The company, if unable to turn its business around, can allow private equity to buy it out and reshuffle management to help establish a more profitable business. If it does not change its financial position soon the company is a prime target for takeovers by more profitable companies in its sector.
A financial analysis of the company’s balance sheet and income statement since 2009 reveals its short comings.
|GBP '000 unless otherwise stated | | | | |
| |2012 |2012 Common |2011 |2011 Common |
| | |size | |size |
| | | | | |
|Revenue |4580 |100.0% |5725 |100.0% |
|Change in Revenue(%) |-20% | | | |
|Cost of Sales |-3539 |-77.3% |-4319 |-75.4% |
|Change in COGS(%) |18% | | | |
|Gross Profit |1041 |22.7% |1406 |24.6% |
|Advertising and Promotional Cost |-317 |-6.9% |-336 |-5.9% |
|Other Admin Expenses |-1126 |-24.6% |-1120 |-19.6% |
|Depreciation and Amortisation |-9 |-0.2% |-6 |-0.1% |
|Impairment of Intangible Fixed |-22 |-0.5% |0 |0.0% |
|Assets | | | | |
|Total Admin Expenses |-1474 |-32.2% |-1462 |-25.5% |
|Operating Loss |-433 |-9.5% |-56 |-1.0% |
|Finance Income |47 |1.0% |13 |0.2% |
|Finance Expenses |-115 |-2.5% |-130 |-2.3% |
|(Loss) before tax from continuing |-501 |-10.9% |-173 |-3.0% |
|operations | | | | |
|Income Tax |0 |0.0% | |0.0% |
|(Loss) for the year |-501 |-10.9% |-173 |-3.0% |
2011 – 77days trade