Analysis of Financial Statements for Whitbread Plc
Essay Preview: Analysis of Financial Statements for Whitbread Plc
Report this essay
[pic 1][pic 2]Student Number: 10264502 Course Title: MBA (General) Lecturer Name: Enda Murphy Module/Subject Code: B9AC106 Module/Subject Title: Financial Analysis Assignment Title: Analysis of Financial Statements for Whitbread Plc No of Words: 3354 (Excluding Citation, Bibliography, Table of Content and Charts) Table of ContentIntroduction……………………………………………………………………………………………………………3Ratio Analysis of Whitbread ……………………………………………………………………………………..4Profitability Ratio………………………………………………………………………………………………………4Gross Profit Margin……………………………………………………………………………………………………5Profit before Tax (PBT) Margin…………………………………………………………………………………..6Return on Equity………………………………………………………………………………………………………..6Efficiency Ratio………………………………………………………………………………………………………….7Average Receivable Collection Days…………………………………………………………………………….7Average Payable Days…………………………………………………………………………………………………8Stock Days…………………………………………………………………………………………………………….9Liquidity Ratio……………………………………………………………………………………………………………9Current Ratio……………………………………………………………………………………………………………..9Quick Ratio………………………………………………………………………………………………………………10Financial Leverages…………………………………………………………………………………………………..10Gearing Ratio……………………………………………………………………………………………………………11Debt to equity Ratio………………………………………………………………………….11 Investment Ratios………………………………………………………………………………………………………12Earnings per Share Ratio…………………………………………………………………………………………….12
Price/Earning…………………………………………………………………………………………………………….12Valuation Methods for Whitbread………………………………………………………………………………..13Price Earning Multiple……………………………………………………………………………………………….13Discounted Cash Flow Method……………………………………………………………………………………13Recommendations for Proceed on Investment……………………………………………………………….14Bibliography……………………………………………………………………………………………………………..15Introduction of Whitbread PLCWhitbread has built some of the UK’s most successful hospitality brands, including Premier Inn and Costa. Company employs over 45,000 people in the UK and serves 25 million customers every month. Whitbread strategy is to grow our leading brands with a clear focus on returns to deliver substantial shareholder value.Whitbread is a multinational hotel, coffee shop and restaurant company headquartered in Dunstable, United Kingdom. Its largest division is Premier Inn, which is the largest hotel brand in the UK with around 700 hotels and over 59,000 rooms. Its Costa Coffee chain has 3,080 shops across 29 countries as of 2015 and is the worlds second-largest international coffee shop chain. Its other brands include the restaurant chains Beefeater Grill, Brewers Fayre, Table Table and Taybarns. Whitbread use this Customer Heartbeat schematic to describe business philosophy. [pic 3]Whitbread Annual Report and Accounts 2014/15Its vision is to grow legendary brands by building a strong Customer Heartbeat and innovating to stay ahead. It’s their Winning Teams that make everyday experiences special for company’s customers so they come back time and again, driving Profitable Growth. Whitbread have demonstrated its ability to build strong brands through the consistent delivery of operational excellence and a great customer experience in people–intensive businesses. They set their sights on ambitious and fast–paced profitable growth and, in 2011, set out their first milestones which were to achieve 65,000 Premier Inn rooms by 2016 and £1.3 billion of system sales in Costa. Company is well on track to achieving the 2016 Premier Inn milestone and has already met the Costa milestone. Whitbread extended their milestone in 2013 and they can now see further growth opportunities. Company have therefore announced new milestones to achieve around 85,000 UK rooms and c.£2.5 billion of system sales in Costa in 2020. (Whitbread Annual Report and Accounts 2014/15)Present MarketListed on the London Stock Exchange, Whitbread PLC is a member of the FTSE 100 and the FTSE4Good indices.Ratios Analysis of WhitbreadFinancial ratios provide a quick and relatively simple means of assessing the financial health of a business. By calculating a little number of proportions it is frequently possible to develop a decent photo of the position and execution of a business. Ratio Analysis provides input for evaluating and comparing a company to its peers, or to an industry benchmark.(Peter Atrill, Financial Management for Decision Makers, Fifth Edition Page 68)