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Ted Baker Plc Ratio Analysis - Essay Example

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Summary
This report exhibits the use of a wide range of financial ratios to provide an analysis of the Ted baker Plc's investment potential for all the long and short-term investors of the company based on the financial results obtained from the company's annual report for the year ended 2005…
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Ted Baker Plc Ratio Analysis
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Download file to see previous pages The P/E ratio for Ted baker Plc shows that the company has 1 worth of annual- per share earnings for every 17.4 in the share price. The company's P/E ratio is lower than that of the companies in the same sector.
This ratio reveals the percentage of dividends paid to shareholders in dividends. Ted baker Plc's dividend payout is 39.92% of the earnings per share and the retail apparel industry's average for dividend payout is 20.93%, therefore the company has more potential for investment in terms of dividend paid by the company.
The gross margin assesses the company's profit after accounting for production and distribution costs. The company's gross margin is 59% of the total turnover, which is lesser than the industrial average for this ratio. This shows that the company is incurring less cost of sales than the other companies in the industry, which is influencing its gross margin of profit.
The operating margin is assesses the profitability of a company after accounting for all the operating costs. The operating margin for the retail apparel sector is showing as negative, whereas the operating margin for Ted baker Plc is 16.5% of the total turnover. It is much attractive for an investor to invest in a company with high profit margins.
The Earning Per Share analysis is important for the investors who are interested in the market of price of company's shares. The EPS of Ted baker Plc is higher than the sector average, therefore has potential for investment than the other companies in the industry.
EPS Growth
Sector
Ted baker Plc
97.11
20.7
The Earning Per Share of Ted baker Plc is growing at a slower rate than that of the industry. This shows that although the company has offered more EPS than the other companies in the same sector for the year 2005, but it has a much slower growth rate of EPS than its competitors in the industry.
Dividend per share
Sector
Ted baker Plc
0.03
0.108
The dividend per share paid by the company is more than that of the other companies in the sector. Therefore, Ted baker Plc offers investment potential for the investors that invest in the company to gain return out of dividends paid by company.
Dividend estimate Yield
Sector
Ted baker Plc
2.41
2.49
The dividend yield ratio is calculated by comparing the latest dividend paid by the company with the current market price of the company's shares. The dividend yield of Ted baker Plc is almost the same as paid by the other companies in the industry.
Interest expense coverage
Sector
Ted baker Plc
108.66
76.71
This ratio reveals the ability of a company to cover its interest expense after accounting for all the operating costs incurred by the company. Ted baker Plc's interest cover ratio is lesser than the sector average. In the year 2005, the company generated returns of about 76.71% of the total interest expense, not enough to cover the interest even a single time.
CONCLUSION
After the above analysis, it is clear that Ted baker Plc off ...Download file to see next pagesRead More
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