Accounting and Finance for Managers: Company Performance Report

This report provides a comprehensive analysis of the financial performance of A.G. Barr Plc, BRITVIC Plc, and COCA-COLA EUROPEAN PARTNERS Plc. It begins by identifying the strategic plans, financial goals, and measurable success indicators for each organization, focusing on financial growth, perfor...Read More

Accounting and Finance
for Managers

Contents
INTRODUCTION...........................................................................................................................4
SECTION A.....................................................................................................................................5
1a.Identify the Strategic Plans for each organisation involving main financial goals &
measurable success indicators in context to financial growth financial performance and
financial sustainability............................................................................................................5
1b. Critically evaluate the performance of the three companies using the latest three years
financial and non-financial data by using financial ratios......................................................5
1c Justification of the best performance company.................................................................5
SECTION B.....................................................................................................................................5
2a. Evaluate the main forms of internal and external long-term finance available to listed
organisation............................................................................................................................5
2b. Identify one source of finance and explore how it impact on interest of existing
stakeholders............................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Financial statements plays vital role in the overall growth and success of an organization.
In addition to this, there are different types of financial statements that require to be prepared in
order to identify organizational performance as well as profitability in long run (Ali and Ahmed,
2017). In context to this, financial goals, decision-making and sustainability of A.G. Barr Plc,
BRITVIC Plc and COCA-COLA EUROPEAN PARTNERS Plc is explained in this report by the
assistance of various financial ratios and performance analysts. Along with this, external and
internal sources of financing available to respective organization is being analysed for
identifying the appropriate and suitable source for company in their future growth prospects.
SECTION A
1a.Identify the Strategic Plans for each organisation involving main financial goals &
measurable success indicators in context to financial growth financial performance and
financial sustainability
BARR (A.G.) PLC
It is one of the soft drink manufacturer that is established in your 1875 food store the
company of a product ranges are food drinks, energy drink and juices, carbonated soft drinks,
cocktails and so on.
Financial goals
The organization earned GB255.7 million pounds in here 2020 that is decline by 8.4% as
compared to 2019. In addition to this, it’s profit is also decline by one point 3% and net margins
by one point 1%. This shows that company financial performance is not meeting with its targeted
goals (Anessi-Pessina and Sicilia, M., 2020). It has executed long term sustainable delivering
plans where company has prioritized in developing relationship with customer, connecting with
customer and driving efficiency for dealing with deviation in its actual performance as well as
targeted goals.
Success indicators
Financial growth: In the present time, it is analyzed that respective company faced
decrease in net profits because of raising in cost of goods sold that has decline existing income
generation capacity.

Financial sustainability: By making proper improvement within financial structure and
operations of business entity, it is analyze that company required to execute long term financial
sustainability policies for competing at marketplace.
Financial performance: In the year 2020, company has performed in decreasing trend that
has caused loss of revenue and raising in cost of goods sold. The total revenue earned by
respective company was 8.4% low as compared to previous year revenue.
Decision making strategy
According to the above discussion, it is determined that company require to execute short
term and long term decision-making for its user growth prospects (Foley, 2018). These are
making new investments, increasing market share and many more.
BRITVIC PLC
It is a soft drink manufacturer in UK that was established in year 1845 with an objective to
gain growth at wider level. The company has different operating sectors such as GB cards, GB
stills and so on.
Financial goals
The organization is aim to maintain its revenue level for promoting long term market share.
For gaining growth, it is significant to earn adequate amount of profits as it help in promoting
healthy business environment. The company has faced declining in net margins and operating
profits by 2.6%. Thus, it required to manage operations effectively so that operational based cost
is reduced.
Success indicators
Financial growth: The company is reportedly downward movement within its financial
position as it is determining that earning per share is declined from 2018 to 2019. In addition to
this, dividend per share has increase in 2019 that has declined total earnings of organization
(García‐Sánchez and García‐Meca, 2018). It is recommended that company required to manage
its policies in an effective manner.
Financial sustainability: The respective company make use of strategies that is offering
healthy food items, developing local favorites, providing quality products within objective to
promote healthy and innovative creation at marketplace. This help company to develop long
term efficiency and sustainability.

