A Comprehensive Ratio Analysis of Two UK FMCG Companies: A Report

This report presents a comprehensive ratio analysis of two prominent UK FMCG (Fast Moving Consumer Goods) companies: Reckitt Benckiser and Associated British Foods PLC. The analysis encompasses various financial ratios, including profitability ratios (Gross Profit Ratio, Net Profit Ratio, and Operating Profit Ratio), liquidity ratios (Current Ratio and Acid Test Ratio), and capital structure and gearing ratios (Debt Ratio, Debt Equity Ratio, and Interest Coverage Ratio). The study evaluates the companies' financial performance over a period, highlighting trends, strengths, and weaknesses based on the calculated ratios. The report also provides a comparative assessment, drawing conclusions and offering recommendations regarding the financial health and performance of both companies, including a discussion of their liquidity positions, capital structures, and growth metrics. The report relies on financial data to assess the efficiency and financial standing of the companies.

UK FMCG FIRMS
RECKITTBENCKISER GROUP PLC ANDASSOCIATED BRITISH FOODS PLC
ANALYSIS OF RATIOS

Ratio Analysis of Reckitt Benckiser and Associated British Foods PLC
EXECUTIVE SUMMARY:
FMCG stands for FAST MOVING CONSUMER GOODS. Companies involved in FMCG
Sector sell their products to consumers through retail market. Consumers purchases these
goods very frequently, as these fast moving consumer goods have a very short life and
relatively low cost. Fast moving consumer goods include food, beverages, toiletries etc..Here,
we have been asked to report on the financial performance of two companies from the UK
FMCG Firms. There are too many firms engaged in FMCG Sector bur here, I have choosen
two FMCG Firms one is RECKITT BENKISER and another one is Associated British Foods
Plc.
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Ratio Analysis of Reckitt Benckiser and Associated British Foods PLC
Table of Contents
INTRODUCTION OF COMPANIES:..........................................................................................................4
RECKITT BENCKISER:..........................................................................................................................4
Associated British Foods, PLC:...........................................................................................................4
Analysis of the profitability of the Reckitt Benckiser and Associated British Foods PLC:-......................5
Gross Profit Ratio:..............................................................................................................................5
Net Profit Ratio:.................................................................................................................................5
Operating Profit Ratio:.......................................................................................................................6
Analysis of Liquidity Position of the company:......................................................................................6
Current Ratio:....................................................................................................................................7
Acid Test Ratio:..................................................................................................................................7
Analysis of Gearing & Capital Structure and Growth Ratios:-................................................................7
Debt Ratio:.........................................................................................................................................8
Debt Equity Ratio:-............................................................................................................................8
Interest Coverage Ratio:....................................................................................................................8
Growth Ratio:-.......................................................................................................................................9
Price Earning Ratio:............................................................................................................................9
Dividend Yield ratio:..........................................................................................................................9
Summary of Analysis:-.........................................................................................................................10
Weaknesses of the ratios:...................................................................................................................10
Conclusion and Recommendations:-...................................................................................................10
References:..........................................................................................................................................12
Appendix:............................................................................................................................................13
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Ratio Analysis of Reckitt Benckiser and Associated British Foods PLC
INTRODUCTION OF COMPANIES:
RECKITT BENCKISER:
Reckitt Benckiser is a British multinational company. It’s headquarter is in Slough, England.
