Business Simulation Reflective Report: Skill Development Analysis
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This assignment is a comprehensive reflective report on a student's experience with a business simulation, analyzing its impact on the development of key employability skills, including collaboration, leadership, achieving deadlines, critical evaluation, data synthesis, and problem-solving. Part A focuses on a reflective statement discussing the development of these skills through the simulation, referencing academic literature. Part B involves an analysis of the student's company, Divine Motors, within the LION Group, using financial ratio analysis to assess its performance against other member companies. The report examines profit and loss account ratios, balance sheet ratios, and capital ratios, providing insights into Divine Motors' strengths and weaknesses, while comparing its performance with the group's mean average values. The assignment aims to connect theoretical knowledge with practical application, fostering commercial awareness and providing a detailed analysis of the student's performance in the simulation.
STUDENT
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BUSINESS SIMULATION
PART - A
REFLECTIVE STATEMENT
Introduction
Our approach to employability, when we are graduating, is a reflection about our
process of learning and developing skills, which we are taught is a key aspect of
employability training. We also accept, as I read in a recent HEA publication of Owens
& Tibby, (2014), and I quote “that Graduates need the skills, capabilities and attributes
to enable them to be successful in an ever changing global economic environment”
unquote. We are provided a broad, generic yet a very motivating view of the work
culture which we are about to embrace. Yet, as students, we are not getting enough
practical opportunities of exploring and developing our own employability profiles and
plans beyond our graduation realm.
Identifying Student Perspective of Skills
Throughout our study module, we explored a standard set of six skills, which broadly
related to the students’ perspective of skills and about the skills which were believed to
be acquired by us to further develop our employability scope. These are:
1. Collaboration and Teamwork
2. Leadership
3. Achieving Deadlines
4. Critical Evaluation and Analysis
5. Synthesis of Data
6. Solution to Real World Problems
Although our aim in this paper is to provide an understanding about development of
each of these skills, I found that one main exception is Commercial Awareness,
although, as learners, we can improvise on this while learning the sixth skill, say Owens
& Tibby, (2014).
BUSINESS SIMULATION
PART - A
REFLECTIVE STATEMENT
Introduction
Our approach to employability, when we are graduating, is a reflection about our
process of learning and developing skills, which we are taught is a key aspect of
employability training. We also accept, as I read in a recent HEA publication of Owens
& Tibby, (2014), and I quote “that Graduates need the skills, capabilities and attributes
to enable them to be successful in an ever changing global economic environment”
unquote. We are provided a broad, generic yet a very motivating view of the work
culture which we are about to embrace. Yet, as students, we are not getting enough
practical opportunities of exploring and developing our own employability profiles and
plans beyond our graduation realm.
Identifying Student Perspective of Skills
Throughout our study module, we explored a standard set of six skills, which broadly
related to the students’ perspective of skills and about the skills which were believed to
be acquired by us to further develop our employability scope. These are:
1. Collaboration and Teamwork
2. Leadership
3. Achieving Deadlines
4. Critical Evaluation and Analysis
5. Synthesis of Data
6. Solution to Real World Problems
Although our aim in this paper is to provide an understanding about development of
each of these skills, I found that one main exception is Commercial Awareness,
although, as learners, we can improvise on this while learning the sixth skill, say Owens
& Tibby, (2014).
Page2
Table – 1
Which of the following skills do you think are most important to employers?
Skill 2013 (n=66) 2014 (n=58)
Initiative/Self-Motivation 64% 57%
Time Management 48% 55%
Planning and Organisation 48% 52%
Teamwork 41% 53%
Verbal Communication 41 % 50 %
Analysis and Investigation 23% 12%
Independence 11% 10%
Information Technology/Computer Skills 11% 5%
Written Communication 11% 2%
Commercial Awareness 3% 3%
Table-1 highlights results from a questionnaire related to employability posed to
students. From these results, we can identify the students’ perspective of what skills are
important to employers. There seems to be a general consensus that six most important
skills chosen by the students are - Self-Motivation; Time Management; Planning and
Organisation, Teamwork, Verbal Communication and Analysis and Investigation, as
stated by Corker & Holland, (2015).
