Financial Statement Analysis A.G. Barr

monetary rumor Analysis A.G. Barr monetary Statement AnalysisIntroductionA.G. Barr p.l.c. is based in join Kingdom it maufacture, distri notwithstandinge, and sell wanton drinkings. A.G. Barr. ope directs in carbonates and peeing. Company has a wide range of grades which includes IRN-BRU, Rubicon, Barr Brands, KA, Strath more(prenominal), Simply, Tizer, DNB, St. softs, Findlays and Abbotts. Company also has some partnership brands which includes Orangina, Rockstar and Snapple. The manufacturing bea located in United Kingdom. Findlays Limited, subsidairy of A.G. Barr P.l.c., is engaged in Rubicon Drinks Limted and natural mineral water as well as the manufacture and statistical scattering of soft drinks. Schweppes external Limited is also a franchise partner of A.G. Barr p.l.c in United Kingdom, authorized for manufactures and sells Orangina. It also has collabo ration with Rockstar Inc. in the United States to sell and distribution of energy drink, Rockstar brand in Irela nd and United Kingdom. The following pie-chart represent foodstuff per centum of soft drinks and low calorie drinks. They st scoregy hold up certain in a way to deliever long margin out gain in value and foc victimisation on core brands and securities industrys, brand portfolio, route to market, partnerships, laid-back-octane operations, people development, sustainablity and responsibility.Financial ReviewThe business dischargeance throughout 2013 of A.G. BARR has perform well in U.K soft drinks market peculiarly in cooperate half of the fiscal family with double digit growth rate. The frugal conditions in the core market segments survied difficulties in 2012, as well as the increasing personify of promotion order margins. A.G.BARR growth rate for book and revenue increased more rapidly then the market in carbonates ans still segments. The overall growth of softdrinks experienced carbonates growth rate of 3.8% in value but decreases in wrong of volume, showed grow th of 1.9% with avolume declining 1%. In 2013 A.G. BARR carbonates volume increased by 6.0% and revenue increased by 7.1%. On the other break stills also performed better with a growth of 4.3% in revenue and 4.1% in volume. In addition to delievering a growth higher then the market and much of the build program associated with their new-fangled production and storage facility at Crossley Road, Milton Keynes. The Milton Keynes site is an important addition for future business developments. Adverse whether condition in 2012 impacted soft drinks category according to Nielsen research, reflects 0.7% decline while to volume grew by more or slight 3%. Conumer participation in the carbonates category has remained at high train supported by price-driven promotions across the main brands.Ratios analysis over the brave out 3 classsProfit Margin According to the monetary logical arguments finish January 2013, Company declared a profit after assess revenue of 25.564 million which represent 10.76% of its sales. current family revenue grew by approximately 7% from prior year and 3.42% on the basis of bonny growth rate from the last three year. Profit before tax and olympian fact in 2013 increased by 4.3% but profit margin was about reduced in 2013 as compare to 2012, due to higher price of goods. In 2012, observed as a climate of continued frugal uncertainty and increasing cost. Despite these challenges federations profit before tax and invite outional item increased by 6.2% from 2011. In 2011, Profit before tax increased by 13.3% from 2010. In 2011 AG Barr observed 10.4% growth in revenue as compare to 7% in UK soft drink market.Current ratio measure the fiscal stability of a corporation to pay its current liability. According to the financial statement, in 2013 current ratio represent 1.31(in snips) thus political party has enough to pay its financial obligation. Current ratio in 2012 represent 1.46 (in times) which shows that social club finan cial stability in 2012 is better among 2011 and 2013.Quick ratio measures the financial stability after deducting inventories and prepay expense because they cannot be easily converted into cash at evenhandedly value. Quick ratio show clearer picture then current ratio, the come withs financial stability in 2012 of having 1.043(in times) as compare to average 0.9 (in times) in the rest of year. work hood is defined as the financial ability of a partnership to pay its short term obligation. workings Capital is an important factor used to measure its financial health. Working Capital Management is the strategy of a company to maintain high-octane levels of both asset and liabilities to improve their buildings. It is calculated as current assets damaging current liabilities. It involves focal point of inventories, cash, accounts payable and account receivable. Working capital is necessitate to support the day to day business operation it is treated as life blood for smooth and effective business operations. Working capital in 2013 and 2011 is less as compare to the 2012. In 2012 company has 20.934 millions more than its liabilities. Thus in 2012 company has managed their day to day operations effectively.Dividend A.G. Barrs efficient performance through the year enabled them to distribute per share dividend. In 2012 companys profitability reflected in its dividend, declared 25.96 per share, which is high through the rest of years.Inventory employee turnover ratio measures the number of times the company change its memorandum throughout the year. AG Barr have inventory turnover of 6.51(in times) in year 2013 which means that company has 1.84 month of supply of inventory on hand. In 2012 and 2011, company has 2.02 (in times) and 2.05 (in times) months of supply of inventory on hand.hard roe ROA Return on equity in 2013 is greater then chase away on asset by 12.55% across the year it means that company is utilizing its asset perfectly as well as o ptimizing its debt effectively. It also shows that management is generating good result from shareholders investment.Account receivable turnover Account receivable shows address policy of a company according to which average time allow to customer to pay their debt. In 2013, 12.64 days took to recover their credit sales. Among the three year, in 2012 company was recovering their sales quickly at the rate of 7.70 days as compare to the rest of years.Operating encounter can be defined as the more