Reckitt Benckiser manufactures the products related to health, hygiene and home. It operates
through two broader regions one is ENA and another one is DVM. ENA region includes
Europe including Russia/CIS and Israel, North America/New Zealand. DVM region includes
Africa, Middle east (Excluding Israel), Turkey, Asia (Excluding Russia/CIS) and Latin
America. ENA reported £5830m in 2015 while, DVM reported £2695m. Reckitt Benckiser
Group operates in more than 60 Countries. It sales it’s products in most countries across the
world. (Reckitt Benckiser, 2015)
Major products in all the categories i.e. Health, Hygeine, Home includes Strepsils, Durex,
Scholl, Gaviscon, Nurofen Express (in Health category). Dettol, Lysol, Harpic, Mortein,
Veet, Cillit Bang (in Hygeine Group). Vanish, Life Scents, Air wick, Woolite (in Home
category). It has total 19 Powerbrands creates 80% of company’s total revenue. Health and
Hygeine creates 74% of company’s total net revenue in which, health creates 33% of net
revenue while hygiene creates 41% of net revenue. (Reckitt Benckiser, 2015)
Associated British Foods, PLC:
Associated British Foods PLC is a multinational company. Company’s headquarters are in
London, United Kingdom. Company’s major operations are in 48 countries across America,
Australia, Asia, Southern Africa. Total 124000 employees are employed by this diversified
group. Company reported £12.8bn in 2015. (Associated British Food Plc., 2015)
Associated British Foods, PLC operates through different business segments basically
includes Grocery, Sugar, Agriculture, Ingredients, Retail . Major brands in which company
operates its business are KINGSMILL 50 50, Dorset Cereals, Twinings English Breakfast,
Jordans. Primark is one of the retailers in Europe that deals in Clothing business includes
clothes for Men, Women, Children. Primark entry in new country i.e. France has increased
it’s revenue significantly. (Associated British Food Plc., 2015)
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Ratio Analysis of Reckitt Benckiser and Associated British Foods PLC
Analysis of the profitability of the Reckitt Benckiser and Associated
British Foods PLC:-
The main purpose of any business is to earn profit. Profitability ratios helps us to measure the
efficiency of the business. Through profitability ratios one can analyse that whether the
company’s profits are increasing or decreasing. There is no ideal ratio from which we can
compare our ratios. Here, to analyse various aspects of the profitability of the companies, we
have choosen three different ratios i.e G.P. Ratio, N.P. Ratio, Operating Profit ratio.
Gross Profit Ratio:
Gross profit ratio is one of the profitability ratios used for measuring the efficiency of the
companies. The Gross profit ratio defines the amount left after deducting cost of Goods sold.
It is calculated by dividing amount left by Sales multiplied by 100 to denote in percentage
terms. (Investopedia, n.d.)
Here, we are going to analyse the profitability of two Groups, one is Reckitt Benckiser and
another one is Associated British Foods PLC. Both are in diversified businesses.
The Reckitt Benckiser has increasing trend during the initial three years, but during the year
2014 company reported sales of £8836 because company discontinued some of it’s operations
by which company’s G.P. ratio has decreased from 59.43% to 57.67%. In year 2015 company
performed well and again company’s G.P ratio has increased from 57.67% to 59.12%. This
shows company’s good performance although Company discontinued some of its non-
profitable operations. (Lan J, 2012)
The Associated British Foods PLC has both increasing and decreasing trend during the last
five years. Initially company performed well afterthat G.P. ratio is slightly decreasing.In 2015
company’s G.P ratio has decreased from 24.34% to 23.66%.
As we compare the G.P. ratios of these two companies, Reckitt Benckiser has increasing
trend although company discontinued some of its operations while G.P. ratio of Associated
British Foods PLC is also good but it slightly decreasing. Company should do some extra
efforts to maintain its profitability. From growth poin of view an investor should go for
Reckitt Benckiser although company Revenue has decreased from 2013 bco of shutting down
some non profitable business. (Lan J, 2012)
Net Profit Ratio:
Net profit ratio is also one of the profitability ratios used to measure the efficiency of the
company. Net profit ratio defines the amount left after allowing administrative expenses,
General expenses, selling expenses. It is calculated by dividing the amount left by sales
multiplied by 100 to denote in percentage terms. (Investopedia, n.d.)
Here, we are doing the analysis of two FMCG Companies one is Reckitt Benckiser and
another one is Associated British Foods PLC.
