Ratio Analysis of Domino's Pizza Essay

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| 2009 – 2010 | | Masters in Business Administration |By- Tesar Singh Chauhan

[DOMINO’s PIZZA UK & IRL FINANCIAL PERFORMANCE ANALYSIS] | Submitted as a part of module assessment for Accounting and Control |

CONTENTS: Page Number 1. INTRODUCTION 2
1.1 DOMINO’s at LONDON STOCK EXCHANGE
And Trading Information 2

2. FINANCIAL RATIO ANALYSIS ON DOMINO’s
PIZZA UK & IRL PLC’s PERFORMANCE 3

3.1 PROFITABILITY RATIOS 3-4 3.2 LIQUIDITY RATIOS 5-6 3.3 EFFICIENCY RATIOS 7-8 3.4 GEARING RATIOS 9-10 3.5 EMPLOYEE RATIOS 11 3.6 INVESTORS RATIOS 12-14

3. CONCLUSION 15

4. BIBLIOGRAPHY

APPENDIX A – Balance …show more content…
* This increase may be attributed to the 63% increase in the online orders received thus saving on the cost of manpower employed to take orders. The increase in online sales boosted the system sales by 19.3%. Increase in sales comes as DOM benefits from cash-strapped consumers eating its pizzas in their homes rather than dining out.(www.uk.reuters.com) * The profit margin of Dominos is almost double compared with that of Pizza express which stands at 9.22%. This shows that DOM is doing well in comparison with its competitors.

Ratio | Formula | 2010(£000) | 2009(£000) | Returns on Equity | Profit Attributable to Shareholders x100 | 27129 x100 | 21574 x 100 | | Book Value of equity | 41662 | 21576 | | | =65.12% | =99.99% |

This ratio considers matters more specifically from the shareholders’ viewpoint (McLaney 2009)

Interpretation: * The Returns on equity has dropped by 34.87% which is not a good sign for shareholders but high ROE doesn’t yield immediate benefits. * According to industry standards, which were around 35%, 65.12% is still large enough to attract investors to reinvest. * The main reason for the fall is almost doubling of the book value of equity whereas profit attributable to shareholders has just increased by 25.7%

2.2 Liquidity Ratio :-

Liquidity ratios are used to assess the extent to which a business can
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