This 16 page paper looks at a case study provided by the student and undertakes a financial analysis of the company showing all calculations. The second part considers how finance may be raised. The bibliography cites 2 sources.
Name of Research Paper File: TS14_TEcase02.rtf
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figure. By examining the figures each year and then looking at them in conjunction with industry averages and also the tend over the three years given patterns can be seen.
Part 1; Financial Analysis Here we can start with the gross profit margin. This is the margin at the deduction of the cost of goods sold only as a
percentage of the sales. It is interesting to note that this remains the same in all three years, this is 20%. It may indicate that it is the gross profit
margin that is the main budget driver. The calculation for this is show below. 2000 2001 2002 Total Turnover (a) 2210000 2295000 2380000 Gross profit (b) 442000
459000 476000 Gross profit margin ((b/a)x 100) 20.00 20.00 20.00 This indicate that the change of profit is not due to the cost of materials for the goods sold,
as in 200 - 2002 this appears to remain stable at the 20% mark. In comparing this to the industry they are slightly below as the gross profit margin for
the case is given as 21%. The next figure to consider is that of the net profit. The traditional profit margin is the net profit margin that also has
all other expense deducted from the operating profit, this may or may not include interest payments as well as extraordinary items ether being added onto or taken off of the
balance. However, it will not include taxation. This is also known as the net profit margin. This is calculated as a percentage of the revenue.
It is a worth noting that for most ratios it will be the profit before both tax and interest that is used, as this is a more
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