the proportion of fix cost and lower variable cost is said to be high operating leverage. A ratio which is parklandly used to determine the effect of operating leverage at given level on the self-coloureds potential earning is calculated by dividing, % flip in EBIT by % change in Sales.Financial Risk is the use to debt in it is calculated by dividing % change in EPS by % change in EBIT. Financial risk is not dependent on sales because whether a company has high or low sales it has to pay fix interest. By calculating financial leverage of AG BARR it appears that only 1% change in EBIT, Earning per share would change by 0.93.Preparation of financial statement Financial statements of A.G. BARR p.l.c. have been nimble in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. They have been prepared under the historical cost accounting rules except for the derivative financial instruments and the assets of the Group pension scheme which are stated at sporting value and the liabilities of the Group pension scheme which are valued using the projected unit credit method.FINANCIAL MARKETS AND THEIR IMPACTFinancial market is a market where an individual and corporation can trade financial securities, commodities. This table shows classification of market and instrument through which corporations can energise cash in hand. superlative funds from equity market may lead the investor to cypher that the company financial flexibil ity is weak, and they are unable to get funds from banks or other sources. Stock issue leads to decreased earnings per share. Raising capital from unconnected investor involves two main risks which are relevant for foreign investor. They include economic risk and political risk. Economic risk is less in countries with absolute and perpetual economy situation. On the other hand political risk is linked with the economic stability of a country. policy-making decision and policies plays an important role in an economy. Political risk also called sovereign risk, the ability of a company to pay its foreign financial obligation. Risk is defined as uncertainty. The indication of risk and reward choose the investor that it would have a possibility to loss some or all in all of its investment, an investor may experience bullish trend on his investment.Risk and drop dead are directly correlated. The more you take risk, the more the likely bear is, because investor demands additional r eturn for additional risk. In finance this relationship is cognise as the security market line. greenness stocktaking and corporate bonds are two asset classes. Corporate bond is a debt instrument and common stock is equity. Corporate bonds and, TFCs are issued by a corporation and sold to investors. Government bonds are less risky then corporate bonds. Common stock is riskier then corporate bond because if an organization goes bankrupt, common stock holders get last priority until debt holders and preferred stock holder have authentic their assets. But common stock holders have the possibility to earn greater or lower return as compare to stable return on corporate bonds.As far as A G BARR, capital structure for the last two years shows that debt weight-age of the extreme asset was 42.64% and 50.44% in 2012 and 2013 respectively. So the company has raised fund through debt in order to meet the financial need of company. One of the major benefits by using debt financing is tax advantage and borrowing has a fixed return to stock holder. It has positive impact on the unwaveringly but because company failed to control its operating expenses, net profit in 2013 is less than 2012.Future ProspectsA.G. BARR has observed a healthy performance in a marketplace impacted by the mixture of very despicable summer weather conditions and the continuing economic challenges faced by consumer goods companies, especially raw material cost pressures and unpredictable consumer demand. Looking ahead it is probationary that these challenges will significantly change, however they remain carefully confident that the crew of our established operating model, continued focus on efficiency, building brand equity, sound balance sheet and ability for growth prospect open them well placed to continue to build on this performance. In the year ahead, they expect some decrease in the pace of input cost inflation which we expect to be at a low bingle digit level. Current market pric ing for PET is down year on year, fruit pulp costs are lower but the cost of sugar remains persistently highConclusionA.G. BARR has delivered strong financial performance in challenging year markets. Their products continue to suffice well to equity investors. They have driven strong growth in revenue and volume and have continued to increase market share across the soft drinks market. Product and supply chain innovation enabled numbers game of consumers to their brands. They are further investing in assets, acquiring additional susceptibility that enables them to grow according to consumer demands and in line with the market pace. Following a challenging 2011, last financial year survived with strong in terms of operational performance. Last year reported growth in products approachability and customer service has improved and cost managed effectively. During 2012 the potential merger received overwhelming shareholder support. In 2013, financials reported profit before tax incr eased to 35.0 million, showed 4.3% increase from the previous years. Earnings per share increased during the year by 10.9%. Their balance sheet measures have improved, showed net assets of 130.6 million, during the year company also generated free cash flow to the firm of 22.0 million. A.G. BARR p.l.c. group brands, as well as their franchise brand Rock star, showed 8.6% growth. This performance is preceding(prenominal) as compare to the market reflects that they continued opportunities to develop availability, innovation and distribution among their brands. Their geographical growth rates grew by 4%, and investment except U.K. grew by 12%, showing both important long term growth opportunities and comparably important share from their brands.ReferencesA.G. BARR p.l.c. Annual report 2013 pages 70 124 http//www.agbarr.co.uk/pdf/Final Results Announcement January 2013.pdf Accessed 12th May 2014A.G. BARR p.l.c. Annual report 2012 pages 62 94 http//www.agbarr.co.uk/pdf/Final results announcement January 2012.pdf Accessed 12th May 2014