This website uses cookies to ensure you have the best experience. Learn more

Report For The Eagles Ltd Board Of Directors

1774 words - 8 pages

Introduction
A report for the Eagles Ltd board of directors has been prepared by external consultant. In this report ratio analyses have been used to comment on the performance of the business over two year period (2008 and 2009). Profitability, Liquidity, Efficiency and Gearing ratios have been calculated (See Appendix) and used to reveal and explain the situation in the company.
Firstly the importance of each kind of financial ratios is explained. Then each ratio is analysed according to provided information (income statement and balance sheet). Finally recommendation for further actions for Eagles Ltd is given.
Limitations
• If used incorrectly ratios can be useless and misleading ...view middle of the document...

30£ (2008).
Gross profit margin
According to Atrill and McLaney (2008) gross profit is used to measure company’s financial health. Khan and Jain (2007) states that this ratio reveals the amount of left over money after company has accounted for the cost of goods sold. Gross margin for Eagles Ltd in 2008 was 46.3% that is considered to be high index. After paying for inventories sold, company was left over with 46.3p from each £ of sales revenue. With this amount company is supposed to cover other operating expenses and also leave an operating profit for the current year. The following year company experienced slight decrease (10.7%) in gross margin.
Analysis of Gross profit margin and ROCE ratio
The reasons of 5% decrease in gross profit margin can be stated:
• ineffective stock control
• selling price not increasing in line with the costs of the goods that company sells.
Eagles Ltd can ensure adequate coverage for operating expenses (See calculation in Appendix) and sufficient return to the owners of the business.
ROCE can be influenced by factors such as:
• economic climate,
• degree of competition,
• industry characteristics, and
• the type of customer (Atrill and McLaney, 2008).
Eagles Ltd was left with 28.7p (2008) and with 19.2p (2009) as an operating profit for every £ of sales revenue.
Efficiency ratios
Efficiency ratios measures how well you business is conducting in the market. This ratio is important as to valuate if company’s credit term are appropriate and whether purchasing has been effective. (Reference for Business, 2010)

Efficiency ratios 2008 2009
Inventory period 68 days 60 days
Trade receivables period 23 days 36 days

Inventories turnover period
Bragg (2007) states that inventories turnover period measures the ability of company to convert its debt and equity into dollars of sales. Eagles Ltd in 2008 could have sold its entire inventory in 68 days whereas in 2009 it took only 60 days. For company it can be crucial to find the right level of inventories turnover period as the longer the period the more costly it can be for company to stock their inventories in warehouses (Atrill and McLaney, 2008).
Trade receivables period
Khan and Jain (2007) suggest that trade receivables period estimates how long does it take for customers to pay their outstanding debts. From this ratio (whether it is high or low) conclusions can be made referring to the quality of the credit and collection procedures that company uses. For Eagles Ltd this ratio was 23 days (2008) and 36 days (2009). That means that in 2009 company had to wait 36 days to receive money from customers who bought their inventories on credit.
Analyses of Inventories turnover ratio and Trade receivables period
In 2008 it took 68 days for Eagles Ltd to sell all of their inventories whereas in 2009 it took 60 days. This improvement could have saved some money, because the cost of holding inventories might have decreased. On the other hand...

Other Essays Like Report for the Eagles Ltd Board of Directors

Sierra Readymix (Pvt.) Ltd. Marketing Strategy for the New Design & Project Management Wing

2100 words - 9 pages SIERRA READYMIX (PVT.) LTD. MARKETING STRATEGY FOR THE NEW DESIGN & PROJECT MANAGEMENT WING 1.0 Introduction Sierra Readymix (Pvt.) Ltd. (SRL) is a subsidiary company of Sierra Construction group of companies aimed at providing specialized ready mix concrete (RMC) to the Sierra group & to Sri Lankan Colombo-Gampaha-Kaluthara based projects in construction sector. SRL performed well and sustained an exponential growth since inception in 2005

'Rule By Institutions' is the name of the essay and its an essay on institutions that the directors in Aldous Huxley's 'Brave New World' used to control citiznes

562 words - 3 pages " Fanny is the best example of this trait, because she reprimands Lenina for seeing too much of Henry Foster and not enough of everyone else (43). The way that drugs are able to alter the state of mind piqued the interest of directors of the Brave New World. When they were searching for methods of controlling strong emotions within the clones, the directors turned to a drug. A new drug called soma was created that induces a "dream-like" state

The Report of Hong Kong

4112 words - 17 pages -heated real estate would be a big concern for Hong Kong government. In addition, the dependence on land sales revenue should have to reduce if Hong Kong government wants to achieve a long- term fiscal sustainability. The table below clarifies that different level and different type of risk shown from this evaluation and analysis report, reveals that overall risk are in the low level of risk, except for the real-estate and environment risk