Rationalising Skill Factors
What the students are taught and what is their perception are two factors which are seen
to contrastingly different. In my opinion, in order to understand this anomaly, we need
to discuss the employability profiles and then find for ourselves how we can reach out
to them as individuals, after completing our degree level study, explain Corker &
Holland, (2014). We may study as a composite group, but eventually we are progressing
in life as individuals. Individuals who have to learn Team Work Skill to build a
cohesive, Communication Skill so that we can make ourselves understood and Time
Management so that we can put value to the contributions made by other team
members, assert Bramhall & Corker, (2012). We also need to comprehensively
Table – 1
Which of the following skills do you think are most important to employers?
Skill 2013 (n=66) 2014 (n=58)
Initiative/Self-Motivation 64% 57%
Time Management 48% 55%
Planning and Organisation 48% 52%
Teamwork 41% 53%
Verbal Communication 41 % 50 %
Analysis and Investigation 23% 12%
Independence 11% 10%
Information Technology/Computer Skills 11% 5%
Written Communication 11% 2%
Commercial Awareness 3% 3%
Table-1 highlights results from a questionnaire related to employability posed to
students. From these results, we can identify the students’ perspective of what skills are
important to employers. There seems to be a general consensus that six most important
skills chosen by the students are - Self-Motivation; Time Management; Planning and
Organisation, Teamwork, Verbal Communication and Analysis and Investigation, as
stated by Corker & Holland, (2015).
Rationalising Skill Factors
What the students are taught and what is their perception are two factors which are seen
to contrastingly different. In my opinion, in order to understand this anomaly, we need
to discuss the employability profiles and then find for ourselves how we can reach out
to them as individuals, after completing our degree level study, explain Corker &
Holland, (2014). We may study as a composite group, but eventually we are progressing
in life as individuals. Individuals who have to learn Team Work Skill to build a
cohesive, Communication Skill so that we can make ourselves understood and Time
Management so that we can put value to the contributions made by other team
members, assert Bramhall & Corker, (2012). We also need to comprehensively
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understand how we can encompass all our attributes, competencies, experiences,
knowledge and skills into our personality and still be able to present our profile as a
team member as stated by Moore (Ed.) et al, (2010).
We can easily rationalise the factors of a skill if we pose to ourselves the following
questions and find brief answers to each:
(a) What is this skill?
(b) Have we used it in the past?
(c) Have we developed it while being part of a project?
(d) How we can continue to develop it?
(e) Will it be useful in our future studies?
(f) Will it be relevant to one of my future careers?
Once a reflection has been done on these six factors, we can assess that the first three
factors are related to Our Reflection and the final three factors relate to future
opportunities, It is also easy to connect them, as the last three are dependent on the first
three and the first three lay the foundation for the final three, explains Robertson,
(2010).
How to Enhance Our Values
After closely studying the above discussed details, I was sure that I had to ask myself
the six questions (a) to (f) and find sincere answers to them, as per Prospects, (2014). I
interlinked these with the observations posted in Table-1 and came with the following
equations, as suggested by QAA, (2001).
Q-1. Self-Motivation: What is this skill?
A-1. This skill encourages me to question every motive I chose in my career and to find
an honest answer for the choice.
Q-2. Time Management: Have I used it in the past?
A-2. Honestly, we seldom care for time management and when we do, it is too late.
Q-3. Planning and Organisation: Have we developed it while being part of a project?
understand how we can encompass all our attributes, competencies, experiences,
knowledge and skills into our personality and still be able to present our profile as a
team member as stated by Moore (Ed.) et al, (2010).
We can easily rationalise the factors of a skill if we pose to ourselves the following
questions and find brief answers to each:
(a) What is this skill?
(b) Have we used it in the past?
(c) Have we developed it while being part of a project?
