Britvic PLC: Financial Statement Analysis, Ratios, and Rival Analysis

This report provides a detailed financial analysis of Britvic PLC, a UK-based soft drink manufacturer. It includes an explanation of the company's financial statements (income statement, balance sheet, and cash flow statement) and a justification of key financial ratios, such as profitability, liquidity, efficiency, and solvency ratios. The analysis covers the years 2019-2021, highlighting trends in revenue, net income, and debt levels. The report also compares Britvic PLC's performance with its rivals, including A.G. Barr, Fevertree Drinks, and Coca-Cola, and analyzes common size statements to assess relative performance. The analysis considers the impact of factors such as changing consumer preferences and the COVID-19 pandemic on the company's financial health and market position. The report concludes by summarizing the key findings and implications for Britvic PLC's future performance. Desklib provides past papers and solved assignments for students.

Accounting and Finance

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Explain the financial statements and analysis of the business along with justification of the
ratios. ...........................................................................................................................................1
2. The performance of the Britvic PLC in comparison with their rivals and analyse the
statements of common size..........................................................................................................3
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Britvic PLC is manufacturing corporation of England. It relies on Hemel Hempstead. It
manufactures the many types or kinds of soft drinks. It is situated in the 1845 by the John Daly.
It has been set up in century of the 19. It is also known as the British Vitamin goods firm or
enterprise. There are 4113 workers in this business enterprise and it's net income is 103.2
million. The firm has suffered problem to manage the stability in market. The consecutive
modifying needs of consumers towards their commodities is serious threat for switching the
rivals product (Brooks and Schopohl, 2020). This business has to make sure and maintain their
brand positioning among stiff rivals such as Robinson and tango. The challenges entities suffered
to decide the price so it is convenient to purchase to the individuals in other words, it will be
affordable to them. Their costumers are contented with their commodities or items. With the help
of this, it is capable to grab or achieve its high market of share. The another more information of
financial has been taken from the monetary reports that aids in deep analysis of the corporation.
The justification or interpretation of the ratio is utilized to doing the comparison of accounting
term and figures of the company to justify the key indicators of financial of the Britvic PLC.
MAIN BODY
1. Explain the financial statements and analysis of the business along with justification of the
ratios.
It refers to the fastest and strongly growing organization that attain high profitability in
future. These financial statements generally consists income statements, balance sheet , cash
flow statements. It aids to know financial position of the company. It presents the performance of
firm in order to another industries. It helps in guiding whether the business firm is performing
good or not. Britvic PLC's balance sheet states that the enterprise has 59.25% total debt out of
the their equity percentage (Unerman, 2020). The business has diverse portfolio to capture or
cover the wide area of market. The firm's new culture aids to the organization to respond quickly
in the changing environment of the market. The enterprises is representing the cash inflow it
mean they have positive balance from the previous few years. As per the year of 2021 and 2019,
the cash flow has raised from 150 to 180. it indicates that the organization is getting or attaining
more funds from the resources rather than utilization of the funds.
