Financial Analysis of British Sky Broadcasting: 2013-2014 Performance

This report provides a financial analysis of British Sky Broadcasting (BSkyB), examining its performance in 2013 and 2014. The analysis includes the calculation of key financial ratios such as gross profit margin, operating profit margin, and net profit margin, along with an assessment of shareholder satisfaction based on the financial results. The report highlights a decrease in profitability margins from 2013 to 2014, attributing this to increased expenses. It then suggests strategies to improve profitability, such as cost management and boosting productivity. The report concludes that while BSkyB's performance is average, it is sufficient for stakeholders, and recommends specific actions to increase the company's profitability. The report also includes an executive summary regarding the effectiveness of reward and appraisal systems in increasing retention and productivity at McDonald's, identifying problems and causes, and suggesting solutions.

INTRODUCTION TO
BUSINESS (TASK 3)

Table of Contents
MAIN BODY...................................................................................................................................3
1. Calculation of ratios................................................................................................................3
2. Extend to which shareholders of above company should be satisfied in accordance of
financial performance of year 2013 and 2014. ...........................................................................5
3. Different types of options which can be beneficial for above company in order to increase
profitability..................................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES.................................................................................................................................9

INTRODUCTION
It is essential for companies to do proper financial analysis in order to take corrective
actions (Vogel, 2016). There are different types of techniques to do so. The project report is
based on British Sky Broadcasting company which supplies telephone and broadband services.
In the report financial performance of this company has been analyzed in terms of different ratios
and profitability. As well as some operations are suggested which may enhance the profitability.
MAIN BODY
1. Calculation of ratios.
(A). Gross profit- This can be defined as a type of profit which is earned by companies after
subtracting cost that is associated in manufacturing of products (Cucchiella, F., D’Adamo and
Gastaldi, 2015). The value of gross profit is presented in income statement. In the aspect of
above company, gross profit is mentioned below:
Particulars 2014 £M 2013 £M
Revenue 7632 7235
Less- Cost of sales 4616 4329
Gross profit 3016 2906
(I) Gross profit margin= Gross profit / Net sales x 100
2014 £M 2013 £M
Gross profit 3016 2906
Net sales 7632 7235
Calculation 3016/7632*100 2906/7235*100
Gross profit margin 39.52% 40.17%

(B) Operating profit- This can be defined as a type of profit which is earned from business
operations and activities before deducting amount of interest and tax. Below operating profit and
ratio is calculated of British Sky Broadcasting company in such manner:
Particulars 2014 £M 2013 £M
Gross profit 3016 2906
Less- Expenses 1741 1576
Operating profit 1275 1330
(ii) Operating profit margin= Operating profit / net sales * 100
2014 £M 2013 £M
Operating profit 1275 1330
Net sales 7632 7235
Calculation 1275/7632*100 1330/7235*100
Operating profit margin 16.70% 18.38%
(C) Profit for the year- The term profit is also known as financial gain. It can be defined as
difference between amount earned and spent in operating any activity in corporations (Bellos and
Tzivanidis, 2017). In regards to above company, herein underneath value of profit for year is
being calculated in such manner:
Particulars 2014 £M 2013 £M
Operating profit 1275 1330
Less- Tax 410 351

Profit 865 979
(iii) Net profit margin = Net profit / Net sales * 100
2014 £M 2013 £M
Profit 865 979
Net sales 7632 7235
Calculation 865/7632*100 979/7235*100
Net profit margin 11.33% 13.53%
2. Extend to which shareholders of above company should be satisfied in accordance of
financial performance of year 2013 and 2014.
Descriptive analysis- In this task of report, descriptive analysis of financial performance of above
mentioned company is done below in such manner:
 Gross profit margin-

2013 2014
39
39.2
39.4
39.6
39.8
40
40.2
40.4
40.17
39.52
Gross profit margin
Analysis- On the basis of above calculated gross profit margin of company, it can be find out that
in year 2013, their GP ratio was of 40.17% which reduced by short margin and became of
39.52%. This is so because their gross profit increased by just £ 110 million while sales raised by
huge margin.
 Operating profit margin-
2013 2014
15.5
16
16.5
17
17.5
18
18.5
19
18.38
16.7 Operating profit margin

Analysis- On the basis of above prepared line chart, this can be find out that company's operating
margin is also decreasing similar as above ratio. Such as in year 2013, it was of 18.38% that
decreased and became of 16.7%. This is so bacause of higher expenses in year 2014 as compare
to year 2013.
 Net profit margin
2013 2014
10
10.5
11
11.5
12
12.5
13
13.5
14
13.53
11.33 Net profit margin
Analysis- In accordance of above presented line chart, this can be find out that company's net
profit has been decreased in year 2014. Like in year 2013, their net profit was of 13.53% that
decreased and became of 11.33% in 2014.
These above analysed ratios shows that company's current performance is quite weaker as
compare to last year. Though, there is not higher difference in financial condition in both years.
Their stakeholders should be satisfied with their performance because net profitability of
company is sufficient to pay dividend to them.