Financial performance: with the help of proper rectification within current form of
financial structure, company will enable to use effective and advanced level of operation
technique which leads to improvement in the performance.
Decision making strategy
For managing it’s expenditure that is ranging in huge amount in comparison to previous
year, it is important for company to attract maximum investors so that they can invest which in
turn help in long term.
COCA COLA EUROPEAN PARTNERS PLC
Coca Cola is one of the largest independent and operating unit of bottler that is dedicated for
production, distribution and marketing of different products of Coca Cola.
Financial goals
It is a profit making entity and therefore should focus on expansion of its units in order to
gain high market share.
Success indicators
Financial growth: For gaining growth in financial context, company required to execute
cost effective as well as technological advancement tools as it help in dealing with competitors
and gaining profits in an effective manner (Habib and Hasan, 2019).
Financial sustainability: By execution of organic and sustainable drinks , the chances of
financial growth will be raised which in turn attain relevant market position.
Financial performance: It is analyzed that Coca Cola is performing effectively as its
operating profit, revenue and profit margin have raising that will develop more favorable market
conditions and also healthy Holdings of shareholders as well as investors.
Decision making strategy
For retaining in long term, it is vital to execute long term sustainability structure that
include production of healthy and organic drinks. This help company to attract large number of
customers which in turn raise sales and profitability.
1b. Critically evaluate the performance of the three companies using the latest three years
financial and non-financial data by using financial ratios
BARR (A.G.) PLC

BRITVIC PLC

COCA-COLA EUROPEAN PARTNERS PLC
Net profit margin:
Analysis: the growth of Coca Cola business has an hands so it is stated that effectiveness
has increased in 2020 in comparison to 2019. In case of Britvic PLC on BARR PLC, it face
adverse impact as the overall profit margin is declined by 8.4% as compared to last year. It is
important for both the companies to focus on developing sustainability strategies in order to
retain at marketplace.

Gross margin:
Interpretation: in relation to Coca Cola, it’s productivity throughout the year is increased. In
context to performance, Britvic PLC is relatively low as its overall sales and earning is declined.
Apart from this, BARR PLC is also facing decline in the overall gross margin.
EBIT:
Interpretation: As for the annual report, it has been said that Coca Cola PLC is effectively
able to gain profits that is rated with constant depreciation as well as amortization. If it is talking
about Britvic PLC and BARR PLC, it's unable to gain profit and to attain sustainable
development in year 2020.
Collection period:
Interpretation: it is analyzed that Coca Cola good posses capabilities to recover their
receivables ad compared to other companies in less time frame. In addition to this, Britvic PLC
seeks to compensate its debtor for quite bit long. Moreover, BARR PLC can be able to decline
its turnover period of trade debts in small time period.
Credit period:
Interpretation: as per the above figure, it is analyzed that payment period for Britvic PLC
and BARR PLC are same under the same condition and time period. On the other hand, Coca
Cola is able to meet its objective in less time frame.
Current ratio:
Analysis: According to the above illustration, it is determined that current ratio required to
be anticipate which is only presumed by BRITVIC PLC company as they maintain its ratio in
year 2019 at this level. In addition to this, Coca Cola has a good performance and its current ratio
is improved. Apart from this, BARR PLC were declined because of high current obligations.
Net assets turnover ratio:
Analysis: from the above mentioned figure, it is interpreted that Coca Cola business will be
healthier and high. It is because it develops with the aim of handling assets in less cost and time.
Although, Britvic PLC involve low ratio which state that cash is not be circulated by company in
an effective manner.
Shareholders funds per employee:

Interpretation: in context to this, the gap analysis among two organizations is high likewise
Coca-Cola holds good and high recruiting funds which is almost double in comparison to other
companies.
Total assets per employee:
Analysis: it is determined that there is significant gap among two companies and it has
sufficient staff reserve within Coca Cola and which is about 5 times more in comparison with
remaining two companies.
1c. Justification of the best performance company
From the above discussion, it is it is said that as per analysis of different ratios of above
organization, Coca-Cola European PLC is one of the best performing company as it has sound
earning capacity, optimum liquidity, effective employee base ratio and asset turnover as well
(Huang, 2021). In addition to this, it has wide range of operation that is being carried on different
locations globally.
SECTION B
2a. Evaluate the main forms of internal and external long-term finance available to listed
organisation.
Every organization require some source of finance in order to give running for long duration
in marketplace. There are mainly two sources of funding that is internal funding an external
funding, which are as follows:
Internal financing:
Internal source of financing referred as capital that is arranged from inside the business
itself. There are various internal methods of finance that can be used by organizations. Some
internal finances sources is given below:
Owners capital: it is a form of capital that is invested by the owner itself within the
business and is mostly paid by the owner from their own savings. Herein, owners capital plays
vital role within an organization as return on their investment is paid on fixed basis.
Cost: It is necessary to pay written on equity for holding good amount of shareholders. for
example, if an organization is earning revenue of 255.55 million and the return on equity is 7%
then company required to make adequate earnings in order to pay that cost.

