ACC 3015: Comparative Financial Analysis of Food Industry Firms Report

This report, prepared for ACC 3015, presents a comparative financial analysis of three firms: Green-Core Group, Hilton Food Group, and The Premier Food Group. The analysis is divided into two sections. Section A examines the financial and non-financial ratios of each company over a three-year period, including Return on Equity (ROE), Return on Capital Employed (ROCE), profit margins, and turnover ratios. The report analyzes trends in these ratios to assess the financial health, profitability, and efficiency of each firm. Section B focuses on internal financial data, including retained earnings, equity financing, and debt financing, and discusses how these financial concepts are applied within the context of the selected companies. The report aims to provide insights into the financial strategies and performance of these food industry players, highlighting key strengths and weaknesses. The analysis includes calculations of various financial ratios and their implications for decision-making within the companies. The report also discusses the importance of financial management and its impact on business growth.

ACC 3015

Table of Contents
INTRODUCTION................................................................................................................................3
SECTION A .........................................................................................................................................3
SECTION B..........................................................................................................................................8
CONCLUSION..................................................................................................................................12
REFERENCES...................................................................................................................................13
Books & Journal:...........................................................................................................................13

INTRODUCTION
Business sector is changing at rapid scale and it has become important to focus on market.
Main aim of this report is to understand the business organisations & their strategies in market area
to survive for longer period of time (Barraza, 2020). With rise of competition in market, it is
necessary to have proper evaluation of finance base of enterprise which is useful for analysis. It is
essential for enterprise to be aware about their financial structure and statements so that it easy to
achieve objectives. This report focuses on three firms which are Green-Core Group, Hilton Food
Group & The Premier Food Group. This report includes two sections which are section A and
section B.
SECTION A
1a.
Green Core PLC- It is firm which manufacture & distributes wide range of primary foods
as well as related products. For example- it also produces ingredients, prepared foods to customers
& industrial sectors. Main aim of company is to be global leader in FMCG sector. It has large
distribution channel and supply chain (Anghelache, 2018). It mainly has four strengths which are
home cooked meals, power people, Green core honesty and performance. To achieve their vision or
mission, they are required to access skilled employees and wide knowledge. Moreover, they uses
effective strategies so that decision making is done in correct way.
1b
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
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
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
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
ROE using Net income (%)-
Analysis- By analysis of this table, it has been seen that in 2019 & 2020 figures, ROE
which is ,also to be known as return of earning has been enhanced din form of Green core. It states
that there is improvement in productivity of firm that leads to positive returns. Whereas Hilton
Business were able to improve their equity yields. Also, it is seen that productivity of Premier Food
has been decreasing at rapid scale. Rate of earning play important role in making decisions &
improving of effectiveness of enterprise (Dabbicco, 2018).
ROCE (%)
Analysis- According to give figures in table, it has been analysed that Green Core has good
profitability ratio of 19.13 percent. Hilton Business ration is being decreasing by 2.96 percent. On
other hand, Premier Business is lacking of better efficiency of productivity which is negatively
impacting their overall structure.
Net profit margin:
Analysis- The net profit margin has been also growing of Green Core Business at wider
scale. In year 2020, it is analysed that net profit margin is increased. In viewpoint of Premier Food,
operating revenue for firm is around 5.18 percent. In case of Hilton Food Manufacturer, they have
been improving during those food manufacturer of 3 years. Net profit margin is required to be
determined so that further processes and cost are managed accordingly (Dang, 2018).
Gross margin-
Analysis- It is important to focus on gross margin as Green Core business as well as
Premier food chain has a better productivity. Both these organisations has been increasing their
productivity level at wider approach. In comparison of Hilton foods gross margin is not so strong.
It directly impact upon their goodwill as well as working pattern. Gross margin is to be defined as
comparison between revenue, cost of goods sold & it is expressed in terms of percentage. It depicts
that higher the cost, more revenue is being retained by firm. Further, it is responsibility of manager
to make assure that margins are utilised in correct way.