(d) How we can continue to develop it?
(e) Will it be useful in our future studies?
(f) Will it be relevant to one of my future careers?
Once a reflection has been done on these six factors, we can assess that the first three
factors are related to Our Reflection and the final three factors relate to future
opportunities, It is also easy to connect them, as the last three are dependent on the first
three and the first three lay the foundation for the final three, explains Robertson,
(2010).
How to Enhance Our Values
After closely studying the above discussed details, I was sure that I had to ask myself
the six questions (a) to (f) and find sincere answers to them, as per Prospects, (2014). I
interlinked these with the observations posted in Table-1 and came with the following
equations, as suggested by QAA, (2001).
Q-1. Self-Motivation: What is this skill?
A-1. This skill encourages me to question every motive I chose in my career and to find
an honest answer for the choice.
Q-2. Time Management: Have I used it in the past?
A-2. Honestly, we seldom care for time management and when we do, it is too late.
Q-3. Planning and Organisation: Have we developed it while being part of a project?
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A-3. This is Team Work and will always fail when working as a team is ignored.
Q-4. Teamwork: How we can continue to develop it?
A-4. In my view, all the five other factors culminate to originate team work.
Q-5: Analysis and Investigation: Will it be useful in our future studies?
A-5.If I do not analyse my present I cannot plan for my future.
Q-6. Commercial Awareness: Will it be relevant to one of my future careers?
A-6: Commercial Awareness refers to being practical in all that we do. During our
learning days we need to be analytical and investigative but during our earning days we
need to consider the commercial benefits and financial results achieved.
Conclusion
Reflecting at the data in Table-1 and comparing it with the questions (a) to (f) posed
above, I realise how unrealistic we have become. None of the questions mentioned
under (a) to (f) found a prominent place in the observations of the students recorded in
Table-1. Is it the failure of our academic curriculum, ask Pegg et al, (2012), or lack of
understanding on the part of the students studying in colleges and preparing themselves
for the harsh realities of life? Are we being nurtured under a make-believe conditional
atmosphere, question Owens & Tibby, (2014), or we are being trained to face all
eventualities which will have to face when we will be left on our own? We need to
adopt these factors and understand the hidden meaning, states Moore (Ed.) et al, (2010).
We will learn it easily, according to Corker & Holland, (2015); Corker & Holland,
(2014), if we compare the factors with the real-life situations and then arrive at the
resultant Commercial Awareness.
A-3. This is Team Work and will always fail when working as a team is ignored.
Q-4. Teamwork: How we can continue to develop it?
A-4. In my view, all the five other factors culminate to originate team work.
Q-5: Analysis and Investigation: Will it be useful in our future studies?
A-5.If I do not analyse my present I cannot plan for my future.
Q-6. Commercial Awareness: Will it be relevant to one of my future careers?
A-6: Commercial Awareness refers to being practical in all that we do. During our
learning days we need to be analytical and investigative but during our earning days we
need to consider the commercial benefits and financial results achieved.
Conclusion
Reflecting at the data in Table-1 and comparing it with the questions (a) to (f) posed
above, I realise how unrealistic we have become. None of the questions mentioned
under (a) to (f) found a prominent place in the observations of the students recorded in
Table-1. Is it the failure of our academic curriculum, ask Pegg et al, (2012), or lack of
understanding on the part of the students studying in colleges and preparing themselves
for the harsh realities of life? Are we being nurtured under a make-believe conditional
atmosphere, question Owens & Tibby, (2014), or we are being trained to face all
eventualities which will have to face when we will be left on our own? We need to
adopt these factors and understand the hidden meaning, states Moore (Ed.) et al, (2010).
We will learn it easily, according to Corker & Holland, (2015); Corker & Holland,
(2014), if we compare the factors with the real-life situations and then arrive at the
resultant Commercial Awareness.
Page5
PART - B
PERFORMANCE OF DIVINE MOTORS
The following spreadsheet containing the Ratio Analysis of the member companies
belonging to the LION GROUP shows the comparative analysis of my company, Divine
Motors with the other 8 member companies of this group.
