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Essay / Research Paper Abstract
This 8 page papers uses shows a student how to analysis a set of company accounts top look at issues such as profitability, working capital, liquidity, capital structure and stock market indicators. The writer demonstrated how to read the relevant figures and calculate the margins or the ratios required, as well as explaining what they mean. The bibliography cites 5 sources.
Page Count:
8 pages (~225 words per page)
File: TS14_TEashton.rtf
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Unformatted sample text from the term paper:
These will all be concerned with the performance of the company in relation to the way the share will perform, both for capital growth as well a potential dividends. The
profitability will be of interest, but so will the capital structure as this may indicate the level of debt and equity that will impact on future performance. The higher the
gearing (the borrowing level), the more risky the investment or entrepreneurial the management will be. We also need to consider the stock market indicators. In this report all figures
should be assumed to be ?million, unless otherwise stated. Profitability There are many ways in which profitability may be measured. The first profit figure on the balance
sheet is the gross profit. This is made up of the revenue less the cost of sales. Here we a gross profit of ?108.1 against an adjusted turnover of ?1,522.4.
This gives us a gross profit margin of 7.1%. If we compares this 2001 figure to the 200 figure, 2000 shows 13.82%. The next figure is the operating profit.
This is where there are other expenses, the operating expanses, such as the administration and the less direct expenses are also deducted. This figure is ?52.5, giving an operating profit
margin of 3.45% This is taken to two significant figures. If we look at the figure after the allowance of exceptional items (the one off, unusual events), is ?45.4 giving
a margin of 2.98%. The 2000 figure here is 8.26%. The next profit figure given is the trading profit. This is the same as the operating cost, but this
is not always that case. The operating profit is the profit from the main trading activities when all of the operating costs are deducted. The trading profit is the profit
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