考文垂大学 商科课程 财务报表分析 比率分析课堂问题答案.docVIP

M17EFA Ratio analysis Seminar questions (solutions) 1 Exercise 1 - L Limited See detailed PowerPoint Slides Exercise 2 - Robovert plc (CIPFA Financial Reporting December 2005 exam updated) (a) REPORT The performance of Robovert plc compared with three competitors From: To: Date: General The following report is based on a number of performance ratios calculated from the most recent financial statements of Robovert plc and three of its competitors which, for the purposes of this report, are named companies A, B and C respectively. These ratios are available as an appendix to this report. Profitability Return on capital employed is perhaps the best single overall measure of the efficiency of a profit making entity. Here this has been measured by comparing net profit to total assets employed (ratio 1). The higher this ratio is the better. However, the performance of Robovert plc is the lowest of the group, and significantly so when compared with companies B and C. The most profitable companies are achieving a return on capital employed which is three to three and a half times that of Robovert plc. This suggests that there may be opportunities for efficiency gains in Robovert plc. Robovert plc’s poor overall performance seems attributable to its comparatively low profitability on trading (ratio 2). Robovert plc is earning only ￡5 profit for every ￡100 of sales which is the lowest of the four companies. Robovert plc’s competitors are all earning significantly more than this and, again, companies B and C are by far the best performers here. In terms of assets utilisation Robovert plc occupies a middle position (ratio 3) – better than companies A and B, but not quite as productive as company C. This will be analysed in greater detail later. 2 Robovert plc’s poor profitability on trading seems mostly attributable to high overheads (ratios 5 and 6). Robovert plc’s administrative expenses and selling and distribution costs relative to sales