01. 02. 03. 04. 05. 06. 07. 08. 09.
01. Gross Margin (Gross Profit/Sales)*100% 45.20% 28.61% 30.05% 26.04% 34.76% 36.50% 33.60% 23.30% 28.15% 31.80%
02. Sales Margin (Operating Profit/Sales)*100% 34.24% 12.58% -15.96% 13.47% 21.33% 23.63% 11.04% 9.31% -0.20% 12.16%
03. Post-Tax Profit to Sales (Post-Tax Profitt/Sales)*100% 29.33% 10.60% -16.99% 15.49% 25.47% 20.31% 9.98% 7.81% -2.00% 11.11%
04. Pre-Tax Profit per Employee Pre-Tax Profit/Total Workforce 0.46 0.13 -0.09 0.20 2.34 0.40 0.16 0.13 0.00 0.41
05. Interest Cover Operating Profit/(Loan Interest+Overdraft Interest) 1,654.00 281.31 -2.87 758.35 783.11 31.36 57.62 8.70 -0.07 396.84
06. Return on Net Assets (Post-Tax Profit/Total Net Assets)*100% 29.04% 21.99% -18.32% 41.67% 13.63% 23.53% 28.13% 18.50% -3.75% 17.16%
07. Return on Shareholders Funds (Pre-Tax Profit/Total Reserves)*100% 37.23% 28.20% -52.92% 50.73% 17.06% 33.32% 37.81% 32.70% -8.71% 19.49%
08. Return on Capital Employed (Operating Profit/Total Capital Employed)*100% 33.90% 26.11% -17.22% 36.24% 11.41% 27.38% 31.09% 22.07% -0.37% 18.96%
09. Current Ratio Current Assets/Current Liabilities 7.01 3.35 4.90 1.64 7.54 6.57 2.32 2.06 4.29 4.41
10. Quick Ratio (Current Assets - Stock)/Current Liabilities 7.01 3.35 2.94 1.62 7.54 6.57 2.24 1.90 4.29 4.16
11. Liquidity Ratio Bank Balance/Current Liabilities 5.64 3.08 2.38 1.28 6.47 5.72 1.64 1.55 2.83 3.40
12. Gearing Normal Loan/Total Capital Employed 0.00 0.00 0.65 0.00 0.00 0.10 0.06 0.28 0.57 0.18
13. Net Gearing Net Debt/Net Capital Employed 0.15 0.21 2.35 0.65 0.12 0.27 0.47 1.09 1.57 0.76
14. Earnings per Share (£) Post-Tax Profit/Number of Shares Issued 2.83 0.39 -0.48 1.74 1.85 2.48 1.89 1.16 -0.08 1.31
15. PE Ratio Share Price/Earnings per Share 0.35 2.56 -2.08 0.57 0.54 0.40 0.53 0.86 -12.50 -0.97
16. Dividend Cover Earnings per Share/Dividend per Share 9.43 4.33 -48.00 1.74 46.25 7.09 4.73 38.67 -0.08 7.13
CAPITAL RATIOS
OID - 947364: Executive Business Simulation
Comparative Analysis of Financial Ratios for Member Companies of Group LION
S. No. Ratio Formula
Member Companies of Group LION
MEAN
VALUEDivine
Motors
Germany
Motors
Flyonol
Motors Pluto HADR sea dog Crest
Motors ALPHA LION
LTD.
PROFIT & LOSS ACCOUNT RATIOS
BALANCE SHEET RATIOS
PART - B
PERFORMANCE OF DIVINE MOTORS
The following spreadsheet containing the Ratio Analysis of the member companies
belonging to the LION GROUP shows the comparative analysis of my company, Divine
Motors with the other 8 member companies of this group.
01. 02. 03. 04. 05. 06. 07. 08. 09.