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Ratio analysis: It refers to the measurement of the quantitive terms or figures with the help of
the financial data or information for the purpose of analysing the efficiency of the company. It
consists in the part of the key equity analysis of the organization. The measurement is useful for
the external users to evaluate or analyse risk and determine the benchmarks. It verifies that how
the enterprise performs with the time in comparison of other industries and identical companies. Profitability Ratio: It aids to set or determine net profit as well as net loss that is earned
by the organization. In the year of 2021, the firm has mentioned their revenue 1.41 billion
that is similar to the year of 2020. The net income of the business firm has raised by the
9.09 percent it means it has been expand from 94.6 to 105M. As per the year of 2019 the
net earnings of this organization is 1.6B which considered as highest profit gaining firm
(Linnenluecke and et al., 2020). The reduction in the expenditures of the cost of sales has
enhanced their sales by 60 to 70 percent. The gross profit of business organization is
41.76 percent as per the current or presented year but it is more in comparison of last
year. The ratio of operating profit is 130.3 as per the year of 2020 and it bis 160.7 in year
2021. Liquidity Ratio: It evaluate the short term position of the corporation. It includes the
short term debt of the business enterprise. It involves the current ratio, quick ratio. The
current ratio of the Britvic PLC is 1.08 as per the year of the 2021 and in year 2020 and
2019 it was 0.75,0.87 respectively but the idea ratio of this current ratio is 2:1. it states
that in the present year of the firm has minimum current assets to pay off their current
liabilities. The quick ratio of this plc are 0.84 and 0.86 as per the year of 2021, 2020
respectively. But the idea ratio is 1:1. it means all the current assets except prepaid
expenses and inventory are equal with their liabilities to pay them but in year 2019, it was
0.92. It verifies that the business has not sufficient quick liability to pay their quick
assets. It is analysed by deducting the stocks from their current assets. Efficiency ratio: It contains the measurement to utilized that how appropriately the
business firm is maintaining their liabilities and assets. It is known as the activity ratio for
the purpose of utilizing the assets in proper way and evaluate the present action or
performance of the enterprise (Young, Herath and McCoy, 2018). It states the capability
of the corporation to incur the cash and covert their inventories into the cash. The ratio
of assets turnover is 0.9 in the present year and according the last year it was 0.5. it has
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been presented that the organization is maintaining their assets from the sales in
appropriate and effective manner. The ratio has been improved in year of current that
means the sales has enhanced or maximized as well as their assets has been retrieved
from their sales. The ratio of assets turnover of Britvic plc are 5.59 and 5 as per the year
of 2021, 2020 respectively. It states that how speedily the corporation is capable to sell
their items or products. It also shows that there is no requirement or situation of raising
the overstock and under stock.
 Solvency Ratio: It determines long term obligations and solvency of the firm. It evaluate
the business enterprise's financial health and ability of the corporation to bear the
obligations that are long term in nature of the company. It analyse the maximum
creditworthiness of firm. The ratio of debt equity of the business are 1.45, 1.56 and 1.98
as per the year of 2021, 2020 and 2019 respectively. But it's ideal ratio is 1:1. The
company has the maximum ratio in the year of 2021 that means the firm has high external
debts than the obligations of internal of the enterprises. The ratio of debt to assets in the
year of 2019 is 0.44 that is little less in order to previous years. It was same in the year of
2020 and 2021. It is the ratio that states that the firm is able to maintain the debt from
their assets. If the corporation has less ratio that means the enterprise is at good position
to run for the long time (Lakew and Musa, 2019). These kind of ratios assists to know
the capabilities of the corporation to adopt or pay off their long term loan.
2. The performance of the Britvic PLC in comparison with their rivals and analyse the statements
of common size.
The capitalization of the market of Britivic corporation is £1.92billion that is a bit high
amount to beat their rivals. There are number of competitors of this organization like A.G. Barr,
Fevertree drinks and coca cola. The Britvic company's share price in the exchange market of
London Stock is 729.5 and it is raised by the 014 percent. The rivals of this firm A.G. Barr's
share price is 462 which is slope down by 1.1 percent. The profits or revenue of this firm is £
291.20 million where as the income or earnings of Britvic PLC is 550M. This business firm sells
their commodities or items of Pepsi Co brand in Britain and Ireland (Kokinaand and Blanchette,
2019). It is also known as the topmost brand at the July month. It has been seen that the micro
group of investors wants to invest as 37 percent in the A.G. Barr and the remaining percentages
invested in Britvic PLC and Tango. It assists the firm to maintain or manage their business and
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focus or concentrate on cost savings and to enhance the revenue for attaining the better reach in
the market segment. The CEO of Britvic corporation John Gibney has done the research of the
market for the purpose of recognizing or identifying the achievements and opportunities as well
and challenges by the corporation. The A. G. Barr approach to the consumers by providing them
soft drinks by connecting with the retailer, wholesaler and carry operators. The business firm
sells the items in the packaging form like bottles, cans and dispensers form such as item syrup
which is squeezed with the drink of carbonated (Jackson, 2020). This business enterprise gains
33.2 percent from their foreign or international sales and they earns 19.9 and 11.7 percent by
selling the products to France and Ireland. The Britvic company has started to retrieve their loss
that has been incurred due to unpredictable situation or conditions and by winding up their
operations in Ireland. It assisted to build or maintain high growth in order to their revenue and
tactics for the purpose of investing in various brands. It has enhanced the more chance or
possibilities for the firm due to this favourable situation. Although, it has enlarged into the new
territories and has better position or status in the drink market at international level. The A.G.