EBIT-
Analysis- It refers to Earnings before interest and taxes (EBIT), which act as indicator of
profitability. It is necessary to use this in effective so that decisions are made appropriately. In
relevance of Hilton business, they have been able to retain their profit ratio. Whereas other two
businesses of Green Core and Premier Food firm, they have been into loss in production in 2019.
EBIT is essential to be determined so that objectives are achieved in proper manner. Also,
accounting department of firms are needed to have proper analysis within firm on basis of which
effective results are achieved in future period of time.
Collection period:
Analysis- From table given, it is examined that it is crucial to collect cash from debtors and
in case of Premier business, they are successful in recovering of receivables amount and it helps in
running of business activities. Whereas Hilton Food firm has been slower into receiving of amount
from debtors (Fajar, 2020). On other hand, it is examined that collection has to be done properly so
that it is easy to use financial resources. Green core firm has decreased or reduced their turnaround
time of trade debts. By accessing to collection period, financial activities are carried out effectively.
Credit period:
Analysis- It is also crucial to pay credit amount which has been taken for business. So,
Green Core firm as well as Hilton Food Chain have been into same payback periods. Hilton food
took more time to uplift with commitments made by them towards others. It is essential for entity to
have proper knowledge regrading individuals or people who have taken credit from entity so that
there is adequate amount of money. It has been analysed that credit period is required to be within
medium period so that relations between customers, organisation & other people does not get
affected negatively.
Current ratio:
Analysis- This has been too analysed that it is crucial for enterprise to analyse current
ration on basis of which it is easy to made their decisions. In year 2019, Green Core PLC is able
maintain their ratio in correct way. This is too examined that company is able to manage their ratio
in appropriate manner (Floros, 2019).
Net assets turnover ratio
Analysis- It is also seen that in relevance of Hilton Food Group has vast financial resources
and it assist them in managing their turnover ratio. So, they are able to manage their liabilities as
well as assets in efficient manner. Whereas Premier Food has low net assets turnover ratio.
Through determining these ratio, company is able to analyse their importance of assets.
Shareholder fund per employee-

Analysis- Shareholders are important part of business who are able to impact on business
activities in appropriate manner. It is necessary to have appropriate knowledge about shareholders
within enterprise so that decisions are undertaken appropriately. The funds of Premier Food has
higher shareholder funds as compares to other brand. With help of these funds, it is easier to carry
out all activities in appropriate manner. With large funds of shareholders results in effective output
and depicts strength of business.
Total assets per employee-
Analysis- Employee are important assets of firm who help in increasing of productivity at
higher level. It is calculated as assets divided by number of full time equivalent employee on
payroll at end of period. It is necessary for organisation to be aware about assets as subordinates so
that decisions are made accordingly. Thus, there is substantial gap between two companies which
reflects their total assets per employee (Henderson, 2019).
So, from above explained paragraph, it has been concluded that it is necessary for entity to
have proper awareness regarding these definition of finance and need to be understand their analysis
on basis of which functions or operations are carried out in appropriate manner. It has been
evaluated that with using of these financial definitions risks are eliminated. Also, from analysis
Green Core is to be viewed as better from other two companies in comparison of all the factors. As
their finance department are more reliable and active regarding their growth as well as resources.
(Khaw, 2019).
SECTION B
2a
Internal data play crucial role in development and growth of business. It is important to
focus on financial data so that it is easy to make decision. In business, borrowing as well as lending
is part of entity. It is crucial to use these financial terms so that finance activities are done
accordingly. Financial management is critical process which is required to be understood with
proper considerations. Information related to finance is vast which is required to adopted with
proper consideration. In businesses, it is essential to use them & are such definitions are further
discussed below-
Retained earnings-
It is to be defined as amount which is left within business after once dividend has been
distributed. It is essential for all enterprises to have retained earning so that it is easier for entity to
carry out their activities in proper manner. Moreover, with help of retained earnings it is easy to
examine profitability ratio of business. It is essential for enterprises to have retained earnings on
basis of which entity are aware about their financial strength in management which assist in