01. Gross Margin (Gross Profit/Sales)*100% 45.20% 28.61% 30.05% 26.04% 34.76% 36.50% 33.60% 23.30% 28.15% 31.80%
02. Sales Margin (Operating Profit/Sales)*100% 34.24% 12.58% -15.96% 13.47% 21.33% 23.63% 11.04% 9.31% -0.20% 12.16%
03. Post-Tax Profit to Sales (Post-Tax Profitt/Sales)*100% 29.33% 10.60% -16.99% 15.49% 25.47% 20.31% 9.98% 7.81% -2.00% 11.11%
04. Pre-Tax Profit per Employee Pre-Tax Profit/Total Workforce 0.46 0.13 -0.09 0.20 2.34 0.40 0.16 0.13 0.00 0.41
05. Interest Cover Operating Profit/(Loan Interest+Overdraft Interest) 1,654.00 281.31 -2.87 758.35 783.11 31.36 57.62 8.70 -0.07 396.84
06. Return on Net Assets (Post-Tax Profit/Total Net Assets)*100% 29.04% 21.99% -18.32% 41.67% 13.63% 23.53% 28.13% 18.50% -3.75% 17.16%
07. Return on Shareholders Funds (Pre-Tax Profit/Total Reserves)*100% 37.23% 28.20% -52.92% 50.73% 17.06% 33.32% 37.81% 32.70% -8.71% 19.49%
08. Return on Capital Employed (Operating Profit/Total Capital Employed)*100% 33.90% 26.11% -17.22% 36.24% 11.41% 27.38% 31.09% 22.07% -0.37% 18.96%
09. Current Ratio Current Assets/Current Liabilities 7.01 3.35 4.90 1.64 7.54 6.57 2.32 2.06 4.29 4.41
10. Quick Ratio (Current Assets - Stock)/Current Liabilities 7.01 3.35 2.94 1.62 7.54 6.57 2.24 1.90 4.29 4.16
11. Liquidity Ratio Bank Balance/Current Liabilities 5.64 3.08 2.38 1.28 6.47 5.72 1.64 1.55 2.83 3.40
12. Gearing Normal Loan/Total Capital Employed 0.00 0.00 0.65 0.00 0.00 0.10 0.06 0.28 0.57 0.18
13. Net Gearing Net Debt/Net Capital Employed 0.15 0.21 2.35 0.65 0.12 0.27 0.47 1.09 1.57 0.76
14. Earnings per Share (£) Post-Tax Profit/Number of Shares Issued 2.83 0.39 -0.48 1.74 1.85 2.48 1.89 1.16 -0.08 1.31
15. PE Ratio Share Price/Earnings per Share 0.35 2.56 -2.08 0.57 0.54 0.40 0.53 0.86 -12.50 -0.97
16. Dividend Cover Earnings per Share/Dividend per Share 9.43 4.33 -48.00 1.74 46.25 7.09 4.73 38.67 -0.08 7.13
CAPITAL RATIOS
OID - 947364: Executive Business Simulation
Comparative Analysis of Financial Ratios for Member Companies of Group LION
S. No. Ratio Formula
Member Companies of Group LION
MEAN
VALUEDivine
Motors
Germany
Motors
Flyonol
Motors Pluto HADR sea dog Crest
Motors ALPHA LION
LTD.
PROFIT & LOSS ACCOUNT RATIOS
BALANCE SHEET RATIOS
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ANALYSIS OF FINANCIAL RATIOS OF DIVINE MOTORS –
A MEMBER COMPANY OF GROUP LION
A. Profit and Loss Account Ratios and Indicators
01. Gross Margin
Gross Margin is a measure of manufacturing profitability.
Analysis
At 45.20%, Divine Motors shows best manufacturing profitability and is well above the
Mean Average Value of 31.80% of Group Lion.
02. Sales Margin
Sales Margin is a measure of the operating efficiency of the company.
Analysis
At 34.24%, Divine Motors shows best operating efficiency and is well above the Mean
Average Value of 12.16% of Group Lion.
