared and analyzed to provide a comprehensive understanding of the financial standing of each company and their relative positions within the food industry. The analysis also highlights the importance of factors like investment enticement and how companies can manage their funds effectively. The data presented in the report is analyzed to draw conclusions about each company's performance and their potential for future growth.

Accounting
and
Finance for Managers

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Section-A.....................................................................................................................................1
Section-B.....................................................................................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
.........................................................................................................................................................6

INTRODUCTION
The report revolves around the overall performance of three well reputed organisations,
Hilton Food Group, Premier Food group and The Green-Core Group. The Premier Food group
and Hilton food group produces substitute products, and are originated within the same economy
and are top competitors. The following report focuses on different ratios in order to establish an
outline for comparison between the three organisations along with overall objectives and goals of
these these determined concepts. The report also reflects upon the methodologies for efficient
financing of the organisation as well.
MAIN BODY
Section-A
Hilton Food Group PLC: The organisation pride themselves over their reputation of
bring a lively organisation for substantially long period of time. The organisation is a beacon of
high expectations from their customers. The organisation uses their values as a tool for
acquisition of target customers as well as retention of their old customers. One of the
organisation's biggest strength is their believe in comparatively longer joint ventures and tie-ups.
Hilton Food Group's overall goal is achieving the concept of absolute co-ordination within the
organisation itself (Cahan 2016). The organisation uses their strong values like devotion and
engagement in order to make their workforce succeeded in accordance to their individual goals.
Efficient management flows within the organisation, making the achievement distinct and ethical
framework of organisational policies possible. The organisational focus on the principles lays an
outline for how organisation priorities acting like an entity and the behavioural aspects of the
organisation as an individual.
Premier Food Group PLC: The organisation's unique selling proposition revolves around
premium quality food, with high nutritional values. The food product that they produce are easy
to make and the organisation manages to have diversification in their food products along with it.
The accumulation of these quality services is what makes them one of the leading food producer,
where their products can be found in around 94 percent of British households. The organisation's
approach to build collaboration with big brands with premium prices helps them in establishing
the importance of nutritional industry within the marketplace (De Villiers et al 2017). The
organisation plans on developing a flawless base for their operations. The value based principles
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of the organisation helps them when it comes to collective decision-making process. The
organisation believes in involvement of their overall workforce in the process of decision-
making, enabling creativity and innovation in the process. Premier Food Group are well reputed
when it comes to their sustainability policies and their focus on building a two way
communication between the organisation and their customers along with the organisation itself.
The Green-Core Group PLC: The demand for food products never goes down in a
marketplace and therefore the organisation subdues their active competitors by enhancing the
quality as well as quantity of their deliverance and along with it using their promotional activities
as a catalyst to motivate their customer to buy more. Green-Core group's overall methodologies
revolves around many dynamics, the organisation plans on pushing the potential income through
an accumulation of omni-channel supply, enhancing the overall quality of their deliverables and
presenting their organisational strong values through their portfolios and use them as a tool to
enhance their compatibility in the market (Zhu et al 2017). The major strengths of the
organisation are their honestly, their values that prioritizes their customers, power people and
their food which is home cooked.
