Rolls Royce PLC Business Analysis - Coursework Example

1 1.2 and Year Signature: Number 3 Module 4 Module Number 5 Module The Professional Engineer XFX1074 T. J. Amsdon 1.6 1.7 1.8 1.9 Assignment Title 1.10 Ass. Weighting 1.11 Date Stamp: Assignment 2: Management and Finance 20% 1.12 Hand-In Date 1.13 Date Submitted 1.14 Word Count 28/05/2014 Contents 1.1Student Name: 1 1.2Course and Year 1 1.3Module Title 1 1.4Module Number 1 1.5Module Tutor 1 1.9Assignment Title 1 1.10Ass. Weighting 1 1.11Date Stamp: 1 1.12Hand-In Date 1 1.13Date Submitted 1 1.14Word Count 1 Acknowledgements and declaration 3 Summary 4 Acknowledgements and declaration This report acknowledges the support offered by the unit lecturer and respondents requested of their opinions. Summary This assignment is an explanation of a case study, its objective, research techniques, analysis and conclusion under Rolls-Royce PLC. Methods of research are put to evaluation towards a rich discussion and conclusion. Planning and scheduling procedures have been tabulated to prepare an easier flow to achieve the objectives of the case study. The report becomes a learning source for future business management students as an addition to the educating mill. The critical review section checks on the ability to utilize learnt skills in project research and analysis before reporting. The case under study is the Rolls Royce Company; demand has been on the rise for best quality engines allowing the company to thrive well among a fleet of competitors. The report will attempt to make savvy on the matters of investment, returns and drawbacks. This project finds a way to be implemented in the company itself where applicable and check for areas that would call for more research to iron the missing data or to search for solutions to issues that might have not been identified before the project documentation. Introduction and Background Rolls Royce has been consistent in its strategy established for over 15 years which has ensured a place for the company in the market share making it a player in four subsections of business focus. They deal with civil aerospace, marine, defence aerospace, and energy. The company’s organic growth for the past over 2 years is devolved to key partnerships in the industry sectors including Marintek, and Norwegian University of Science and Technology. The partnerships are vital in stimulating research and maintaining firm focus in its applications to develop technological leads and maintenance of the technological advancements within the company. This futuristic thinking establishes a future for Rolls Royce. The aviation industry would be miles behind the current technology were it not for the input granted by Rolls Royce. The management have devised continuity plans for this company. Statistically, it is claimed that it would be safer to fly in a Rolls Royce powered engine than driving by car. The company under case study, Rolls Royce, has a right to brag of development of the best and most efficient solutions and availing them in the most convenient way. The customer base in defence is taken up by over 160 defence clients around the globe, more than 2000 marine technology clients and being leading supplier in compression and power equipment to more than 120 clients globally. They possess the state of the art manufacturing facilities that enhance diversification in the industry. The company has maintained the best customers to further strengthen success. Any successful company is conversant with turnovers and their market research. Rolls Royce will be a strong case study to evaluate the catalyst to their market share. Management skills will be strengthened by applying them in the real life in line with the scholarly advancements and requirements for business management students. Aims and Objectives Planning and Scheduling and Management of the Project The aim and objective of this report will be to emphasize the research methodology used, establish a consistent strategy to be applied for years to come and observe the delivery of a broader, balanced and better portfolio yet more resilient a package. The objective is to observe the three basic financial statements created for internal and external reporting to investors and stakeholders; statement of financial reporting or balance sheet, income statement or profit/loss accounting and cash flow statements which are part and parcel of any organization. The aim is to understand these documents and their role in financial accounting’s measurement and non financial performance evaluation. The plan and schedule below aims to actualize the objectives, techniques and methods or research to assist in the future’s performance evaluation, long term, to attain a competitive edge rather than short-term profitability. To investigate whether financial accounting really plays a role in measurement of financial performance which should be mandatory, essential and regular for Rolls Royce reporting. Planning Description Expected duration Actual Study of the areas of expertise of the chosen case study PLC 4hrs 3hrs Services offered by the diversified subsets of the PLC 2hr 2hrs Market share analysis 5hrs 3hrs Organizational culture and company reputation retention 1hr 1hr Company approach, competitive 1hr 