Accounting and Finance for Managers: Financial Analysis Report

This report provides a comprehensive financial analysis of three prominent food groups: Hilton Food Group, Premier Food Group, and Green-Core Food Group. The analysis encompasses a detailed examination of various financial and non-financial ratios, including ROE, ROCE, profit margin, gross margin, EBIT margin, collection period, credit period, current ratio, gearing, and net assets turnover. The report compares the performance of these companies over a three-year period (2018-2020), highlighting their strengths, weaknesses, and overall financial health. Section A focuses on the individual company profiles and strategies, while Section B discusses funding sources. The report concludes with an assessment of Green-Core's operational efficiency and investment potential, offering insights into fund acquisition and management methodologies. The report also discusses the sources of funding for each company, including equity financing, and their implications for financial stability and future growth.

Accounting and
Finance for managers

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Section - A...................................................................................................................................1
Section-B.....................................................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRO DUCTION
This report analysis the ongoing performance of the top three companies which are
premier food group, Green core group, Hilton food group these are the company's which provide
the most satisfying services to the customers which makes them at the top positions in the market
there are two companies among them which produces substitute products which are Hilton food
group and premier’s food group they are the tough competitors of each other in the market. With
the help of this report we will analyse the ratios between the companies so that we can check the
profitability of the organisation and how they are planning to achieve its target in the market.
every organisation has its different strategies to achieve its goals and according to that they
perform their task but to compare which organisation is doing well as compared to other
organisation this report is conducted.
MAIN BODY
Section - A
Hilton food group plc: It is a meat packaging company originated in UK and it was
developed in 1994 it supplies its product to the international food market. The segments in which
it operates are Sweden, central Europe, Denmark, Australia. Hilton food group is one of the best
repetitive in the market and provides the good services to the customers which makes the
company's demand in the market the more it will increase its market share the more it will
increase its profit in the market. Hilton food groups always try to satisfy its customer by
providing good services to them which help them to create customer’s loyalty if the customer are
happy with the services given by the company they will refer the company to their friends and
relative which will automatically increase the market share and company's profit.
Premier food group plc: It provides the high quality of food products to the customer
which is good in taste and packaging. it unique selling preposition makes it different from other
in comparison to Hilton food group premier food group is more liked by the people though it
produces the substitute goods of products but with good packaging and quality attracts the
customer in the market it makes all the possible efforts to make its products in a demand.
Premier food group collaborates with big brands to makes it product popular in the market. and
people can understand the quality of the product they are using. So that the market share of the
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organisation can increased and more people can get in touch with the organization so that it can
increase its profitability.
Green-Core food group plc: every organisation wants to earn profit by the products which
are selling in the market to increase its sale and compete with its competitor’s company sell its
product by enhancing it with other qualities like good packing, extra ingredients by putting offer
on it like buy one get one Which attracts the customers and goods can be sold easily in the
market. To achieve it target company has to plan some strategies according to which company
can earn profit. It consists of food like sandwiches, salads, soups etc. which is unique in taste and
packaging. Packaging plays an important role for the selling the goods because customers firstly
get attracted with the packaging only after the taste. If packaging good and attractive it will
attract the customer and sell can be increased. As compared to Hilton food group and premier
food group it is doing a great business in the market.
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
Non-financial ratios 28-03-2020 30-03-2019 31-03-2018
Shareholders’ funds per employee (th) 26 64 58
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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
PREMIER FOODS PLC 28-03-2020 30-03-2019 31-03-2018
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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
In an organisation the expected current ratio should 2 which the company should maintained but
Hilton food group and premier food group was failed to achieve it due to active social control in
the market but green-core food group has achieved by doing the good business in the market in
2019. current ratio shows the financial position of the company if the company is financially
strong it can easily maintain its current ratio.
COLLECTION PERIOD
It is basically the time period in which the organisation collects its amount which is owned by
the clients. organisation should have average collection period so that the financial stability of
the firm should not get disturbed. Hilton food group has the capacity to hold their debtors for
longer duration as compared to Hilton food group premier food group has its turnover shorter for
the collection period IN green-core food group decrease in turnover is seen in 2020 as compared
to 2019.
ROCE
it is basically used for measuring the capacity of the organisation to use its capital for earning the
profit it helps the organisations to measure how significantly it is using its capital it helps the
investors to judge where to invest its money according to the profitability of the company as
