Chapter Two Introduction
Chapter Three: Company Rankings
Chapter Three presents a series of company rankings spanning the latest three fiscal years. Companies have been
ranked according to turnover, gross profit, operating profit, profit before interest & tax, pre tax profit, shareholder
funds, number of employees, gross profit margin, operating profit margin, profit before interest & tax margin,
net profit margin, return on total assets, return on equity, current ratio, quick ratio, debt ratio, credit given,
credit taken, times interest earned, fixed asset turnover, stock turnover, debtor turnover, sales per employee,
average wage, growth in turnover, growth in operating profit, growth in pre tax profit, growth in employees. To
facilitate easy comparison of company size and financial performance, rankings have been provided in columns
of descending order.
Chapter Four: Company Accounts
Chapter Four presents the company accounts for all of the firms listed in the report. For easier comparison
between firms, the layout and presentation of company accounts has been standardised. Accompanying each
set of accounts are two types of analysis. The first of which is a ratio analysis and the second is a graphical trend
analysis. Please keep in mind that ratio and trend analyses are meaningless unless some type of comparative
value is provided. It is for this reason that we have provided industry averages wherever possible. Our industry
averages provide the reader with a benchmark against which individual companies can be compared. When
reading company accounts, it is important to keep in mind that limited companies have ten months after their
yearend to file their accounts with Companies House and public limited companies have seven months after their
yearend.
Ratio Analysis
The ratio analysis is located at the bottom of the page for each company. The ratios are calculated using figures
taken from the balance sheet and the profit and loss statement. Using the ratios, it is possible to chart a firm's
financial history and evaluate it's current position. The ratios presented in our review can be divided into five
categories. Further explanation of these ratio categories can be found in Chapter Five
1) Profitability ratios illustrate the return generated on sales and investments. Return on total assets
(ROTA) for example is a key indication of management effectiveness.
2) Liquidity ratios measure a firm's ability to meet maturing short term obligations.
3) Gearing ratios measure the extent to which a firm has been financed by debt.
4) Activity ratios measure how effectively a firm is utilising its resources.
5) Growth ratios measure a firm's ability to maintain its financial position given the recent economic
climate.
Trend Analysis or Graph Analysis
The trend analysis can be seen in up to seven graph illustrations which accompany each set of company accounts.
Using the trend analysis, one can see company and industry changes over time. More specifically, it is possible to
see whether or not a firm's financial position is improving or deteriorating. The following graph illustrations listed
one through seven are provided for each company.
1) Credit Worthiness
2) Credit Control
3) Debt Ratio & Current Ratio
4) Annual Sales (% of 2006)
5) Turnover Analysis
6) Sales Per Employee
7) Profit Margins
Chapter Two Introduction | 13
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