AAF044-6 Accounting and Finance
AAF044-6 Accounting and Finance
Section I
Introduction
The “British multi-national transport” is renamed by FirstGroup Plc. It is first inaugurated in “Northeast of Scotland “which is a prominent place in the UK and on the year of 1986. This company mainly operates transport services in the UK and This company’s market share is also listed on “The London Stock Exchange”. The wealth of this renowned company is 0.94 B us dollars. They operate their business with a thought of “first bus and first rail segment”.
Key features of the company
This company mainly operates transport services in the UK and this company’s market share is also listed on “The London Stock Exchange”. The First Group of Plc Extracts this basic principle of the business cycle. When the company thinks this time is expanding their business in the outside countries then they make policies to impose it (Acs et al. 2019, p.14). At the same time, the companies faced contraction, peak, and trough. At that time how the company remain stable is the basic and foremost principle for all. The first group of plc refers that they direct their principle for their costumes and they lead their business with stability. there are also many private sectors all around but they lead with stability. The company regards us that the company working on mobility in a consistent, punctual and convenient manner. They analyze the customer preference for how they attract passengers. They can also analyze the pest and pestle analysis to rehabilitate their management policies.
The current financial position of the last three years
The organization follows the “Key performance indicators “which acronym is (KPI). This `is a basic strategic policy for all companies to measure the company’s valuation, companies’ strategic tools, and also shows us that the companies achieving titles.
“Earning per share” and the “return on capital employed” are the two basic key measurements of the companies. This can be changed the company benefits and the company’s basic esteem and creation of the annual report. In an addition, the company running its business and discarding its operation into approximately £2203.2 million in 2021 £3111.8 million in 2020 and £6271in 2022. That can be reported that after the disastrous attack, covid 19 pandemic will directly hamper the company’s past overview. In the year 2020, and 2021 and the year 2019 company lose its 6.4p 2.4 p and 4.4 p total “earnings per share”. Even at present now they could not recapture theirs before the 2019 market income. It was revealed by Monetary Strength educated that the “returned of capital employed (ROCE)” of FirstGroup plc” was 6.4% in the earlier period and in the next, it remains steady at 9.15. This has also come to bring to light that their trade inconsistency is 8.2% in a financial year (Park et al.2019, p.15).
Channelizing the key competitors
In every sector of the business field, there are also key competitors which break down the company’s strategy owns profit margin (Kaplan et al.2019, p.17). Things not be changed at the time The first group of plc companies. There are a lot of competitors alongside the FirstGroup of plc which is working on the same road as the transport agency. “Stagecoach Group”, “National express group”, and “The Go Head Group” all of these companies provide services to passengers. Each of these companies provides bus or rail services in the United Kingdom. They also offer a discounted rate of ticket fare. In the addition, the organization of ride-hailing administration offer services to users and lifts in these specific sectors (Cohen et al.2019, p.16). In this regard, the positions of the first group of plc and the position of the stock market might be affected by these competitors. If any market strategy does not work in a proper way, then all the companies’ market share goes down their wealth will minimize their profitability ratio also be going down. According to this the first group of plc should properly be worked on their market and strategic policy (Dodgson et al. 2019, p. 19).
Identification of the key resources
key resources of the evaluation of any companies are depending on total physical financial, intellectual, or human resources. These key resources companies gained or leased by the company and can also be acquired by the other company. Not only that the companies also worked intangible resources, product resources and time resources these are the also company’s business resources. The First Group Plc also rearranged every single key resource in their field. At the time of the Covid Pandemic the first group of plc worked on human resources they also channelized and reorganize their employee salary. The company also follows the cost-cutting theory and also prevents “human trafficking, and modern slavery”. This will surround all business activities and a fabricated new business terms and conditions policy is involved regarding the industry or location.
Impact of Covid-19
During the period of covid 19 company what types of opportunities and challenges companies faced are given below:
According to the Bloomberg report and the various journals at the time of COVID-19, The First Group of Plc faced humongous challenges. In a natural, at the time of covid 19, every citizen of the UK is isolated in their house. so that it hampered daily business. They lose at that time 6.4 p in 2019 as many people lost their job during this pandemic. The sector of Public transport was closed during that pandemic. . travelling agency schools’ college everything will be shut down. During that period, the company cost their cutting and feed their employees with a minimum salary.