03. Post-Tax Profit over Sales
Post-Tax Profit over Sales is an overall measure of company profitability after all costs
have been deducted.
Analysis
At 29.33%, Divine Motors shows best company profitability and is well above the
Mean Average Value of 11.11% of Group Lion.
04. Pre-Tax Profit per Employee
Pre-Tax Profit per Employee is a measure of the overall productivity of the workforce.
Analysis
At 00.46, Divine Motors shows best overall productivity of its workforce and is well
above the Mean Average Value of 00.41 of Group Lion.
B. Balance Sheet Ratios and Indicators
ANALYSIS OF FINANCIAL RATIOS OF DIVINE MOTORS –
A MEMBER COMPANY OF GROUP LION
A. Profit and Loss Account Ratios and Indicators
01. Gross Margin
Gross Margin is a measure of manufacturing profitability.
Analysis
At 45.20%, Divine Motors shows best manufacturing profitability and is well above the
Mean Average Value of 31.80% of Group Lion.
02. Sales Margin
Sales Margin is a measure of the operating efficiency of the company.
Analysis
At 34.24%, Divine Motors shows best operating efficiency and is well above the Mean
Average Value of 12.16% of Group Lion.
03. Post-Tax Profit over Sales
Post-Tax Profit over Sales is an overall measure of company profitability after all costs
have been deducted.
Analysis
At 29.33%, Divine Motors shows best company profitability and is well above the
Mean Average Value of 11.11% of Group Lion.
04. Pre-Tax Profit per Employee
Pre-Tax Profit per Employee is a measure of the overall productivity of the workforce.
Analysis
At 00.46, Divine Motors shows best overall productivity of its workforce and is well
above the Mean Average Value of 00.41 of Group Lion.
B. Balance Sheet Ratios and Indicators
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05. Interest Cover
Interest Cover is used for assessing the strength of Operating Profit in comparison to
interests paid.
Analysis
At 1,654.00, Divine Motors shows best operating profit strength and is well above the
Mean Average Value of 396.84 of Group Lion.
06. Return on Assets (ROA)
Return on Assets (ROA) is the link between Profit and Loss Account and Balance
Sheet.
Analysis
At 29.04%, Divine Motors shows best ROA and is well above the Mean Average Value
of 17.16% of Group Lion.
07. Return on Shareholder Funds
Return on Shareholder Funds shows profit as a percentage of shareholder funds which
have been invested in the business for making profit.
Analysis
At 37.23%, Divine Motors shows best return on shareholder funds and this is well
above the Mean Average Value of 19.49% of Group Lion.
08. Return on Capital Employed (ROCE)
Return on Capital Employed (ROCE) shows the Operating Profit as percentage of total
capital made up of shareholder funds and loans employed in the business.
Analysis
At 33.90%, Divine Motors shows best ability to generate profit and is well above the
Mean Average Value of 18.96% of Group Lion.
09. Current Ratio
Current Ratio is the measure of company's ability in responding to short term cash
demands.
Analysis
At 07.01, Divine Motors shows best response of meeting short term cash demand and is
well above the Mean Average Value of 04.41 of Group Lion.
05. Interest Cover
Interest Cover is used for assessing the strength of Operating Profit in comparison to
interests paid.
Analysis
At 1,654.00, Divine Motors shows best operating profit strength and is well above the
Mean Average Value of 396.84 of Group Lion.
06. Return on Assets (ROA)
Return on Assets (ROA) is the link between Profit and Loss Account and Balance
Sheet.
Analysis
At 29.04%, Divine Motors shows best ROA and is well above the Mean Average Value
of 17.16% of Group Lion.
07. Return on Shareholder Funds
Return on Shareholder Funds shows profit as a percentage of shareholder funds which
have been invested in the business for making profit.
Analysis
At 37.23%, Divine Motors shows best return on shareholder funds and this is well
above the Mean Average Value of 19.49% of Group Lion.
