FINANCIAL MANAGEMENT

Financial Management

Financial Management

Task: 1

Financial Performance of the Gregg's Plc

Greggs is engaged in the retailing of sandwiches, savories and other bakery related products. Co. specializes in sandwiches, savories and other freshly baked food on the go. Gregg's Plc is listed on the main London stock market, where it's a constituent member of the FTSE 250 index. Greggs Plc was founded by Mr. John Gregg as a Tyneside Bakery in the year 1939. The first retails outlet of the company opened in Gosforth, Newcastle in the year 1951. The company witnessed considerable expansion after taken over by Mr. Ian son of Mr. John Gregg. Mr. Ian started the expansion of the company by acquiring other bakeries such as Leeds based Thurston's in the year 1972 (Gregg's Plc 2000, Pp. 3-36).

Gregg's Plc is planning to open around 600 more stores in the near future and, it will create around 6,000 new retail jobs. More over the company is planning to extend the serving capacity of the existing retails outlets. On June 19, 1994, Company acquired Baker's Oven business with 424 outlets at a net cost of £12,000,000 from Associated British Foods plc. On Feb. 27, 1995, Co. incorporated a new division, Greggs of Twickenham, based on the Baker's Oven bakery in Twickenham comprising of 91 shops in South and West London and the adjoining countries. On July 30, 1995, Co. acquired 100% share capital of Oliver's (U.K.) Limited.

Stock Market Research

Ratio Analysis

Financial Analysis of Gregg's Plc

The trend analysis of the Gregg's Plc. has shown consistent performance with minor corrections. The overall turnover of the company has decreased in slight fractions from 3.09 to 3.07. But still keeping in view the economic crises and performance of the other major companies and competitors the performance of the company is satisfied. (Bull 2008, Pp. 21-32) The future prospects of the future growth are quite bright with an increase in the book value per share from 1.42 to 1.58. The quick ratio of the company has also increased from 0.08 to 0.51. The net current asset has improved quite significantly from -13.84 in 2008 to -4.92 in the year 2010.

Ratio Analysis

The ratio analysis involves comparisons. Different ratios of the company are calculated with the given data of the company from (financial statements and balance sheets). The ratio analysis provides in-depth and timely information to the management for critical strategic decision making (Friedlob 2003, Pp. 6-20). Different ratios are calculated in the ratio analysis which provides different aspects of the company's performance such as (EPS) earnings per share ratio.

Liquidity ratios

The quick ratio and Net current assets % TA are higher while the current ratio is slightly lower when compared to the other company.

Profitability ratios

The ROA %, ROE % (Net), ROI % (Operating), EBITDA Margin %, Calculated Tax Rate % are all higher than the competitors ratios which shows that the company has performed quite well and the decision taken by the company's management is quite valid in this context (Bull 2008, ...