Books of Deacon plc Report
To: Management
From: Yasmin Mehboob
Date: 16-12-2013
Subject: Analysis of financial performance of McIntosh plc
Introduction
The aim of this report is to analyse the performance of Mcintosh plc in 2013 in comparison to 2012 using the raios calculated and included in appendix 1 as well as the cash flow statement for 2013.
Findings
Profitability
The profitability ratios show that the profits for Deacon plc have increased in 2013 by 2%. The gross profit% determines the profitability of the company once the material costs have been deducted. This has from 35% to 37% in 2013. A possible reason for this may be that the sales have increased or the purchase costs have fallen.
The expenses ratio calculates the running costs incurred in relation to the sales made. The ratio has fallen from 12% to 11% showing that the company is trying to gradually control its costs a bit better in the current year. It may be a result of lower staff numbers or the existing staff coping with the additional work in relation to the sales increase.
The net profit looks at the profitability of the company once all the normal running costs have been deducted. The increase in this ratio by 3% means that the profitability is improving and the reasons due to which it could be increasing could be that the gross profit has increased and that the expenses have not increased at the matching rate.
Liquidity
The current ratio is used to determine the company’s ability to settle its