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Ratio Analysis of Reckitt Benckiser and Associated British Foods PLC
Reckitt Benckiser profit was in increasing trend during initial two years afterthat company’s
profit has decreased from 19.08% to 17.33% again in 2013 profit percentage increased from
17.33% to 36.49% specially due to profit includes £1560m from discontinued operations. If
we excludes this amount from 3224 the remaining amount will be 1664. If we convert this
amount in percentage terms it will be around 18.83%. So, we could say company’s efficiency
has increased over the years. (Reckitt Benckiser, 2015)
Associated British Foods PLC profit is in decreasing trend during the initial three years.In
year 2014 company’s profit significantly increased from previous year from 4.76% to 4.09%.
Again in year 2015 company’s profit significantly fall from 6.05% to 4.09%. Company’s
pofit fall because of Net profit amount includes Loss on sale and closure of business of
£(172) and exceptional item of £(98) if we excludes it from Net profit the percentage will be
6.20% . So, if we go in depth company’s performance is good. (Associated British Food
Plc., 2013)
Operating Profit Ratio:
The Operating profit ratio is also a major profitability ratio. One will have different
understanding of company’s performance if one go through operating profit ratio. It
represents the amount left after deducting only operating trade expenses. It gives the
understanding of company’s trade. Non trade expenses are not considered in calculating this
ratio. Non trade expenses include loss/profit on sale of business, fixed assets, investments,
Intt expenses, Income tax dividend and other expenses of similar nature. (Investopedia, n.d.)
Here, in Reckitt Benckiser case Operating profit ratio is showing increasing trend but in year
2013 it decreased from 25.53% to 23.35% . again in 2014 and 2015 it is showing increasing
trend that reflects good performance of the company.
Whereas Associated British Foods PLC Group, has both increasing and decreasing trend over
the five years.In 2012 it decreased from 7.61% to 7.13% but in 2013 it increased from 7.13%
to 8.21% again in 2014 it increased from 8.21% to 8.34% but in 2015 it slightly decreased
from 8.34% to 7.40%. It reflects company’s moderate position. (Lan J, 2012)
Analysis of Liquidity Position of the company:
The liquidity ratios are also known as short term solvency ratios. Liquidity ratios represents
the company’s ability to pay its liabilities due within year. Generally Trade payables and
short term lenders are very interested in knowing Liquidity position of the company. Mostly
two ratios are used to analyse the company’s liquidity position. One is Current ratio and other
is Quick ratio or we can say Acid Test ratio. (Investopedia, n.d.)
Current Ratio:
The current ratio which is also known as short term solvency ratio used to calculate the
company’s liquidity position. Current ratio is calculated by dividing the current assets by
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Ratio Analysis of Reckitt Benckiser and Associated British Foods PLC
current liabilities. It reflects the company’s financial strength. It shows the ability of the
company to pay its current liabilities within a year.
Here, Reckitt Benckiser current ratio is showing both increasing and decreasing trend. In
2012 current ratio decreased from .52 to .47 but in 2013 and 2014 it increased up to .60. In
2015 it again decreased from .60 to .57. It shows poor liquidity position of the company.
(Lan J, 2012)
Whereas, Associated British Foods PLC Current ratio is showing increasing trend over the
last five years which reflects the company’s good financial health from liquidity point of
view. Current ratio has increased from 1.24 to 1.40. (Investopedia, n.d.)
If we compare the ratios of these two companies Associated British Foods PLC has sound
liquidity in comparison of Reckitt Benckiser. The ideal ratio of 2:1 is considered better but
Reckitt has around .50 which could not be said good. It shows the lack of funds in company.
Acid Test Ratio:
The Acid Test Ratio is also used to calculate the liquidity position of the company. Acid test
ratio is also known as Quick ratio. The difference between current ratio and quick ratio is
only that whether the company is able to pay its current liabilities within a month or
immediately. In quick ratio Inventory, Prepaid expenses are excluded from Current assets
because stock have to be converted in to sales than cash will be realised from sales and
prepaid expenses are not expected to be converted in to cash. (Investopedia, n.d.)
