Financial Analysis Essay

Submitted By GiffyCandy1
Words: 4604
Pages: 19

Travis Perkins Financial Analysis

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Table of Contents

1. Executive summary……………………………………………….………………………………………………………………3

2. Introduction………………………………………………………….……………………………………………………………….

• Industry Overview (Building Material Industry)…………………………………………………..……4

• Travis Perkins Overview……………………………………………………………………………………………5

• Travis Perkins Key Competitors………………………………………………………………………………..6

• Wolseley Overview…………………………………………………………………………………………………..7

3. Travis Perkins and Wolseley Financial Analysis………………………………………………………………………

• Growth Ratios…………………………………………………………………………………………………………..8

• Profitability Ratios………………………………………………………………………………………………….12

• Liquidity Ratios……………………………………………………………………………………………………….17

• Efficiency Ratios……………………………………………………………………………………………………..19

• Gearing Ratios………………………………………………………………………………………………………..23

• Investor Ratios……………………………………………………………………………………………………….26

4. Conclusion and Recommendations for Investors…………………………………………………………………33

5. References………………………………………………………………………………………………………………………….34

6. Appendix………………………………………………………………………………………………………………………………..

• Travis Perkins and Wolseley Ratios Calculation………………………………………………………37

• Travis Perkins and Wolseley Share Price Graph between 2010 and 2011……………….39

• Travis Perkins Balance Sheet....………………………………………………………………………………40

• Travis Perkins Income Statement……………………………………………………………………………42

• Travis Perkins Cash Flow…………………………………………………………………………………………43

• Wolseley Balance Sheet....………………….………………………………………………………………….44

• Wolseley Income Statement………..…………………………………………………………………………45

• Wolseley Cash Flow………………………………………………………………………………………………..46

Executive Summary

The aim of this report is to analyse the financial position of Travis Perkins plc. and compare the company performance with its key competitor, Wolseley plc. This report includes a profile of companies, encompassing company history, and detailed analysis of the financial results both have posted. All of these provided to make it easier to understand the company’s performance and compare the efficiency and effectiveness of both organisations.

We analyse the performance of the company into six aspects, which include growth, profitability, liquidity, efficiency, gearing and investor view. At the end of this report we examine the financial ratios of both the companies, it is suggested that Travis Perkins held a better position in revenue growth and profitability while Wolseley took more risk with expectation to capitalize opportunities from the environment.

Introduction

• Travis Perkins Overviews

• Travis Perkins Key Competitors

-Wolseley plc

-Saint Gobain Building Distribution Ltd

Table 1. Data below presents an overall performance of Travis Perkins compared to its competitors (Wolseley and Saint-Gobain plc.) year 2011.

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• Wolseley Overview

Travis Perkins and Wolseley Financial Analysis (Ratio Analysis)

Growth Ratios:

• Sales Growth

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Figure 2. Compare sales growth between Travis Perkins and Wolseley between 2010 and 2011.

There was a dramatic increase in sales growth of Travis Perkins plc. by 44%. This indicates that the company had better performance in sales generation through the period.

For Wolseley, there was an increase of 11.30% in sales growth over the time.

When comparing, Travis Perkins…