Ratio Analysis
|Accounting for limited company |[pic] |
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To: Syed Naqavi
From: Thu Chu
Date: 2nd December 2011
Title: A year-on-year comparison between Kingfisher PLC year end 31 January 2011 and Home retail group PLC year end 28th February 2011.
Contents
Introduction 3
Kingfisher PLC 3
Home Retail Group 3
Analysis 4
Profitability Ratios 4
Liquidity Ratios 5
Gearing Ratios 5
Investment Ratios 6
Performance Factors 6
Kingfisher PLC 7
Home Retail Group 7
Appendix 8
Profitability Ratios 8
Liquidity Ratios 9
Gearing Ratios 9
Investment Ratios 10
Bibliography 11
Introduction
The aims and objectives of this report are to compare the two companies, Kingfisher Plc. and Home Retail Group Plc., using their annual report published for the year 2011. With the help of the financial statements, it will be possible to calculate different ratios that are relevant to the comparison between the two businesses. Through this comments can then be made on the performance of both companies for the year, stating some of the possible factors that could have made affected this. Comparison will be on a year-to-year basis and then between the two companies as a whole.
When comparing two companies like Kingfisher and the Home Retail Group, there are a few limitations needed to be considered before this is possible. The first would be the different accounting policies that each corporation have chosen to adapt to their financial statements; this could be in regards of the depreciation or inventory valuation method used for the preparation of relevant statements.
Another important point to note is that financial statements are based on historical information and therefore this would not be as objective to when we
| | |
To: Syed Naqavi
From: Thu Chu
Date: 2nd December 2011
Title: A year-on-year comparison between Kingfisher PLC year end 31 January 2011 and Home retail group PLC year end 28th February 2011.
Contents
Introduction 3
Kingfisher PLC 3
Home Retail Group 3
Analysis 4
Profitability Ratios 4
Liquidity Ratios 5
Gearing Ratios 5
Investment Ratios 6
Performance Factors 6
Kingfisher PLC 7
Home Retail Group 7
Appendix 8
Profitability Ratios 8
Liquidity Ratios 9
Gearing Ratios 9
Investment Ratios 10
Bibliography 11
Introduction
The aims and objectives of this report are to compare the two companies, Kingfisher Plc. and Home Retail Group Plc., using their annual report published for the year 2011. With the help of the financial statements, it will be possible to calculate different ratios that are relevant to the comparison between the two businesses. Through this comments can then be made on the performance of both companies for the year, stating some of the possible factors that could have made affected this. Comparison will be on a year-to-year basis and then between the two companies as a whole.
When comparing two companies like Kingfisher and the Home Retail Group, there are a few limitations needed to be considered before this is possible. The first would be the different accounting policies that each corporation have chosen to adapt to their financial statements; this could be in regards of the depreciation or inventory valuation method used for the preparation of relevant statements.
Another important point to note is that financial statements are based on historical information and therefore this would not be as objective to when we
Bibliography: Alan Melville (2011), International Financial Reporting: A Practical Guide 3rd Edition. Prentice Hall: Financial Times page 366, 375, Mintel: http://academic.mintel.com/sinatra/oxygen_academic/my_reports/ Key Note: https://www.keynote.co.uk/academics/index Kingfisher: http://www.kingfisher.com/ Home Retail Group: http://www.homeretailgroup.com/ ----------------------- Financial Comparison Report