In the Reckitt Benckiser group Quick ratio is showing increasing trend from 2013 but it
slightly increased during the last three years. We cannot say the ratio is good as it stands
around .44 in 2015. It means if company have to pay its liabilities within a month than it has
only .44 of current liabilities. (Lan J, 2012)
Whereas Associated British Foods PLC Acid test ratio is increasing during the last five years.
It has increased from .68 to .75 which shows good financial position when we compare to
Reckitt Benckiser.
If we compare these two ratios Associated British Foods PLC is in good liquidity position
compare to Reckittt Benckiser. Reckitt Benckiser shows lack of liquidity.
Analysis of Gearing & Capital Structure and Growth Ratios:-
Capital structure ratios provides us the understanding of the weights associated with the use
of funds by the company. In company’s balance sheet one can get the understanding of total
funds employed by the company. But by calculating capital structure and Gearing ratios one
will get better understanding of the weights of the funds.
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Ratio Analysis of Reckitt Benckiser and Associated British Foods PLC
Debt Ratio:
The Debt ratio is one of the capital gearing ratios. It is calculated by dividing Total Debt by
Total Assets. This ratio is used by the financial analyst to calculate the amount of Total
Assets financed by External Funds. Debt ratio should be lower. (Investopedia, n.d.)
In the Reckitt Benckiser Group, during the year 2011 Debt ratio was .18 but in 2012 it
slightly increased from .18 to .22 again in 2013, 2014, 2015 it slightly decreasing. Company
is maintain its debt equity ratio by paying its outside liabilities.
While in the Associated British Foods PLC group during the year 2011 debt ratio was .16 but
in 2012 it slightly increased from .16 to .19 times, afterthat debt ratio slightly decreased
from .19 to .14. In years 2014 and 2015 it remains stagnate i.e..09. (Lan J, 2012)
When we compare these two ratios, Associated British Foods PLC has good capital structure
in comparison to Reckitt Benckiser.
Debt Equity Ratio:-
Debt equity ratio can be defined as Capital Gearing ratio. Debt ratio is calculated by dividing
Total debt by equity. There is no ideal ratio by which we can compare our ratios. Only thing
is that External funds should be less in comparison to owner’s equity. Lowe ratio indicates
the good capital structure which tell us that company’s Assets are financed by mostly owner’s
equity. (Investopedia, n.d.)
Here, in Reckitt Benckiser Group debt equity ratio has slightly increased only in 2013 and in
remaining years it has decreased. From debt eqyuity point of view company’s capital
structure is good. (Lan J, 2012)
Whereas Associated British Foods PLC Group debt equity ratio has increased only in 2012
and in remaining years it remains stagnate. In last two years i.e. 2014 and 2015 it remains.14.
(Associated British Food Plc., 2013)
When we compare these two ratios Associated British Foods PLC has good capital structure
ratio in comparison to Reckitt Benckiser.
Interest Coverage Ratio:
This ratio is one of the Gearing ratios used by financial analyst. Interest coverage ratio is
calculated by dividing Earning before interest and tax by Interest expense. It tells us how
many times company can pay its interest expense. It is fixed cost in the name of Intt on long
term debt. Higher ratio is considered better as it shows company can pay its fixed cost
without interruption. (Investopedia, n.d.)
In the Reckitt Benckiser Grouo, the interest coverage ratio is decreasing during the initial
four years but in year 2015 it has increased from 33.71 to 41.89 times that shows good
position. Whereas Associated British Foods PLC Interest coverage ratio in in decreasing
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Ratio Analysis of Reckitt Benckiser and Associated British Foods PLC
trend during the initial three years but in 2014 it increased from 9.59 to 14.97 again in 2015 it
decline to 11.86 times. (Lan J, 2012)
When we compare the ratios of these two company’s, Reckitt Benckiser has good Interest
coverage ratio in comparison to Associated British Foods PLC.
Growth Ratio:-
Growth ratios are used by investors to take a decision about investment in a company. Here
to analyse the growth of two companies we have choosen two ratios i.e. Price earning ratio
and dividend yield ratio.