1hr Working and management structure 3hrs 2hrs Scheduling Description Week number Deadline Actual time Company background research 1 1 6 days Project layout planning 2 2 12days Project documentation 3 4 week 23days Timing of investigation and report writing are critical in the success of any project. The investigation was taken online from the internet from websites rich in Rolls Royce information. Report writing was conducted after the successful research. However for reference purpose during its documentation, points noted were written down in short form forming an accurate source of data before drawing conclusions. Below is the company’s management structure; source link The organizational structure is broken down it business sub-categories headed by a leader who is under supervision of a superior director. The platform embraces both the horizontal and traditional tree structure of administration. This ensures quick communication across the departments and instant decision making at any level of management. Rolls Royce has 51 subsidiaries managed by 51 executives under one C.E.O. The C.E.O has directors working on a similar platform as his and so does the board chairman. All these are entitled to oversee the developments in the company under set objectives. Services offered by this company are further divided under the leadership of presidents depending on the location or task, say, legal affairs, operations, energy marine and nuclear and so on. The executive director oversees the operations under each president. Critical Literature Review Rolls Royce is termed as a group holding company. It provides the solution to client’s energy and marine markets, civil aerospace services, and defence. It provides services in integrated power systems in its four segments. The widely used research methods include literature reviews, focus groups, interviews, telephone, mail, email and internet surveys. A project survey involves reviewing the readily available information, which may include relevant trade publications, internal information from the company, magazines, newspapers, annual reports online databases and company literature. It is an inexpensive way to acquiring timely information. As the case used in this project, web searches are the most efficient and fastest compare to library searches that could take years. Interacting with others to seek opinions during the teething stages of project preparation from experts in this field is a rich way of gathering information that may not be available to the general public. However, its validity may be questioned due to the high subjection and improbable representation of the actual population. Focus groups work best to evaluate attitudes in testing new techniques. They are cost effective compared to personal interviews and may take a few weeks. Internet and email surveys have little information known on them and are relatively new from the fear of biasness from online surveys. To achieve a cheap and quick distribution of a survey or attain quick response, they serve best. The internet has been known not to represent the demographic profile although this is evolving after the formation of a wider global-online community. This project would require more research conducted to confirm the information collected from the fact of the potential weakness of the method used, internet searches and surveys although various sources were compared to attain a more central agreeable data. Case Study The company’s performance has been deemed fine apart from 2008 where shareholders had to invest heavily in the R&D Company which has kept the company up and positive results realized the following year. ROA has been influential from observations on performance from assets. Rolls Royce has short-term solvency where the current assets can fund the current liabilities. More evidence of credit given to the clients is evident from the firm’s ART that after review in 2008 has ensured business growth as the ITR has also been depicted to be lowering across the years. Competition plays a major role in slowing down in the sales processes. The debit equity ratio position at Rolls Royce has been improving over the years with an aggressive growth to the financing assisting the company in its long-term growth. The favourable position in solvency ratio assures share holders of returns for their investment. Consistency in the company’s ROE has been seen for several years apart from the year 2009 as a result of the huge volume of retained shareholders’ earnings that lead to an aftermath of slowdowns in the economy. Decreasing sales implies reduced ROA also resulting from global financial crisis. The division affected by the crisis were saved by those located in other locations on their business globe. Cash Flow of the Company Profit & Loss Year Ended 31 December 2013 2012 2011 2010 2009 £ millions Turnover 15513 12161 11124 11085 10414 Operating Profit 1375 1205 1070 1037 1081 Net Interest -111 689 -84 -432 1785 Profit Before Tax 1759 2766 1105 702 2957 Profit After Tax 1379 2335 848 543 2217 Total Dividend n/a n/a n/a n/a n/a Retained Profit / Loss n/a n/a n/a n/a n/a Since 2009 to the close of 2013 financial year, the turnover has grown to £15513 millions up from 10414 and so has the operational