Role of the Manager Report

2323 words - 10 pages Introduction In this report I will examine the extent in which the concepts of the Managerial Escalator fit with the experiences of two managers that were interviewed by me. The first part of this report will try and clarify the concept of the Managerial Escalator with focus on Rees and Porters different concepts as well as unfolding their own standpoint on it. The second part of the report will show a clear analysis of two managers who have

The Pacific Corporate Social Responsibility Report 2007 for Cathay

4515 words - 19 pages 14 8. Bibliography 15 1. Executive Summary This report critically evaluates and scores the 2007 Cathay Pacific Corporate Social Responsibility Report (“CPCSRR”)[1] against a number of reporting guidelines. Consideration is made of how the CPCSRR measures against the environmental management systems called for by

Downstream Report of the Coca Cola Company

2826 words - 12 pages   of  thepromotional support need in order to meet the target  sales.  He  does  this  bylooking back to the amount  of  post  sales  support  and  then  plans  for  the promotion. While doing this he also keeps in mind the impact on  future  productsales. Weekly reporting to the country managerHis report to the country manager consist of the overall weekly  achievement  interms sales volume of his territory and any other major issues if any

Impact of the 2010 Iom Report

1563 words - 7 pages nursing profession in order to adjust, engage and guide actual needs and rapid changes of healthcare reform. The committee placed together some important roles surrounded by legal concerns picturing the future of nursing. The IOM report pays particular attention on many critical elements of nursing. The principal focus of the report was to create recommendations not only for the advance practice registered nurses, but also to provide opportunities

Biology Laboratory Report - the Activity of Amylase

774 words - 4 pages Biology Laboratory Report - The Activity of Amylase Andreas Dobler, 3CO SWISS INTERNATIONAL SCHOOL SUPERVISOR: Lab Report: The Activity of Amylase Background The Food that we eat is digested as it passes through the alimentary canal. During this journey it is broken down and reassembled into a suitable form that the body tissue can use. It is than absorbed in the small intestine by finger like structures called “villi”. The molecules

Lord of the Flies Drama Production Report

569 words - 3 pages as if it would not affect them. Darkness returns and this time the sound is not of distant planes or bombs, it’s of a very real plane crash, within the darkness it would be easy for those of no imagination to feel detached from the happenings, but a few people would feel the horror and the dread. We then proceed to watch a small group of survivors, young boys, try to survive. The boys try to put into action the same rules that society uses, these

Tales Of The City - Book Report

5780 words - 24 pages small number of San Francisco residents. With each new chapter there is a personal development for the characters within. It is this sense of development that is most important for the continuity of Tales of the City. The development neatly meshes the character's lives with one another, till ultimately the product is a mass evolution.It is interesting to note that the writing style Mr. Maupin uses to guide the story forward is consistent throughout

The Business Report of the Australian Major Footwear Retailer-Ugg

2705 words - 11 pages relationship to marketing is the sources of the report. For example, academic journals, textbook, statistics from formal organizations and company websites and newspaper. There are some assessments to evaluate the field of marketing in The UGG Company after assessing. There are two main recommendations for The UGG Company to improve its business: 1. UGG should improve marketing information system in order to do some research to satisfy customers’ needs

Related Papers

Research Proposal For Development Of Training Manual For Senior Directors

8959 words - 36 pages (World Health Organization 2007). Directors of a senior center are therefore the key personnel who take direct responsibility for the welfare and well-being of the adults under their care (Torres, 2003). The employees of the senior center may be both paid and unpaid (volunteers) (Torres, 2003). All staff must be trained in basic understanding of an aging adult, recreational therapy, basic first aid, CPR, planning activities as well as training

The Management Of Prime Bank Ltd

3979 words - 16 pages Stock Exchanges. Directors As per Bangladesh Bank BRPD Circular no. 09 dated 19th September 1996, banks in Bangladesh can provide only the following facilities to the Directors: • The Chairman of the Board of Directors may be provided car, telephone, office chamber and private secretary; • In addition to the above, Directors are entitled to fees and other benefits for attending the Board, EC, Audit Committee and Shari’ah supervisory

Boards Of Directors’ Composition And Financial Performance: The Columbia Sportswear Case

4807 words - 20 pages part about minority representation. Then, there will be an overall conclusion about board composition. A. Board Size As we can see from part III (Table 1) of our report there are 10 members in the Board Of Directors. This is a medium size for a board as there are larger boards with approximately 30 persons. Nevertheless, Columbia Sportswear Company tries gradually to increase the number of its directors. From 6 that existed in 199 8 they

Observing The Shasta County Board Of Supervisors Meeting

919 words - 4 pages Observation Meeting The Shasta County Board of Supervisors meeting was very informative, structured, and maintained the objectives of the agenda. I observed the meeting on Tuesday, September 16, 2008 at 9:00 a.m. at Shasta County Administration Center. The meeting lasted for about forty-five minutes. Shasta County consists of five districts with a supervisor for each. District 1, David Kehoe; District 2, Mark