Price Earning Ratio:
Price earnings ratio is most widely used ratio. This ratio is basically used by investors to
know the growth potential of the company. Price earning ratio is calculated by dividing
market price share by Earnings per share. This ratio denotes how many times is the market
price of share in comparison to its earnings. (Investopedia, n.d.)
Here, Reckitt Benckiser Group Price earning ratio is increasing during the last five years. It
has increased from 14.10 to 27 times to its earnings that is reflecting the market growth of the
company. It represents the growth potential of the investment. (Lan J, 2012)
Whereas, Associated British Foods PLC Group Price earning ratio is also increasing during
the last five years. It has significanyly increased from 16.10 to 46.70 times to its earnings that
is also reflecting sound market growth of the company.
If we compare these two ratios, Associated British Foods PLC has good potential of growth
in compare to Reckitt Benckiser.
Dividend Yield ratio:
The dividend yield ratio is one of the growth ratio basically used by investors . Dividend is
the return on the investment made by the shareholders of the company. Dividend means the
amount distributed by the company out of its earnings after deducting Intt. Payment and
preference dividend. Dividend yield ratio is calculated by dividing dividend per share by
Market price per share multiplied by 100 to denote in percentage terms. (Investopedia, n.d.)
Here, Reckitt Benckiser Group Dividend yield ratio is stagnate despite both dividend and
Market price per share is increasing. It means both Dividend and MPS is increasing by same
percentage. Dividend yield ratio of the company is .02%. (Lan J, 2012)
Whereas, Associated British Foods PLC Dividend ratio is also stagnate during the last three
years i.e. .01 %. It shows that low amount of dividend is distributing by the company.
Generally company distributes small amount when there is a potential of growth in the
company.
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Ratio Analysis of Reckitt Benckiser and Associated British Foods PLC
When we compare these two ratios both companies are distributing small amount of
dividend. But Reckitt Benckiser is distributing higher amount of dividend in comparison to
Associated British Foods PLC.
.
Summary of Analysis:-
As we have already analysed the ratios of two UK FMCG Firms i.e. Reckitt Benckiser and
Associated British Foods PLC in detail. Afterv analysing the ratios of these two companies
one thing is clear that Reckitt Benckiser profitability is good in comparison to Associated
British Foods PLC. While ABF PLC has good capital structure, sufficient funds to meet out
its current liabilities,better Price earning ratio. (Singhal D K, 2015)
Weaknesses of the ratios:
Accounting ratios are important tool for the financial analysis of the company. But despite
this accounting ratios has number of limitations. One should keep in mind the limitations of
ratios whie analysing the financial position of the company. Weaknesses of the ratios
includes false accounting data, sometimes comparison is not possible due to different
accounting policies adopted by different firms. Limited use of single ratio, Window dressing,
lack of proper standards. (Accounting Management, n.d.)
Ratios alone are not sufficient to analyse the financial position of the company. Ratios give
the probability of favourable and unfavourable position. So Investor should go for other
financial tool to arrived at a decision. (E - finance Management, n.d.)
Conclusion and Recommendations:-
Both companies i.e. Reckitt Benckiser and Associated British Foods PLC are performing
good.But when we compare these two company’s ratios Associated British Foods PLC
Liquidity position and Capital Structure is good in compare to Reclitt Benckiser. The Price
earning ratio of this company is also good in comparison to Reckitt Benckiser. (Singhal D K,
2015)
However, Accounting ratios has number of limitations. Before investing in any company one
should go in detail by using other financial tools also. But here, I am considering the only
ratios on the basis of which, I would like to suggest to invest in Associated British Foods
PLC.
