Ratio Analysis of Domino's Pizza

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| 2009 – 2010|
| Masters in Business Administration
|By- Tesar Singh Chauhan

[DOMINO’s PIZZA UK & IRL FINANCIAL PERFORMANCE ANALYSIS]| Submitted as a part of module assessment for Accounting and Control |

CONTENTS:Page Number
1. INTRODUCTION2
1.1 DOMINO’s at LONDON STOCK EXCHANGE
And Trading Information2

2. FINANCIAL RATIO ANALYSIS ON DOMINO’s
PIZZA UK & IRL PLC’s PERFORMANCE3

3.1 PROFITABILITY RATIOS3-4
3.2 LIQUIDITY RATIOS5-6
3.3 EFFICIENCY RATIOS7-8
3.4 GEARING RATIOS9-10
3.5 EMPLOYEE RATIOS11
3.6 INVESTORS RATIOS12-14

3. CONCLUSION15

4. BIBLIOGRAPHY

APPENDIX A – Balance sheet main changes
APPENDIX B – Income statement main changes
APPENDIX C – Company Profile for DOMINO'S
PIZZA UK & IRL PLC ORD 1.5625P by
“London Stock Exchange”

1. INTRODUCTION
This report is a critical evaluation of the financial performance of Domino’s Pizza UK and Ireland plc group. It includes an evaluation and interpretation of financial ratios which according to Horngren et. al.(2002), requires 3 types of comparisons, time-series, with benchmarks and cross sectional comparisons. So this report does the above mentioned comparisons with the data (Pre-exceptional) collected over two years 2009-2010 (Referred to as FY2009 and FY2010 in the report) and with close competitors (Pizza Hut, Perfect Pizza, Papa Jones etc.) Domino's Pizza UK & IRL PLC (DOM) is a United Kingdom-based master franchisee of international fast food pizza delivery chain Domino's Pizza. The first British branch was opened in Luton in 1985. And now, Domino’s boasts more than 726 stores in a growing number of towns and cities throughout England, Scotland, Wales, Germany and Ireland. (www.Dominos.uk.com/aboutus.aspx) For 25 years Domino’s pizza has been opening doors to new customers, new stores, new locations, new ideas, and new business opportunities. Their aim “to be familiar and welcome sight for every doorstep and every height street” has strengthen domino’s pizza brand which lead to a sturdy performances across UK and IRL and resulted in 19.3% increase in system sales to £485.3 million. Their operating margin increased by 20.2%.They improved their profit before tax by 27.1% to £38 million. (Annual report) 1.1 DOMINO’s at LONDON STOCK EXCHANGE

The plc has its shares listed in London stock exchange under the abbreviation DOM. It has a market cap of £694.30 million. Domino’s was listed/admitted to trading on 19-May-2008.It uses the SETS trading system. DOM is FTSE Indexed in FTSE All-Share, FTSE All-Share (ex IT), FTSE 350 LowYield, FTSE 250, FTSE 350, FTSE 350 (ex IT), and FTSE MID 250(ex IT). Its FTSE Sector is Travel & Leisure and the sub-sector is Restaurants & Bars. Its Segment is STMM. Its MiFID status is Regulated Market. Exchange market size is 5,000. Its Stock Exchange Daily Official List (SEDOL) number is B1S49Q9. International Securities Identification Number (ISIN) for DOM is GB00B1S49Q91 (www.londonstockexchange.com)

2. Financial Performance
A typical set of financial statements contains many figures, and it is possible to calculate almost infinite permutations expressing their relative dimensions. Some, however, are very obviously of more use than others; it is important that the figures being compared do have some genuine causal relationship between them. In the rest of the report we will examine some of the more commonly considered relationships between items in the financial statements. (Gowthorpe, 2011 p200) 2.1 Profitability Ratios

A class of financial metrics that are used to assess a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time. For most of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a previous period is indicative that the...
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