Barr plc has provide stiff compensation to the business firm. The tastes and the preferences of
consumers has changed through declining food squash racquets in the drinks and it also reduces
the sale of Britvic PLC organization. Now, the human beings are focusing on living the healthy
life so they are not preferring the sugar in drink (Harrast, 2020). It is an advantages or threat to
the company for reaching the market. It has been observed that business firm has acted good or
better in the UK drinks sector and their growth rate is enhancing in quick manner with the
system of carbonates soft drink. The amalgamation of this company with their rival A. G. Barr
will take out the uniqueness in the items of foods and their beverages sector. It assists to live
with the main specified core situation of the economic of the corporation.
Analysation of A.G. Barr and Britvic plc of the common size statements.
It has been evaluated with the help of the comparative reports that the assets of their rival A.G.
Barr firm enhanced by 11.32 percent and 8.74% the organization gained in the return from their
assets as per the year of 2022 but in previous two years there is less percentages of assets by
1.38, 0.17% as per the year of 2019, 2020 respectively. There is the availability of assets that are
current in nature in the enterprise, it has maximized from 5 to 29 percent in the present year. Due
to the pandemic of COVID 19 in previous two years, the growth of the company has been
reduced in high amount. The corporation's total debts are 30.10 in percentage but it has been
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declined to 26.20 percent in the year of 2022. It is the positive indication for growth of the
enterprise. The business firm's burden to pay off their outsider liabilities has been declined by 4
percent. It aids in trading of the margin (deHaan, Lawrence and Litjens, 2019). In this business,
the internal capital has been invested is 77 percent approximately that is good to compute or
analyse the status or position of the corporation. The cash or money which is placed under the
retained earnings is bit large in amount to meet up with the contingency for the upcoming time.
The statement of the income is utilized the profit that is achieved by the enterprise in previous or
past years. The EAT of the company is 27.900 M in the present year but it was 19,100 as per the
previous year. In recently year, it has raised by 10% that means the company is attaining high
amount of revenue or profit at current. The India's competition commission has verified the
amalgamation of their rival AG Barr and Robinsons drink. It is considered as the biggest merger
of more than one PLC. The initiation of this idea of the joint investment is to secure the cost and
to furnish the drinks at very optimum value or price. This strategy will furnish the advantages to
deliver the items at the level of international. These both the items or commodities are closely
substitutes of them and furnish the difference attributes in the items and services (Bradbury and
Scott, 2021).
CONCLUSION
From the above report it has been analysed or concluded that the terms of accounting and
finance plays very crucial role in each and every corporation. The business Britvic is
manufacturing or producing organization of the food items and soft drinks as well. The business
enterprise has good positioning or brand status in the market. As per the report, the statements of
financial has evaluated to know the position of the financials. These kind of the documents aids
in differentiating their action or performance of the corporation with their rivals. It presents the
status of their assets as well as equity of the firm. The statement of the income shows that how
much the corporation is gaining the income or revenue from item's cost. There has been analysed
many ratios such as solvency, profitability, efficiency and liquidity for the purpose of getting the
terms of accounting. These kinds of ratios states the ability of the firm of earning the profit and
present the efficiency of the organization to run their business activities and generate the cash for
the long term. It has also concluded that the examination of the action of the monetary related of
the company with their paper or statements of the financials. There has been done the analysation
of the rivals that are available in the market as well as comparative financials position of the
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major rivals. From all the above evaluation it has been stated that for the Britvic plc, it is good to
start the joint venture to beat with the competitors and minimize the rival level as well.
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