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Ratio Analysis of Reckitt Benckiser and Associated British Foods PLC
References:
 Reckitt Benckiser, 2015, Annual Report, [Online], Available at
http://www.rb.com/media/1598/rb-annual-report-2015_final.pdf [Accessed on
13/09/2016]
 Reckitt Benckiser, 2014, Annual Report, [Online], Available at
http://www.rb.com/media/992/rb-annual-report-2014.pdf [Accessed on 13/09/2016]
 Singhal D K , 2015, Financial Management, Available at Offline, [Accessed on
13/09/2016]
 Associated British Food Plc., 2015, Annual Report, [Online], Available at
http://www.abf.co.uk/documents/pdfs/2015/abf-annual-report%202015.pdf [Accessed
on 13/09/2016]
 Associated British Food Plc., 2013, Annual Report, [Online], Available at
http://www.abf.co.uk/documents/pdfs/2013/2013_abf_annual_report_and_accounts.p
df [Accessed on 13/09/2016]
 Lan J, 2012, 16 Financial Ratios for Analyzing a Company’s Strengths and
Weaknesses, [Online], Available at http://www.aaii.com/journal/article/16-financial-
ratios-for-analyzing-a-companys-strengths-and-weaknesses.touch [Accessed on
13/09/2016]
 Investopedia, n.d., Ratio Analysis: Using Financial Ratios, [Online], Available at
http://www.investopedia.com/university/ratio-analysis/using-ratios.asp [Accessed on
13/09/2016]
 Accounting Management, n.d., Limitation of Ratio Analysis, [Online], Available at
http://accountlearning.blogspot.in/2010/03/limitations-of-ratio-analysis.html
[Accessed on 13/09/2016]
 Investopedia, n.d., Uses and Limitations of Financial Ratios, [Online], Available at
http://www.investopedia.com/exam-guide/cfa-level-1/financial-ratios/uses-
limitations-ratios.asp [Accessed on 13/09/2016]
 E - finance Management, n.d., Disadvantages of Ratio Analysis, [Online], Available
at https://www.efinancemanagement.com/financial-analysis/disadvantages-of-ratio-
analysis [Accessed on 13/09/2016]
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Ratio Analysis of Reckitt Benckiser and Associated British Foods PLC
Appendix:
(AMOUNT IN Millions £)
PARTICULARS 2011 2012 2013 2014 2015
PROFITABILITY RATIOS
1 GROSS PROFIT RATIO
SALES TURNOVER 9485 9567 10043 8836 8874
GROSS PROFIT 5449 5538 5969 5096 5246
(GROSS PROFIT/SALES*100) 57.45 57.89 59.43 57.67 59.12
2 NET PROFIT RATIO
SALES TURNOVER 9485 9567 10043 8836 8874
NET PROFIT 1754 1825 1740 3224 1745
(NET PROFIT/SALES*100) 18.49 19.08 17.33 36.49 19.66
3 OPERATING PROFIT RATIO
SALES TURNOVER 9485 9567 10043 8836 8874
OPERATING PROFIT 2395 2442 2345 2164 2241
(OPERATING PROFIT/SALES*100) 25.25 25.53 23.35 24.49 25.25
LIQUIDITY RATIOS
4 CURRENT RATIO
CURRENT ASSETS 2938 3057 2901 3160 2882
CURRENT LIABILITIES 5700 6463 5661 5289 5039
CURRENT RATIO 0.52 0.47 0.51 0.60 0.57
Ratio Analysis of Reckitt Benckiser Group PLC (RB.L)
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Ratio Analysis of Reckitt Benckiser and Associated British Foods PLC
5 ACID TEST RATIO
