Financial Report

Topics: Ratio, Financial ratio, Stock Pages: 9 (2443 words) Published: February 21, 2013
Table of contents
1. Introduction3
2. Strategy and forward planning3
3. Accounting methods4
4. Interpretation of technical analysis4
4.1. Earnings per share4
4.2. Price-earnings ratio5
4.3. Dividend per share5
4.4. Return on shareholders’ equity5
4.5. Current ratio6
4.6. Conclusion6
5. Non-financial performance indicators6
6. Questions to Finance Director7
Appendix I8
Appendix II9

1. Introduction

This report will provide a financial analysis of the company Johnson Matthey. Johnson Matthey is a globally operating speciality chemicals company with its headquarter in London. Furthermore it is a public listed company (PLC), which is listed on the London Stock Exchange in the FTSE 100. The company employs currently 9624 people. Johnson Matthey is divided in three different global units, which are environmental technologies, precious metal products and fine chemicals. The environmental technologies unit supplies catalysts and technologies to conduce the control of pollution, greener power but also to use the resources of hydrocarbon more efficiently. The precious metal product division mainly focuses on the manufacturing and refining of noble metals. The fine chemicals division supplies customers from the pharmaceutical and chemical industry with fine chemicals, speciality chemicals and pharmaceutical ingredients. Furthermore during the past five years Johnson Matthey could raise its profit before tax from 262.3 million £ in 2008 to 409.3 million £ in 2012. Johnson Matthey was also capable to increase its revenue from 7,498.7 million £ in 2008 to 12,023.2 million £. 2. Strategy and forward planning

The outlook of Johnson Matthey remains strong in the future. Actually Johnson Matthey focuses on five major themes, which are differentiation through technology, strong position in platinum group metals, organic growth, leading edge catalysis and new business development. Five additional aspects support the strategic intent. Those are global drivers, sustainability, research and development, manufacturing excellence and the employees of Johnson Matthey. With those major themes and investments Johnson Matthey tries to underpin the future growth of the company. Sustainability 2017 for example is a programme that was launched in December 2007 to focus on developing more sustainable products and improving resource efficiency in manufacturing operation. Furthermore the global crisis impacted upon the company because of a substantial fall in precious metal prices over the last few months but the demand remains stable regardless. Nonetheless Johnson Matthey is confident that the strong position in growing markets will foster the progress in environmental technologies and fine chemicals in the future. However, if precious metal prices remain at the current level, the strong position of the other two units will be offset by a weaker performance of the precious metal division. Furthermore Johnson Matthey plans to continue expanding its manufacturing capacities around the world and fostering its investments in research and development. Those two aspects should enable Johnson Matthey to provide products to address the increasing trend of environmental sustainability around the world. Regarding the strong positions in growth markets Johnson Matthey is confident to grow over the next few years despite the impacts of the global crisis. 3. Accounting methods

Johnson Matthey prepares its accounts in accordance with the International Financial Reporting Standards. As adopted by the European Union the interpretations are issued by the International Financial Reporting Interpretations Committee or the Standing Interpretations Committee. Furthermore the accounts are prepared on the historical cost basis, excepting certain assets and liabilities, which are measured at fair value. The accounting methods are in accordance with the requirements of the Companies Act 2006.

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