Analysis and Interpretation of Company’s Financial Statements
Autor: Mikki • January 31, 2018 • 4,791 Words (20 Pages) • 953 Views
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Comment [RP2]: This is important, so merits a bit more discussion as to the implications of this ownership structure.
Comment [RP3]: Good detail from the annul report, but unreferenced.
[pic 10]
3.0) Horizontal and Vertical Analysis of Debenhams plc.
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[pic 11]
Table1: Income statement for final year ended 1 September 2012 and 3 September 2011, Debenhams plc.[pic 12][pic 13]
Comment [RP4]: A rather large table for the body of the report and untidy formatting. Perhaps consider two smaller tables or moving it to an appendix.
Debenhams plc
52 weeks ended 1st Septembe r 2012
52 weeks ended 3rd September 2011
‘Horizontal’ analysis
‘Vertical’ analysis
2012
2011
￡m
￡m
% change
%
%
Revenue
2,229.8
2,209.8
+ 1
100
100
Less Cost of Sales
(1,927.5)
(1,913.1)
+ 1
(86)
(87)
Gross Profit
302.3
296.7
+ 2
14
13
Less Expenses (Distribution cost + Administrative expenses )
(81.0 +
46.3 = 127.3)
(70.2 +
42.8 = 113)
+ 13
(6)
(5)
Operating Profit + Deposit Interest
175 + 1.2
= 176.2
183.7 + 3.9
= 187.6
- 6
8
8
Finance Costs
(17.9)
(27.3)
- 34
(1)
(1)
Profit Before Tax
158.3
160.3
- 1
7
7
Less Taxation
(33.0)
(43.1)
- 23
(1)
(2)
Net Profit for the Year, After Tax
125.3
117.2
+ 7
6
5
3.1.1) Interpretation on Income Statement of Debenhams plc:
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It has been shown by the horizontal analysis based on the income statement that the moderate growth can is observable from 2011 to 2012, the increase of 1 percent indicates the growth is slow. The cost of sale grows as well, but at a slower rate, the difference between the two rates that are slowing down explains the 2 percent growth in gross profit. On the other hand, the expenses also rise against investors’ interest and are probably caused by building up new business networks. The horizontal analysis also shows a very significant decrease in finance costs, (-34 %) and taxation (-23 %) from the preceding year, but vertical analysis indicates such significant change has no real impact because the lowered numbers in 2012 remains as the same [pic 14]
percentage from the revenues in 2011
.
In summary, this statement see
ms to symbolise the slow yet constant recovery of British economy as well as the global economy. Despite all this, 7 percent increase in net profit after tax provides a very encouraging prospect for the company. On the other hand, the vertical analysis shows reconciliation on the steady movements.
Table 2: Balance Sheet as at 1 September 2012 and 3 September 2011, Debenhams plc. (For convenience of demonstration,
Comment [RP7]: Good to explain this, but the tables are still far too large for the main body of the report. Better to put them in an appendix.
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Comment [RP5]: Good focus on changes, but some more detail on the reasons why would be helpful.
Comment [RP6]: Good attempt to explain
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