QUICK ASSETS 2180 2322 2155 2415 2201
CURRENT LIABILITIES 5700 6463 5661 5289 5039
CURRENT RATIO 0.38 0.36 0.38 0.46 0.44
GEARING RATIO
TOTAL DEBT 2508 3274 2767 2572 2420
TOTAL ASSETS 14126 15066 15149 15496 15268
6 DEBT RATIO 0.18 0.22 0.18 0.17 0.16
EBIT 2418 2468 2370 2191 2262
INTEREST PAYABLE 42 60 56 65 54
7 INTEREST EARNED RATIO (EBIT/INTEREST) TIMES57.57 41.13 42.32 33.71 41.89
CAPITAL STRUCTURE RATIO
DEBT 2508 3274 2767 2572 2420
EQUITY 5781 5922 6336 6834 6906
8 DEBT EQUITY RATIO (DEBT/EQUITY) 0.43 0.55 0.44 0.38 0.35
GROWTH RATIO
9 PRICE EARNING RATIO
MARKET PRICE PER SHARE 33.84 39.66 49.85 88.06 65.88
EARNING PER SHARE 2.4 2.51 2.42 4.47 2.44
PRICE EARNING RATIO (MPS/EPS) 14.10 15.80 20.60 19.70 27.00
INVESTMENT RATIO
10 DIVIDEND YIELD RATIO
DIVIDEND PER SHARE 0.61 0.78 1.53 1.37 1.29
MARKET PRICE PER SHARE 33.84 39.66 49.85 88.06 65.88
DIVIDEND YIELD RATIO (DPS/MPS) 0.02 0.02 0.03 0.02 0.02
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Ratio Analysis of Reckitt Benckiser and Associated British Foods PLC
PROFITABILITY RATIOS
(AMOUNT IN Millions £)
PARTICULARS 2011 2012 2013 2014 2015
1 GROSS PROFIT RATIO
SALES TURNOVER 11065 12252 13315 12943 12800
GROSS PROFIT 2718 2960 3220 3150 3029
GROSS PROFIT RATIO (NET PROFIT/SALES*100) 24.56 24.16 24.18 24.34 23.66
2 NET PROFIT RATIO
SALES TURNOVER 11065 12252 13315 12943 12800
NET PROFIT 577 583 634 783 524
NET PROFIT RATIO (NET PROFIT/SALES*100) 5.21 4.76 4.76 6.05 4.09
3 OPERATING PROFIT RATIO
SALES TURNOVER 11065 12252 13315 12943 12800
OPERATING PROFIT 842 873 1093 1080 947
OPERATING PROFIT/ SALES*100 7.61 7.13 8.21 8.34 7.40
LIQUIDITY RATIOS
CURRENT RATIO
CURRENT ASSETS 3163 3269 3424 3626 3849
CURRENT LIABILITIES 2542 2588 2526 2684 2742
CURRENT RATIO 1.24 1.26 1.36 1.35 1.40
ACID TEST RATIO
QUICK ASSETS 1738 1769 1843 1995 2052
CURRENT LIABILITIES 2542 2588 2526 2684 2742
CURRENT RATIO 0.68 0.68 0.73 0.74 0.75
GEARING RATIO
TOTAL DEBT 1626 1921 1452 965 896
TOTAL ASSETS 10202 10240 10345 10472 10272
CAPITAL GEARING RATIO 0.16 0.19 0.14 0.09 0.09
EBIT 2484 875 978 1093 783
INTEREST PAYABLE 101 114 102 73 66
INTEREST EARNED RATIO (EBIT/INTEREST) TIMES 24.59 7.68 9.59 14.97 11.86
RATIO ANALYSIS OF ASSOCIATED BRITISH FOODS PLC
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Ratio Analysis of Reckitt Benckiser and Associated British Foods PLC
CAPITAL STRUCTURE RATIO
DEBT 1626 1921 1452 965 896
EQUITY 6175 6221 6497 6753 6551
DEBT EQUITY RATIO (DEBT/EQUITY) 0.26 0.31 0.22 0.14 0.14
GROWTH RATIO
PRICE EARNING RATIO
MARKET PRICE PER SHARE 11.11 15.54 24.53 31.72 31.29
EARNING PER SHARE 0.69 0.7 0.75 0.97 0.67
PRICE EARNING RATIO (MPS/EPS) 16.10 22.20 32.71 32.70 46.70
INVESTMENT RATIO
DIVIDEND YIELD RATIO
DIVIDEND PER SHARE 0.24 0.25 0.29 0.32 0.34
MARKET PRICE PER SHARE 11.11 15.54 24.53 31.72 31.29
DIVIDEND YIELD RATIO (DPS/MPS) 0.02 0.02 0.01 0.01 0.01
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