Financial and non-financial ratios:
GREENCORE GROUP PLC 28-03-2020 30-03-2019 31-03-2018
ROE using Net income (%) 34.66 4.55 1.72
ROCE using Net income (%) 19.12 4.8 2.58
Profit margin (%) 7.48 0.75 0.53
Gross margin (%) 33.84 30.23 31.12
EBIT margin (%) 6.73 2.04 1.84
Collection period (days) 26 34 30
Credit period (days) 54 50 47
Current ratio (x) 0.69 2.01 0.75
Gearing (%) 156.67 90.47 119.39
Net assets turnover (x) 2.06 1.81 1.49
Table 1: Financial Ratios for Green-core Group PLC
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Non-financial ratios 28-03-2020 30-03-2019 31-03-2018
Shareholders’ funds per employee (th) 26 64 58
Total assets per employee (th) 100 173 167
Table 2: Non-Financial Ratios for Green-core PLC
HILTON FOOD GROUP PLC 28-03-2020 30-03-2019 31-03-2018
ROE using Net income (%) 17.23 17.95 15.2
∟ ROCE using Net income (%) 9.02 11.98 12.43
Profit margin (%) 2.38 2.63 2.52
∟ Gross margin (%) 16.17 12.69 11.93
EBIT margin (%) 3.08 2.8 2.58
Collection period (days) 37 31 30
∟ Credit period (days) 54 50 47
Current ratio (x) 1.05 1.23 1.2
Gearing (%) 175.87 66.57 36.16
Net assets turnover (x) 3.58 5.56 6.53
Non-financial ratios 28-03-2020 30-03-2019 31-03-2018
Shareholders’ funds per employee (th) 38 38 44
Total assets per employee (th) 181 121 116
Table 3: Financial and Non-Financial Ratios for Hilton Food Group
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PREMIER FOODS PLC 28-03-2020 30-03-2019 31-03-2018
ROE using Net income (%) 2.77 -3.51 0.76
ROCE using Net income (%) 3.37 1.16 2.94
Profit margin (%) 6.33 -5.18 2.55
∟ Gross margin (%) 40.94 44.12 40.42
EBIT margin (%) 11.25 0.55 8.48
Collection period (days) 27 29 24
∟ Credit period (days) 65 65 59
Current ratio (x) 0.98 0.78 0.78
Gearing (%) 64.91 105.83 106.9
Net assets turnover (x) 0.32 0.42 0.42
Non-financial ratios 28-03-2020 30-03-2019 31-03-2018
Shareholders’ funds per employee (th) 404 230 234
Total assets per employee (th) 729 533 540
Table 4: Financial and Non-Financial Ratios for Premier Food PLC
Current ratio:
Analysis- In normal scenario the Current Ratio is of an organisation is expected to be 2, which
was attained by Green-Core Group for the year 2019. Premier Food Group and Hilton Food
Group PLC were unable to achieve this due to active obligations in their marketplace.
Collection period:
Analysis- Considering the above data it can be concluded that Hilton Food Group have the
tendency to hold their debtors for longer duration of time. Premier food group have shortened
their turnover associated with creditor payment period. A substantial decrease is seen in debtor
turnover time in Green-Core Food Group in 2020 as compared to that of 2019.
ROCE (%)
Analysis- On the basis of above data analysis Premier Food group's overall operations are
inefficient when compared to other two organisations, which results in significant increase in
their capital expenditure. Green-Core Food Group have leads in this approach of comparison
with probability ratio of 19.12 percent. The fall of about 2.96 percent is seen in the accumulated
ratio of Hilton Food Group in the year 2020.
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Net profit margin:
Analysis- Hilton Food Group holds a good position from the last three years. The operating
revenue for Premier Food group had a substantial fall of -5.18 percent. As Green-Core Food
Group continues their growth a significant growth can be seen in the year 2020 when compared
to that of 2019.
Net assets turnover ratio:
Analysis- Despite of significantly lower proportion of assets in Premier Food Group, based on
the above analysis the conclusion can be drawn that the organisation is unable to regulate the
cash-flow generated from the same. Premier Food Group on the other hand possess a beneficial
combination of assets management within low time frames along with significantly low costs.
ROE using Net income (%)
Analysis- Based on above data analysis, Premier Food Group will be the least productive
amongst the three organisations (Thomson 2017). The conclusion can be drawn that the Hilton
Food Group have achieved a reputed equity share within the market considering the stability in
their success in the years 2019 and 2020. A significant rise can be seen in the return on earning
of Green-Core Food Group considering the years 2019 and 2020 which concludes that there is
enhancement of operational productivity of the organisation.
EBIT:
Analysis- The Premier Food Group along with Green-Core Group have seen a significant
decrease in the year in 2019 and 2020. Accumulated amortization along with depreciation
becomes an obstacle in retention of profits for Hilton Food Group.
Total assets per employee:
Analysis- The Premier Food group have staff reserves almost 5 times more than the remaining
two organisations.
Credit period:
Analysis- The Premier Food Group have longer times frames for achievement of their credit
commitments. On the other hand both the remaining organisations have similar payout structure.
Gross margin:
Analysis- Due to increase in inventory cost Hilton Food group have a significantly low profit
margins as compared to other two companies. Green-Core and Premier Food Group have almost
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the same profit margins while Premier Food Group exceeds Green-Core Group in a very minute
level.
Shareholder fund per employee:
Analysis- The shareholder fund per employee for Premier Food Group is almost three times the
majority of rest of the two organisations.