08. Return on Capital Employed (ROCE)
Return on Capital Employed (ROCE) shows the Operating Profit as percentage of total
capital made up of shareholder funds and loans employed in the business.
Analysis
At 33.90%, Divine Motors shows best ability to generate profit and is well above the
Mean Average Value of 18.96% of Group Lion.
09. Current Ratio
Current Ratio is the measure of company's ability in responding to short term cash
demands.
Analysis
At 07.01, Divine Motors shows best response of meeting short term cash demand and is
well above the Mean Average Value of 04.41 of Group Lion.
Page8
10. Quick Ratio
Quick Ratio is a stringent measure compared to the Current Ratio, as it assumes that
stock cannot be sold quickly for raising ready cash for paying off debts.
Analysis
At 07.01, Divine Motors shows best ability for paying its debts and is well above the
Mean Average Value of 04.16 of Group Lion.
11. Liquidity Ratio
Liquidity Ratio measures company’s short-term strength of paying off short-term debts.
Analysis
At 05.64, Divine Motors shows best ability of paying off its short term debts and is well
above the Mean Average Value of 03.40 of Group Lion.
12. Gearing
Gearing of a company shows the proportion of capital raised through loans in
comparison to its share capital and profits which have been re-invested in the business.
Analysis
At 00.00, Divine Motors shows best ability of relying on its own funds and this is well
below the Mean Average Value of 00.18 of Group Lion.
13. Net Gearing
Net gearing, although similar to gearing, differs on the point of including bank balance,
including short-term deposits and short-term overdraft, in the calculation.
Analysis
At 00.84, Divine Motors shows that its Net Gearing is well above the Mean Average
Value of 00.74 of Group Lion and is not a satisfactory sign.
C. Stock Market Ratios and Indicators
14. Earnings per Share (EPS)
Earnings per Share (EPS) shows the profit which a company makes on each share of the
business.
10. Quick Ratio
Quick Ratio is a stringent measure compared to the Current Ratio, as it assumes that
stock cannot be sold quickly for raising ready cash for paying off debts.
Analysis
At 07.01, Divine Motors shows best ability for paying its debts and is well above the
Mean Average Value of 04.16 of Group Lion.
11. Liquidity Ratio
Liquidity Ratio measures company’s short-term strength of paying off short-term debts.
Analysis
At 05.64, Divine Motors shows best ability of paying off its short term debts and is well
above the Mean Average Value of 03.40 of Group Lion.
12. Gearing
Gearing of a company shows the proportion of capital raised through loans in
comparison to its share capital and profits which have been re-invested in the business.
Analysis
At 00.00, Divine Motors shows best ability of relying on its own funds and this is well
below the Mean Average Value of 00.18 of Group Lion.
13. Net Gearing
Net gearing, although similar to gearing, differs on the point of including bank balance,
including short-term deposits and short-term overdraft, in the calculation.
Analysis
At 00.84, Divine Motors shows that its Net Gearing is well above the Mean Average
Value of 00.74 of Group Lion and is not a satisfactory sign.
C. Stock Market Ratios and Indicators
14. Earnings per Share (EPS)
Earnings per Share (EPS) shows the profit which a company makes on each share of the
business.
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Analysis
At 02.83, Divine Motors has shown that it makes good profit on each share and this is
also well above the Mean Average Value of 01.31 of Group Lion.
15. The price to earnings (PE)
The price to earnings (PE) ratio shows the current share price in comparison to the
earning per share.
Analysis
At 00.35, Divine Motors shows that it is holding a good price of its shares and this is
well above the Mean Average Value of (-) 00.97 of Group Lion.
16. Dividend Cover
Dividend cover compares the earnings per share to dividend paid by the company on
each share.
Analysis
At 09.43, Divine Motors is showing the best cover for its dividend paying capability and
this is well above the Mean Average Value of 07.13 of Group Lion.
Analysis
At 02.83, Divine Motors has shown that it makes good profit on each share and this is
also well above the Mean Average Value of 01.31 of Group Lion.