Risk : For instance, if a company is loss making entity then it might lose some number of
shareholders that can develop huge influence over its operations (Mason and Williams, 2020).
Impact on cash flow and working capital: By owners equity, it is analyzed that there will no
such influence on working capital and cash flow will be enhanced by making operations
efficient.
Retained Earnings: Another form of internal financing is retained earnings. It is defined as
income that the company has accumulated throughout the years and tend to be known as reserve
funds. It is analyzed that this undistributed profit kept as a reserve fund and is utilized by
business entity at particular point of time. It is a significant source of finance as there is no
requirement to pay dividends.
Cost: It is important to manage costs that occurred to hold such amount within objective to
make effective investment in organization.
Risk : Herein, There is risk of return in context of money as the amount is reinvested in
investments.
Impact on cash flow and working capital: It is stated that retain earnings have influence over
cash outflow and inflow by way of return on investment for attaining good financial conditions.
External financing:
It is defined as source of financing that is arranged from outside the organization. The
different sources of external financing adopted by companies is mentioned below:
Debt funding: It is referred as money borrowed by business entity which can be paid back
in future along with interest (MohammadRezaei and Mohd‐Saleh, 2018). In addition to this, debt
funds are basically in the form of mutual funds invested within the fixed income security such as
bonds. Here in, the return on investment is paid on fixed basis.
Cost: It is determined that such form of funding is costly as the amount of interest is paid
with the actual amount and required to pay even the company faced losses.
Risk: It is undertaken as risky external source of funding as there is need of interest
payment.
Impact on cash flow and working capital: It is analyzed that debt funding is a form of
funding where cash flow has been impacted.

Term loan: It is define as money borrowed by organazation from any bank for satisfying
their financial requirements (Remenarić, Kenfelja and Mijoč, 2018). In addition to this, it is
repaid with fixed interest within a particular period of time.
Cost: Tom loan involves cost of interest to be paid within given time frame to creditors.
Risk: Here in, risk is included in context of insolvency and also other unfavorable situations
where an organization are unable to repair debts.
Impact on cash flow and working capital: It has wider influence on cash flow as well as
working capital.
2b. Identify one source of finance and explore how it impact on interest of existing stakeholders.
From the above discussion about internal and external sources of financing, owners capital
is considered as effective and best foods of finance as it does not involve risk and cost that is
being charged over (Tan, Chapple and Walsh, 2017). In addition to this, it advance investment
cap city of a company an also promote healthy business decision in long run.
Stakeholders and shareholders: In this form of financing, the owner itself invest funds due
to which there is less risk and role of shareholders.
Providers and lenders: The brand image of company remain stable until the owners is able
to manage funds and shortcomings take place.
Employees: It is analyzed that utilization of remaining benefits impose directly on funds of
organization which are allocated to employees (Zhao, 2017). If wealth of employees get declined
that, it affect directly on the performance of company and also arise financial issues in
organization
CONCLUSION
From the above study, it has been concluded that components of corporate financing plays
vital role in maintaining and attaining organization goals with productivity and profitability. It is
determined that companies mainly rely to run their operations with the help of assets and if they
are unable and having insufficient asset then it negatively influence on its overall performance. It
is important for management team of an organization to allocate and monitor all the resources in
an appropriate and effective manner so that all the activities will run smoothly and objectives is
attained timely which in turn increase profitability. It is determine that there are mainly two types

of sources of funding that is internal and external and it is vital for companies to make use of
appropriate funding sources in order to gain positive returns in future.

REFERENCES
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