On the basis of above data analysis it an be concluded that Green-Core Group have the
most efficient performance with enhanced dividends and retained earnings making the
organisation more compatible from an investors' point of view.
Investment enticement is a terminology for a considerate situation where any producer
have more chance of earnings in the marketplace, assuming that the force of fair chance is not in
the play. The latent concept of earning for any organisation revolves around their understanding
of methodologies developed in order to manage the funds. Considering the above data Green-
Core Group have more potential when it comes to acquisition of funds.
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Section-B
The acquisition of funds is very important when it comes to maintaining the overall
operational efficiency in organisation's operations. An organisation needs funds for acquisition
of resources, taking an opportunity and maintaining a continuity in the operations. These funds
can be acquired by various sources including reputed financial entities, long term loans by other
organisations, raising funds from public against which the organisation haven to provide
dividends. The overall limit in accordance to which any organisation have to attract their funds
depends upon many dynamics. The organisation have to make sure that they can their a part of
that fund after giving out sufficient dividends so that the public is enthusiastic enough when the
next time organisation plans on raising funds from that particular source. Along with this the
organisation can raise funds from public by issuing equity shares, which gives the power of
decision making to the shareholders (Feldman 2017). Equity shares are issued at very critical
situation as it enables the decentralization of power from pre-existing equity share holders and
therefore their approval before issuing these shares is important. Apart from it an organisation
can use debentures and preference shares as well in order to raise funds from public.
These marketable securities with the context of Green-Core Food Group, Premier Food Group
and Hilton Food group is as follows:
Equity financing: It is an approach where an organisation raise capital using the sale of
shares. This methodology can be adopted by an organisation in order to pay their short term
goals or when an organisation is planning on acquisition of long term opportunity. These shares
gives the shareholders the power to take part in decision-making process of the organisation.
During the time of dissolution of that particular organisation these equity share holders can claim
assets worth the amount that they have invested in the organisation. For example, if a
shareholder have the shares worth 5,00,000 USD, they are obliged to claim the organisation's
assets worth the same amount (Salas and Campos 2016). The issue of equity shares are done in a
critical situation as it enables the decentralization of power from equity shareholders hands.
Equity shares can only be issued after taking approval of pre-existing shareholders.
Debt Financing: This methodology is used when an organisation requires funds for their
capital expenditures by using notes, bonds and promising bills. These marketable securities can
be issued to individuals as well as financial institutions who can acquire it in order to resale it or
investment purposes (Loughran and McDonald 2016). In exchange of the funds, the investors i.e.
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individuals or financial institutions becomes creditors and are obliged for the repayment of
principle amount of debt along with the interest.
Term loan – This is methodology where short-term or long term loans are acquired from
financial institutions or big investors. Against these loans is associated the interest amount which
the organisation have to pay in addition to the principle amount (McLaney and Atrill 2016). In
business convections, these loans are usually 25 years long when it comes to property
development or machinery acquisition or writing off. This methodology is usually used by small
scale organisations when it comes to acquisition of capital assets. Financial institutions all over
the globe have developed this methodology for supporting small enterprises in this manner.
Retained earnings- This is an income for any organisation earned by efficiently using the funds
that they have acquired from the public itself. The term retained earning suggests its concept. It
is the part of earning that he organisation retains after handing out the dividends to their
shareholders. Any organisation have to set the amount of retained earning after considering many
factors, including investors, the credibility and accountability of organization in the market and
future debt and equity financing acquisition (Kim et al 2017). This methodology is used
considering all the dynamics. The organisation have to hand out sufficient dividends at the end of
the year to enhance future acquisition of debt and equity financing. This is the share of income
that remains in the hand of company after giving out dividends and paying all the creditors of the
organisation.
CONCLUSION
The report concludes that the accumulated units that compiles together and form
corporate accounting establishes an outline for the efficient management of an organisation. The
overall operational stability of an organisation depends upon the availability of assets within the
organisation itself and therefore deficiency of funds with management can effect the operational
efficiency of the organisation makMcLaney, E. and Atrill, P., 2016ing it prone to the market
risks. It is the responsibility of management of an organisation to use active monitoring
methodologies in order to keep an eye on the organisation's overall funds and strategically plan
the course of action in a manner that post organisation's expenditure, sufficient profits are
retained.
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Feldman, M.A., 2017. The Essentials of Finance and Accounting for Nonfinancial Managers.
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lodging industry managers: The third phase of a repeated cross-sectional study.
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