15. The price to earnings (PE)
The price to earnings (PE) ratio shows the current share price in comparison to the
earning per share.
Analysis
At 00.35, Divine Motors shows that it is holding a good price of its shares and this is
well above the Mean Average Value of (-) 00.97 of Group Lion.
16. Dividend Cover
Dividend cover compares the earnings per share to dividend paid by the company on
each share.
Analysis
At 09.43, Divine Motors is showing the best cover for its dividend paying capability and
this is well above the Mean Average Value of 07.13 of Group Lion.
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Page10
PESTEL ANALYSIS OF DIVINE MOTORS:
TEAM 1 OF THE LION GROUP
POLITICAL
01. As per the Social Responsibility Act, the company shall
reciprocate to the society by extending co-operation and by
keeping regard of mutual priorities.
02. The company shall continue its support to the society even if
there is a change in the country’s political leadership.
03. The company shall continue its cooperation with the society
even during a conflict in the world which may result in an
increased extremism in the society.
ECONOMIC
01. When profits are reduced, management must identify
alternate sources of funds for meeting company expenses in
the coming months.
02. Introduction of new initiatives may impact the CSR in
sustaining the changed economic situation.
03. An economic instability in the region can also result in
increased number of the workers looking for alternate
employment sources.
SOCIAL
01. The management has responsibility of remaining vigilant in
situations of social unrest to avoid tension among workers.
02. An increase in the unemployment rate may result in an
increase in homelessness among workers.
03. In case there is reduction in the employment opportunities,
management can make arrangements for the migrant
workers to return to their home towns.
PESTEL ANALYSIS OF DIVINE MOTORS:
TEAM 1 OF THE LION GROUP
POLITICAL
01. As per the Social Responsibility Act, the company shall
reciprocate to the society by extending co-operation and by
keeping regard of mutual priorities.
02. The company shall continue its support to the society even if
there is a change in the country’s political leadership.
03. The company shall continue its cooperation with the society
even during a conflict in the world which may result in an
increased extremism in the society.
ECONOMIC
01. When profits are reduced, management must identify
alternate sources of funds for meeting company expenses in
the coming months.
02. Introduction of new initiatives may impact the CSR in
sustaining the changed economic situation.
03. An economic instability in the region can also result in
increased number of the workers looking for alternate
employment sources.
SOCIAL
01. The management has responsibility of remaining vigilant in
situations of social unrest to avoid tension among workers.
02. An increase in the unemployment rate may result in an
increase in homelessness among workers.
03. In case there is reduction in the employment opportunities,
management can make arrangements for the migrant
workers to return to their home towns.
Page11
TECHNOLOGICAL
01. Community safety information through social networking
messages can also help authorities in reducing unrest in the
society.
02. Social networking is an effective medium to control
exploitation as well as mobilisation of connected
individuals thereby reducing interference from external
factors.
03. Improvements in building and environmental designs shall
reduce the crime rate in the society.
LEGAL
01. Establishing neighbourhood councils can control unrest by
promoting understanding among different communities.
02. Through consultation and negotiations, the management
can request the Government to introduce a legislation for
introducing new rules and policies for tackling anti-social
elements.
03. Remedies for Anti-Social Behaviour (ASB) must be
proposed to local authorities by the management to tackle
ASB.
TECHNOLOGICAL
01. Community safety information through social networking
messages can also help authorities in reducing unrest in the
society.
02. Social networking is an effective medium to control
exploitation as well as mobilisation of connected
individuals thereby reducing interference from external
factors.
03. Improvements in building and environmental designs shall
reduce the crime rate in the society.
LEGAL
01. Establishing neighbourhood councils can control unrest by
promoting understanding among different communities.
02. Through consultation and negotiations, the management
can request the Government to introduce a legislation for
introducing new rules and policies for tackling anti-social
elements.
03. Remedies for Anti-Social Behaviour (ASB) must be
proposed to local authorities by the management to tackle
ASB.
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