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compared to other two organisation premier food group is inefficient in their operation which led
to increase in the capital investment the probability ratio of 19:12 percent has lead the approach
of comparison in green-core food group. Fall in the ratio of 2.96 percent was seen in Hilton food
group in 2020.
NET PROFIT MARGIN
As per the analysis Hilton food group is at the repetitive position in the market from the past
three years, fall of -5.18 percent is seen the operating revenue of premium food group. As
compared to 2019 growth is seen in green-core food group in 2020 with the good profitability.
NET ASSET TURNOVER RATIO
As per the above analysis it has been conclude that Premier food group failed to generate cash-
flow due to low proportion of asset it also possesses the unit of management of assets within the
low time frame and with the low cost.
ROE USING NET INCOME (%)
As per the analysis it is observed that premier food group is running low as compared to other
two organisations on the other hand Hilton food group and green-core food group as at the good
position in the market since 2019 they have shown the productivity in 2019-2020 and earned
profit they have utilised its resources properly so that their goals can be achieved.
EBIT
As per the analysis Hilton food group has shown its growth in profit in 2019-2020 whereas
premiere food group and green-core food group is running low achieving profitability since
2019-2020.
TOTAL ASSETS PER EMPLOYEE
As per the analysis it is observed that premier food group has more number of staff reserved as
compared to other Hilton food group and green-core food group which will help in maintain the
financial balance of the company by providing good services in the market.
CREDIT PERIOD
As per the analysis the playout structure of Hilton food group and green core food group is
similar on the other hand to achieved the credit commitments premier food group needs lengthy
time frame.
GROSS MARGIN
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Hilton food group is running low profit margin due to increase in the inventory cost as compared
to premiere food group and green-core food group they have same profit margin in the market
which helps to increase the market value.
SHAREHOLDER FUND PER EMPLOYEE
As per the analysis the premier food group shareholder fund is thrice as compared to Hilton food
group and green-core food group
Based on the aforementioned results and analysis a conclusion can be made that Green-Core
have the most efficient operations amongst all the of the organizations. The organization is
considered to be most compatible from investor’s point of view due to their retained earnings
and higher dividends pay out structure.
Investment enticement refers to the scenario where any produce has higher chances of
maximizing their earnings within the conventions of a particular marketplace. In order to
establish an outline for any theoretical framework, a set of assumptions are compulsory and in
given scenario the same revolves around the assumption that fair market chance is not in play in
the scenario. For any organization, the latent concept of earnings revolves around the
organization’s understanding of fund acquisition and management methodologies. Taking in
consideration the aforementioned data it can be concluded that Green-Core group have higher
potential associated with acquisition of funds within the marketplace they operate in.
Section-B
In order to maintain contingency on operational efficiency of any organization it is essential
for the organization to ensure a goof inflow of funds. Irrespective of type every organization
needs a good inflow of funds in order to ensure operational contingency. The acquisition of these
funds can be done using many sources individually or an accumulation of these sources
including long term loans by other organisations, reputed financial entities, raising funds using
the general public against which any organisation has to give dividends. The general limit
according to which any organization have to acquire funds as well as give out dividends depends
upon a set of multiple dynamics. The organization have to acquire funds keeping in mind their
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needs and after forecasting the returns that they will get in the pre-demined time frames. In
addition to that, the organization also have to retain a part of their earnings. The dividend and
returns on any investment should be enough to keep that particular investor engaged and
motivated for future interactions. Along with it the organization can also undertake the approach
of crowdfunding in order to acquire funds using general public. But in order to do so the
organization needs to have a good creditability and accountability in the marketplace they
operate within. This approach can only be used after seeking the approval of the equity
shareholders as it enables decentralization of power in the process of decision making.
The sources of funding for Premier Food Group, Green-Core Food Group and Hilton Food
group can be classified as follows:
Equity financing: It is considered to be an approach where organisation raise capital using
the sale of marketable 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 give the shareholders the power to take part in decision-making
process of the organisation. During the time of dissolution of that particular organisation these
equities shareholders can claim assets worth the amount that they have invested in the
organisation. For example, if a shareholder has the shares worth 6,00,000 USD, they are obliged
to claim the organisation's assets worth the same amount at the time of dissolution of the
organization (Salas and Campos 2016). The issue of equity shares is done in a critical situation
as it enables the decentralization of power from equity shareholder’s 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.
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 has to pay in addition to the principle amount (McLaney and Atrill 2016). In
business connections, these loans are usually 25 years long when it comes to property
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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 has to set the amount of retained earnings 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 has 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 affect the operational
efficiency of the organisation making 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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