3. Different types of options which can be beneficial for above company in order to increase
profitability.
On the basis of above analysis of profitability of company, this can be stated that they
need to apply some alternatives to increase level of profit. Herein, underneath some options are
mentioned that can increase profitability such as:
 Management of cost- Sky Broadcasting company should try to minimise cost so that
their profits can be increase. The above analysed data shows that their expenditures are
increasing significantly in year 2014. If they will focus on control their cost then it will
be beneficial for them to increase their profitability. Though, this option can be fail if
they do not focus on their sales revenues.
 Boost productivity- It is also an important way to increase level of profitability for above
company (Hasibuan and Syahrial, 2019). If they will focus on increasing level of
productivity then this will help them in enhancing capability of satisfying demand of
customers. As a result their net revenue will also increase. This option may not be work
in the case when cost of production goes higher.
So, these are the key options which can be beneficial for above company in order to increase
level of profitability.
CONCLUSION
On the basis of above project report, this can be concluded that financial analysis is
useful for internal and external stakeholders. In the report, different types of ratios such as gross
margin, operating margin etc. are calculated and interpreted of Sky Broadcasting company. In
accordance of mentioned ratios, this has been concluded that company's overall performance is
average but enough for stakeholders. In the end part of report, some recommendations are given
to company which may lead to increased profitability of company.

REFERENCES
Books and journal:
Vogel, H. L., 2016. Travel industry economics: A guide for financial analysis. Springer.
Cucchiella, F., D’Adamo, I. and Gastaldi, M., 2015. Financial analysis for investment and policy
decisions in the renewable energy sector. Clean Technologies and Environmental
Policy. 17(4). pp.887-904.
Bellos, E. and Tzivanidis, C., 2017. Energetic and financial analysis of solar cooling systems
with single effect absorption chiller in various climates. Applied Thermal Engineering.
126. pp.809-821.
Hasibuan, R .P. S. and Syahrial, H., 2019, August. Analysis Of The Implementation Effects Of
Accrual-Based Governmental Accounting Standards On The Financial Statement
Qualities. In Proceeding ICOPOID 2019 The 2nd International Conference on Politic
of Islamic Development (Vol. 1, No. 1, pp. 18-29).

EFFECTIVENESS OF
REWARD AND
APPRAISAL SYSTEM

EXECUTIVE SUMMARY
The project report summarise about information regards to reward system of company of
case study. The purpose of report is to demonstrate understanding about role of effective reward
system. In the Mcdonald's company, their reward system has some positives and some negatives.
It is essential for company that they should overcome from shortage of ineffective reward
system.

INTRODUCTION
This is important for companies to implement an equal reward and appraisal system so
that employees can be motivated. Main objective of this project report is to demonstrate
understanding about role of effective reward system in order to retain employees. This project
report is based on case study of Mcdonald's in which they face challenges in applying reward
system due to lack of monetary resources. In the project report, detailed information about
reward system is mentioned as well as issues of ineffective reward system are also mentioned of
chosen company of case study.
MAIN BODY
1. Definition of reward, appraisal system.
Reward system- This can be defined as a type of incentive program which influence employee
retention and productivity by providing suitable bonus, raised pay and many more. Under this
system, those employees are identified whose performance is excellent (Hankins, 2016).
Appraisal system- It is a type of process in which management department analyse the
performance of employees and gives feeback to them. On the basis of this, employees are
promoted for higher posts.
Employee retention- This can be defined as an capability of a business entity to retain their
employees. It is crucial for companies because if employee retention rate will be lower then this
is being considered better.
Productivity- It can be defined as an effective usage of available resources such as labour,
capital, land etc. in the manufacturing of different products and services (Li and Abumuhfouz,
2015). Higher productivity indicates that company is using their resources in most effective
manner.
2. Reward and appraisal system available in the organisation.
In accordance of policy of Mcdonald's company, this can be find out that company's
reward system is based on the performance of their employees. It indicates that if their