Section II
Evaluation of the financial performance
| Ratio Name | Formula | Variable | FirstGroup Plc | ||
| Profitability | 2022 | 2021 | 2020 | ||
| Gross profit margin | Gross Profit x 100 Total Revenue |
Gross profit | 2,121 | 2,044 | 1,801 |
| Total Revenue | 4,591 | 4,319 | 4,643 | ||
| Gross Margin | 46.20% | 47.33% | 38.79% | ||
| Net profit margin | Net Profit x 100 Total Revenue |
Net profit | 636 | 78 | -327 |
| Total Revenue | 4,591 | 4,319 | 4,643 | ||
| Net Margin | 13.85% | 1.81% | -7.04% | ||
| Liquidity ratios | |||||
| Current Ratio | Current Asset Current Liabilities |
Current Asset | 1,567 | 2,787 | 2,218 |
| Current Liabilities | 2,075 | 3,586 | 2,920 | ||
| Current ratio | 0.76 | 0.78 | 0.76 | ||
| Quick Ratio (Acid | (Current Asset – inventories) Current Liabilities |
Current Asset | 1,567 | 2,787 | 2,218 |
| Inventories | 29 | 29 | 63 | ||
| Current Liabilities | 2,075 | 3,586 | 2,920 | ||
| Quick Ratio | 0.74 | 0.77 | 0.74 | ||
| Solvency Ratios | |||||
| Debt Ratio | Total debt Total Assets |
Total debt | 2,949 | 7,139 | 7,267 |
| Total assets | 3,834 | 8,293 | 8,444 | ||
| Debt ratio | 0.77 | 0.86 | 0.86 | ||
| Debt-Equity Ratio | Total Debt Total Equity |
Total debt | 2,949 | 7,139 | 7,267 |
| Equity | 885 | 1,154 | 1,177 | ||
| Debt-Equity Ratio | 3.33 | 6.19 | 6.17 | ||
| Performance ratios | |||||
| ROE | Net income Equity Capital |
Net income | 636 | 78 | -327 |
| Equity Capital | 885.00 | 1,154.00 | 1,177.00 | ||
| ROE | 0.72 | 0.07 | -0.28 | ||
| ROA | Net income Total Assets |
Net income | 636 | 78 | -327 |
| Total Assets | 3,834 | 8,293 | 8,444 | ||
| ROA | 0.17 | 0.01 | -0.04 | ||
Table 1: Ratio Analysis (Self-created)
On the report the British international company and the first group of plc is running a transportation business. They facilitated us the train and bus service. In that report we can clarify that the companies past performance of the period have altered over the period of past three years Income decrease in the period of 2021. In the other case in 2022 exhibits the weakness and fickle of the business. on the other hand, financial statement is the important indicator. It indicates the financial, economic health, in an addition the company can use the any resources of the financial terms which is raised their fund.
In the above report first group of plc profitability ratio is increased, the gross profit of company also increased. In the past three years this report showed that company’s total net profitability ratio is less. After the pandemic period the slowly recover it. This report also showed us that in the year 2022 company gain much more profitability index at the higher amount which possible only for taking some proactive actions. Analysis of report showed how the company improve in a year by year.
Market information: Financial structure of a company will be defined by market capitalization. That is computed by each share of price with accrued shares of the company. According to the report first group of plc’s market capitalization was approximately 1.7 billion on the date of April 24, 2023.
In recent times the first group of plc market capitalization varied fundamentally which is reflected the both organization’s monetary implementation. and more large-scale economic solutions. it is really concerned about the company’s financial performance and the direction of the strategic management. In that regard, the company led to a sharp decline in economic resources and the sharp decline in market capitalization. in the period of beginning it reaches all over the high of £2.7 billion.
During the period of covid 19 UK rail and bus transport, agencies faced some difficulties (Vickerman et al. 2021, p.45). The first group of. The transport agencies are closed at that particular time. Companies financial performance remained slow. But when the pandemic is gone the first group of plc takes various options to eradicate their maximum losses. They taking various steps to attract their old investors not only they taking many policies to growth in the field of the stock market. Many significant and effortless measures keep that company alive in the market. Some streamlined operations are the core element which is the mainstream of their success.
The presentation of the company’s performance and the regulate the company’s competitive pressures and the comprehensive economic conditions will be likely to have an impact on the company’s total overview. This total overview is an impact on the eyes of the present investor to invest more and also impacts the eyes of the future investor to participate to invest in market share. Foreign investors closed their eyes on the company’s strategic market decisions. This may result in significant changes in the company’s portfolio and the prospect.
Section III
Comparative analysis
First group of plc and the national express group are the two prominent providers of public transportation in Great Britain. In that case the segment of was presented in the mind that the comparison between two big merchants of the United Kingdom (Kourtis, et al. 2019, p 3). The presentations of their monetary proportions on the date 2020-2022 was exposed. The overall area examines by the numerous scope proportions. Production level of the company helps to organize their disparity executions and its competitors.
