Rolls Royce

Rolls Royce

Rolls Royce is a public Limited Company. To become a public limited

company. It is required a Memorandum of Association, Articles of

Association and Statutory Declaration. When Rolls Royce got a

certificate of Incorporation, they began to publish a prospectus. That

means, they can issue shares for inventors to buy and raise capital

from the market.

Advantage:

PLC raises a large amount of capital to expanse its business or

diverse business. . In case one of the industrial declined, other

industrials can cover the loss. So that it can reduce risks. They can

raise funds from many ways. For example: issue shares, debentures

etc. They raise the capital more easily and the interest rate would

be much low.

They employ expertise and specialist to manage its business and

develop new products. The companies come response the market

efficiently. And they design appropriate products for potential

customers. It generates profits for the company.

PLC enjoy limited liability. When the company goes bankrupt. The

shareholder will no be liable to lose its own possessions to pay the

debts. It is only lose what they invested in the company. It is a

kind of protection for the shareholders.

Production costs may be lower. The companies buy raw materials in

bulk and regular basic. They enjoy economies of scale.

Disadvantage:

Raise fund for stock exchange can be costly and risky. As if the

people think the company aspect is not good. They will not buy the

shares. And the company can’t raise any money.

As a Public limited company, it can’t keep its finance and some plans

in secrete. This information can be easy taken by the competitors.

And make some planning to against the firm.

The shareholders many lose control of company. It is because shares

are freely bought and sold in the exchange market. If other companies

target the company, they can take over it. Also, most of the

organisation split up the ownership and management of the company.

That mean, the manager may make wrong decisions that cause

shareholders suffer.

PLC is a large size of company. They have to deal with millions of

customers. In other words, it can satisfy individual needs compare

with sole trader. So they won’t purchase the products or use the

services. They company lose customers and lose profits.

The Objectives of Rolls Royce Group

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...ble donations, contributions of around 1565,000 were made to

projects through the Group's corporate sponsorship committee and

through educational programmes: business start-up programmes,

environmental education project etc.

In addition, Rolls Royce opens its industry for different communities

to visit every year. Also they are offering children the chance to

learn more about the plane industry by offering to attend the air show

for free. It is to arouse their interest and encourage them to learn

science.

Making profit

“Rolls-Royce objectives and offer long-term security of revenue.”

The group’s priority is to increase the margins is regularly. In 2003,

the rapid growth military engines demand which is very profitable and

win a significant engine and service contact. They expect there will

be continued 10 percent growth in the business in 2004. Gross margin

increased from 16.3 per cent to 17.3 per cent as the substantial

increase demand in engines. They would reserve part of the profit to

do research and develop its products. For motivate the employees, they

increase the training and rewards to its employees. They expect 10

growth in the profit in 2004.