Essay on BBC Financial Analysis - 2222 Words

University of Bedfordshire Individual Report Financial Analysis (AAF001-6) Assignment 1-B Prof. Mohammed El Daly Prepared by Moin Ul Haq Jan Msc. International business and Management November 13 2010 CONTENTS Introduction Background Analysing Financial and Profitability Ratios Current Ratio Liquidity Ratio Solvency Ratio Assets turnover Ratio Profit Margin Debtor Days Creditor Days Gearing Ratio Stock Turnover Ratio Return on Capital Employed Return on Shareholders’ Funds Conclusion and Recommendation Appendix†¦show more content†¦Analysis of the Financial and the Profitability Ratios 1. Current Ratio helps us measure the ability of a company to pay off its short term debts using its most liquid assets. 1.5 is the benchmark. If it’s less than 1 that means the company is not able to meet its current liabilities using its liquid assets. In th GBP 31/03/2010 31/03/2009 31/03/2008 31/03/2007 Current assets 278,200 326,100 348,200 217,000 Current Liabilities (386,800) (310,300) (271,100) (252,900) Current Ratio 0.90 1.05 1.03 0.86 Interpretation and Explanation In case of BBC, we can observe a positive trend. There has been a significant increase in the ratio. However in 2007, the company’s current liabilities were higher than the current assets.But over the next two consecutive years 2008 and 2009, the company’s assets were enough to pay off the short term debts, and this is a positive sign. Talking about the current year 2010, the current ratio is below the benchmark, but the cash reserves are more. we can see a constant change in the values of current assets in a positive trend for last three years, however, not for the year 2010. Again there has been increase in current liabilities substantially. This can be one of the reasons for a funding cut of  £340m this year by BBC as George Osborne confirms the news on Oct 20th 2010.Show MoreRelatedA Report On The s Change Model, Balance Scorecard And Effective Leadership1341 Words   |  6 PagesExecutive Summary This report will address strategy implementations for BBC3. The BBC have suggested to close BBC3. However from our SWOT (appendix 1) and Porters 5 forces analysis (appendix 2) it was concluded that they should not do this. Instead the BBC should keep BBC3 and close BBC4. This report looks at how the change can be implemented using Lewin’s Change Model, Balance Scorecard and effective leadership. 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