profit ratio at a correlated ratio profit after tax declined in 2013 compare to be previous year most likely as a result of the financial crisis, competition or other related factors. However, the company trends seem to be taking a positive trend in benefits which would imply a better sale in shares and return on investment. Balance Sheet Year Ended 31 December 2013 2012 2011 2010 2009 £ millions Intangible Assets 4987 2901 2882 2884 2472 Tangible Assets 3392 2564 2338 2136 2009 Fixed Investments 628 1806 1690 404 495 Total Fixed Assets 10245 8553 8108 6410 6048 Stocks 3319 2726 2561 2429 2432 Debtors n/a n/a n/a n/a n/a Cash at Bank and in Hand 3990 2585 1310 2859 2962 Total Assets 23063 18146 16423 16234 15422 Creditors Amount Within 1 year 16618 13460 13132 12371 11814 Creditors Amount After 1 year 3549 2883 3133 3236 2075 Total Liabilities 16760 12150 11904 12255 11640 Net Assets 6303 5996 4519 3979 3782 Net Current Assets n/a n/a n/a n/a n/a Called Up Share Capital 376 374 374 374 371 Share Premium Account 80 n/a n/a 133 98 Other Reserves 345 420 554 699 678 Profit and Loss Account 4804 5185 3590 2769 2635 Shareholders’ Funds 5605 5979 4518 3975 3782 Minority Interests 698 17 1 4 n/a Direct presentation of the cash flow was used during the project before drawing conclusions for this organization. Based on investing the company is expanding from the observation of their quick solvency capability while finance basis are altering the company’s size and composition allowing them to merge and diversify into more products. The total fixed assets a had risen to 10245 in 2013 up from 6048 in 2009 while the total assets were at 23063 in 2013, an upward trend from 2009’s 15422, all units in £ millions. Discussion and Conclusion To keep up with the business sphere’s consistent changes, Rolls Royce changes the approach or orientation from core engineering to a client-based company to achieve a more proactive strategy aimed at customer awareness and services focus. Analysis in the case study section trains potential business starters to consider mergers for their business strengthening and investment on quick returning assets for survival in business. Strategies are required to be devised by the scholarly group to counter global financial crisis, probably work on saving up on funds that could be accesses easily to control wider repercussions. Managing this business would call for overall renovation of infrastructure of start-up operate-facilities. The working structure ought to the aligned in definition of productive relation among the well developed systems and business in meeting the defined objectives. The company has achieved a major milestone by strengthening the sense of ownership of the company in its employees. This is shown from their contribution in the organisation and decision making towards development of a business strategy. It restructured its approach from core engineering to a client service culture that requires more involvement and interaction towards the clients with improved empowerment and prompt decision making. Rolls Royce has been working with the assistance of its financial books to regained probable lost reputation as it aims to achieve continuous success. This project has unveiled a new phase in the urge to learn more of business management, not necessarily this case but more complex matters. It has achieved the skills in critical analysis and project planning, scheduling and management. This project hinted out the areas to observe to evaluate maximum productivity from any firm under a case study checking for business flaws, strengths or undiscovered potential. The project assisted in implementing work learnt in class in a deeper and more challenging environment. References 2013 Rolls-Royce Ghost Prices - AOL Autos. (n.d.). . Retrieved May 27, 2014, from http://autos.aol.com/cars-Rolls_Royce-Ghost-2013/pricing/ Rolls Royce Images Rolls Royce Pictures & Graphics - Page. (n.d.). . Retrieved May 27, 2014, from http://www.hitupmyspots.com/s/index.php?q=Rolls%20%20Royce Rolls Royce Phantom Drophead on Vellano Wheels - Rides Magazine. (n.d.). . Retrieved May 27, 2014, from http://www.rides-mag.com/car-photos/2014/03/rolls-royce-phantom-drophead-vellano-wheels/ rolls royce kit | eBay - Electronics, Cars, Fashion .... (n.d.). . Retrieved May 27, 2014, from http://www.ebay.com/sch/i.html?_nkw=rolls+royce+kit 1941 Rolls-Royce Phantom III - John Bowyers Home Page. (n.d.). . Retrieved May 27, 2014, from http://john.bowyer.com/3DH11.html Gas turbine engines - Rolls-Royce. (n.d.). . Retrieved May 27, 2014, from http://www.rolls-royce.com/energy/energy_products/gas_turbines/ Rolls - Royce 0-60 Times & Rolls - Royce Quarter Mile Times .... (n.d.). . Retrieved May 27, 2014, from http://www.zeroto60times.com/Rolls-Royce-0-60-mph-Times.html Rolls-Royce. (n.d.). Rolls-Royce. Retrieved May 27, 2014, from http://www.rolls-royce.com/ Org Chart Rolls-Royce Group. (n.d.). TheOfficialBoard. Retrieved May 27, 2014, from http://www.theofficialboard.com/org-chart/rolls-royce-group edmayne Bentley Stockbrokers. (n.d.). Rolls-Royce Holdings Financials: Profit & Loss, Balance Sheet, Key Facts & Figures. Retrieved May 27, 2014, from http://www.redmayne.co.uk/research/securitydetails/financials.htm?tkr=RR. Read More