Rolls-Royce Analysis - Assignment Example

2010 Annual Report of Rolls-Royce Analysis Customer Inserts His/Her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name 20, 11, 2011 Question 1 Q1 Horizontal and vertical analysis Horizontal analysis compares the performance of Rolls Royce over the two year period and 2009 is selected as the base year. Vertical analysis on the other hand reports each balance sheet and income statement item as a percentage of one selected item mainly total assets and sales for balance sheet and income statement respectively. Income statement- Horizontal analysis Rolls Royce Income Statement- Horizontal Analysis For the year ended December 31st 2010 2010 2009 Amount Percentage increase/(Decrease) £M £M £M % Revenue 11,085 10,414 671 6 Cost of sales (8,885) (8,303) (582) 7 Gross profit 2,200 2,111 89 4 Other operating income 95 89 6 7 Commercial and administrative costs (836) (740) (96) 13 Research and development costs (422) (379) (43) 11 Share of results of joint ventures and associates 93 93 - 0 Operating profit 1,130 1,174 (44) -4 Profit/(loss) on disposal of businesses 4 (2) 2 -100 Profit before financing and taxation 1,134 1,172 (38) -3 Financing income 453 2,276 (1,823) -80 Financing costs (885) (491) (394) 80 Net financing (432) 1,785 (2,217) -124 Profit before taxation 702 2,957 (2,255) -76 Taxation (159) (740) 581 -79 Profit for the year 543 2,217 (1,674) -76 Attributable to: - Ordinary shareholders 539 2,221 (1,682) -76 Non-controlling interests 4 (4) 8 -200 Profit for the year 543 2,217 (1,674) -76 Read More