In spite the view First group of plc net overall revenue declined from 2021 to 2022 by the percentage of 47.30. Nevertheless the first group plc acquire the positive margin since 2022. On the other side national group of plc acquired negative margin in all the three years (Cohen, 2018, p 7). As a conclusion net profit margin is the serious problem for both the companies.
The two business organizations’ Capacity for their fulfilling temporary adherence is declined by the propositions of current members (Williams et al. 2021, p.22). In the above the reports says that current ratio of the first group plc 0.78 at 2021 its will be increased to 076 in 2022.on the other side the quick ratio of national Express group reveals us that they meet their short term obligations with efficient way . both the national express group and Plc acquire higher rate of quick ratio in the both year 2021 and 2022 (Hosaka, 2019, p 6).
This ratio exemplifies the high debt-to-asset ratio. This also indicates the high level of leverage. Nevertheless the national express group and the plc have a lower obligation-to-resource ratio (Kimmel, et al. 2020, p 2). Both of the companies are slightly performance lower in 2022, both the companies are dependent on their debt to fund ratios.
In the year 2022 the first group of plc companies ROE 0.72 but in the past period it will be in negative -0.72. On the other side, National express group running continuously in negative.
In the above data its clarifies us that first group of plc return of assets stable in a higher portions with .17 on the other side national express group return of assets in a negative that defines the company cannot meet their current and fixed assets (Rinaldo and Endri, 2020, p 4) .
Section IV
Supporting arguments:
In the above circumstances, the report clearly explained to us that the directors of the company participate in every to evaluate the company’s performance evaluation. In the above the Fiscal report which is shown us that the “UK embraced worldwide bookkeeping principles”. The liabilities, the monetary positions and the productivity of the business entity furnish a clear in that statement. According to the company’s financial statement which was shown above with the following the UK accounting standard board. The statement was prepared by following the UK accounting standards FRS 101. The statement also gives us an audit review. The fundamentals of the audit report are true and fair view of the companies of the companies’ financial statements. it is the foundation of the basic business entity (Campisi, et al. 2019, p 9). Moreover, this report organizes a fair survey. which is closing many new policies, reorganising the and thinking about the new event of the company. Despite that, the business organization faced a negative FCFE, in the past 3year ago. While encountering it and reducing the maximum losses which the company faced at that time.
This exemplifies in the cash flow of the organizations. The report says that the Cash Inflow of the companies were inadequate to meet the requirement of the company’s future aspect. The cash inflow is also inadequate to fulfil the working capital of the company. The company’s quick requirements like capital and current assets are not sufficient that’s why the company could not optimize their quick or current asset ratio. “The dividend growth model’ Exemplifies the first group of plc financial position. So that result in the shows us that the profit for 2025 will be approximately 0.48. In that case the company accept the Ke of 8.45%and the normal profit of the company are 38.98%.
Reference List :
Dance, M. and Imade, S., 2019. Financial ratio analysis in predicting financial conditions distress in Indonesia Stock Exchange. Russian Journal of Agricultural and Socio-Economic Sciences, 86(2), pp.155-165.
Hosaka, T., (2019). Bankruptcy prediction using imaged financial ratios and convolutional neural networks. Expert systems with applications, 117, pp.287-299.
Kimmel, P.D., Weygandt, J.J. and Kieso, D.E., (2020). Financial accounting: tools for business decision-making. John Wiley & Sons.
Kourtis, E., Kourtis, G. and Curtis, P., (2019). An integrated financial ratio analysis as a navigation compass through the fraudulent reporting conundrum: a case study.
Park, J.S., 1996. An exploration of the outsider’s role in selected works by Joseph Conrad, Malcolm Lowry, VS Naipaul (Doctoral dissertation, Queen Mary University of London).
Rinaldo, N.E. and Endri, E., (2020). Analysis of financial performance of plantation subsector companies listed on the Indonesia Stock Exchange for the 2014-2019 Period. International Journal of Innovative Science and Research Technology, 5(4), pp.530-537.
Vickerman, R., 2021. Will Covid-19 put the public back in public transport? A UK perspective. Transport Policy, 103, pp.95-102.
Williams, A., Whiteman, G. and Kennedy, S., 2021. Cross-scale systemic resilience: Implications for organization studies. Business & Society, 60(1), pp.95-124.
Cohen, M.C., (2018). Big data and service operations. Production and Operations Management, 27(9), pp.1709-1723.
Dodgson, M., 2018. Technological collaboration in industry: strategy, policy and internationalization in innovation (Vol. 11). Routledge.
Know more about UniqueSubmission’s other writing services:
