Analyzing the Performance of Benedon Limited Company Essay

Analyzing the Performance of Benedon Limited Company Essay

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Analyzing the Performance of Benedon Limited Company

I am writing a report to analyse the performance of Benedon Limited
Company and to compare with the industry as a whole. The report
analyses company and industry performance over the three years up to
at end of 20X3. “It enables us to discover favourable or unfavourable
trends that are developing gradually over time, as well as pointing up
any numbers that have changed sharply in the space of time of just one
year.” (Sytsma, S.) This report reviews the findings of the major
changes and the awareness of weak performances. However, there are
five principal types of ratios which are profitability ratios,
liquidity ratios, activity ratios, solvency ratios and investment
ratios.

Under profitability, competitive pressure has risen in 20X3 compared
to 20X1 and 20X2 as a result of Return on Capital Employed (ROCE) fell
in year 20X3 from 19% to 14.7%, however, the ROCE in the year 20X3 is
better than year 20X1 which had 13.2%. Gross margin (GM) could not be
increased and falls substantially throughout the years as percentage
of sales from 43.8% to 36.6% even though distribution and
administration expenses have lowered every year. Therefore, it could
not reflect the operating margin (OM) which has decreased in year
20X3. The average operating margin figures of Industrial Average (IA)
and in year 20X2 were 16.0% but there is only 13% in year 20X3. In
addition, ROCE in year 20X3 is much lower than the Industri...

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