achieving of objectives in proper manner. In context of selected entity, they have to use their
retained earnings in most appropriate manner (Li, 2018).
Equity financing-
In businesses, it is necessary to be aware about situations so that capital is being raised in
appropriate manner. It refers to process of generating funds in terms exchanging ownership with
money (Manzoor, 2020). Also, when an equity investor invest in company they invest in ownership
of business. It is quick and effective source through which funds are being raised in proper manner.
It has been examined that all three firms can use this source of funding with aim of expansion of
business further. There are basically three forms of investors such as angel investors, venture
capitalists and strategic partners. There are several benefits of equity financing like business
experience & contacts .
Debt financing-
It refers to process by which company generates money from selling of their bonds, bills,
notes, to organisations, or individuals. In return of exchange or taking money some amount of
principle or interest is being charged by as a debt. Individual has to pay interest to fulfil the debt
amount. It depends upon entity position to use debt financing or not. Furthermore, in relevance of
all stated entity they need to conduct a proper market analysis so that it is easier to decide how to
generate money for business and though what ways or approaches. It is duty of manager to repay
debts taken on time period because interest is charged on every day (Nariswari, 2020).
Term loan
Loans are being considered as most effective way of generating money for business
activities or operations. It is responsibility of account departments to ensure that loans are taken
with specific purpose only and with reliable amount. Term loans are also used by many enterprises
to generate capital for activities (Petruchenya, 2018).Term loan is defined as loan from a bank
which has particular amount and payback period with fixed interest rate. In relevance of given
enterprises, they can also take term loans which help them in achieving of business objectives at
wider scale. n addition, to decrease the interest sums and the overall cost of the mortgage, a loan
rate can include a large lump sum. In business financing, a revolving loan is normally between and
one 25 years for machinery, property development, or system equipment written off. Sometimes a
small company uses the money from a revolving loan to buy capital assets for the manufacturing
operation, such as machinery or a new home. There are two types of term loans which are discussed
below-
Short term loan- It is type of term loan which is to be repaid within 12 months or 24
months. It is used when business is required to achieve their short term objectives within period of

time (Wari, 2016).
Long term loan- In this type of loan, they are being used when long term objectives are to
be fulfilled by entity.
There are also various types of category of loans which are secured loan and unsecured
loans. Depending upon company requirements or demands, these loans are adopted by enterprise.
From above discussed matter, it has been seen that it is necessary to have appropriate market
information so that whether to take loans or not is properly analysed (Barraza, 2020).

CONCLUSION
After a brief analysis of above report, it has been concluded that in business it is crucial for
enterprise to have appropriate knowledge about financial statements and accounting concepts so
that it is easy to make correct decisions. So, discussions have been made about different types of
ratio, net profit margin, gross margin, credit period, collection period. Furthermore, shareholder
funds, total assets of employee has been discussed briefly. It has been evaluated that it is necessary
for firm to update their financial structure so that goals are accomplished appropriately. It is duty of
manager of company to have relevant information regarding these financial statements which assist
in increasing efficiency level of business at higher level.

REFERENCES
Books & Journal:
Anghelache, 2018. Portfolio of Loans, Guarantees and Provisions. International Journal of
Academic Research in Accounting, Finance and Management Sciences, 8(2), pp.126-131.
Barraza, 2020. Economic policy uncertainty and the supply of business loans. Journal of Banking &
Finance,121, p.105983.
Dabbicco, 2018. A comparison of debt measures in fiscal statistics and public sector financial
statements.Public Money & Management,38(7), pp.511-518.
Dang, 2018. Effects of financial statements information on firms’ value: evidence from Vietnamese
listed firms. Investment Management and Financial Innovations, 15(4), pp.210-218.
Fajar, 2020. Analisis Pertumbuhan Penjualan, Gross Profit Margin, Dan Shrinkage Terhadap
Pertumbuhan Laba. Jurnal Sain Manajemen, 2(2), pp.20-27.
Floros, 2019. Discretionary Disclosure and the Equity Financing Choice. Available at SSRN
3352143.
Henderson, 2019. Assessing the role of foreign direct investment in the food manufacturing
industry. In Competitiveness in international food markets (pp. 203-230). CRC Press.
Khaw, 2019. Cost of debt financing: Does political connection matter?. Emerging Markets Review,
41(C).
Li, 2018. Financial statements based bank risk aggregation. Review of Quantitative Finance and
Accounting, 50(3), pp.673-694.
Manzoor, 2020.Determinants of Equity Financing: A Study of Non-Financial Firms Listed on
Pakistan Stock Exchange(Doctoral dissertation, CAPITAL UNIVERSITY).
Nariswari, 2020. Profit Growth: Impact of Net Profit Margin, Gross Profit Margin and Total Assests
Turnover. International Journal of Finance & Banking Studies (2147-4486), 9(4), pp.87-96.
Petruchenya, 2018.Essays on Cooperatives: Emergence, Retained Earnings, and Market Shares
(No. EPS-2018-447-ORG).
Wari, 2016. A survey on metaheuristics for optimization in food manufacturing industry.Applied
Soft Computing,46, pp.328-343.