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Financial Report Analysis of Goodrington Plc - Essay Example

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Summary
This paper provides an insight into the financial position and performance of Goodrington plc. It analyses the company's annual financial statements with the help of a wide range of ratios concerning the profitability, liquidity, working capital utilisation, gearing, investment and cash flow aspects of the company's operation and performance.
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Financial Report Analysis of Goodrington Plc
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Company Background
Goodrington group plc belong to fashion retailing industry in the United Kingdom. It comprises three popular brands of retailing in the country that are Goodrington, Newton, and Churston. These three bands provide several retail products to different target groups of the consumers in United Kingdom.
Activities
Goodrington caters to customers ranging from the young-to-middle aged consumers by providing different items such fashion clothing, footwear and home ware.
Newton has its own target market catering to the female consumers aged 45 and over by selling clothing items to them.
Churston caters to the consumers with an instinct for fine fragrances and perfumes. It attracts its target consumers with the help of brightly lit and decorated store interior that is highly appealing to the people with artistic sense.
Significant Changes
The most significant change concerning the company's operations as reflected in the company's annual report is the acquisition of subsidiary costing the company 4,350,000 in the year 2005.
ANALYSIS
Profitability
2005
2004
Gross Profit Ratio
20.25%
20.56%
Net Profit Ratio
5.99%
6.61%
Gross Profit Ratio
The Gross Profit ratio analyses the company's profit margin before accounting for various operating costs (Mcmenamin Jim, 1999). The gross profit ratio for Goodrington plc shows that the company is earning about 20% out of the total sales revenue after having accounted for the cost of sales. This also shows that the company loses almost 80% of the total sales revenue on production and distribution expenses. The company's gross profit ratio has been stable over the last two years.
Net Profit Ratio
The net profit ratio analyses a...
This paper utilises only books for the purpose of formulas and interpretation of the given ratios.
Goodrington group plc belong to fashion retailing industry in the United Kingdom. It comprises three popular brands of retailing in the country that are Goodrington, Newton, and Churston. These three bands provide several retail products to different target groups of the consumers in United Kingdom.
Churston caters to the consumers with an instinct for fine fragrances and perfumes. It attracts its target consumers with the help of brightly lit and decorated store interior that is highly appealing to the people with artistic sense.
The Gross Profit ratio analyses the company's profit margin before accounting for various operating costs (Mcmenamin Jim, 1999). The gross profit ratio for Goodrington plc shows that the company is earning about 20% out of the total sales revenue after having accounted for the cost of sales. This also shows that the company loses almost 80% of the total sales revenue on production and distribution expenses. The company's gross profit ratio has been stable over the last two years.
The net profit ratio analyses a company's profitability after taking into account all the operating costs and interest expense etc (Mcmenamin Jim, 1999) ...Download file to see next pagesRead More
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