IMMEDIA GROUP

Immedia Group: Investment Analysis and Advice



Immedia Group: Investment Analysis and Advice

Introduction

The Immedia Group PLC is a UK based company. The company has listings of its shares on London Stock Exchange. The group provides the services of live radio stations for British retailers. The main marketing services of the company are bespoke radio provisioning, music and visual content and audio-visual programming. The company also provides the services of installing and maintaining the associated equipment. The main customers of Immedia belong to corporate, health and well-being, food retail, fashion, banking, hair and beauty and hospitality industries (www.markets.ft.com).

In this briefing paper, I provide you the basis of investment using the financial analysis method. The paper also briefly reviews the operating and marketing performance of Immedia Group PLC., and the direction of the developmental strategies of the company. Finally, this paper provides an overall conclusion of the analyses with the recommendation as to whether this review could serve as a template for running potential business.

Financial Analysis

A detailed financial analysis of the Immedia Group Plc is provided here onwards, which encompasses various aspects of financial information. Financial ratio analysis will cover the profitability, efficiency, liquidity and the leverage of the. The financial performance that follows is evaluated and analysed from the perspective of investor. For calculation of these ratios, several formulae have been used and appended at the end of this paper. The formulae fields used have been presented in the table below:

 

2010

2009

Net Income

-48566

75238

Total Assets

1900247

2129314

Shareholders' Equity

624830

705472

Sales

3509421

3771135

Gross Profit

1884325

2048151

Total Current Assets

1376737

1629575

Total Current Liabilities

1275417

1401842

Cost of Goods Sold

1625096

1722984

Inventory

117857

79678

Total Debt / Liabilities

1275417

1423842

Number of Shares

14556844

14556844

Using the above totals of items appearing in the company's balance sheet, income statement and cash flows, ratios have been computed and presented under the following table:

 

2010

2009

Return on Assets

-0.02556

0.035334

Return on Equity

-0.07773

0.106649

Gross Profit Margin

0.536933

0.543113

Current Ratio

1.079441

1.162453

Quick Ratio

0.987034

1.105615

Inventory Turnover

13.78871

21.62434

Total Assets Turnover

1.846824

1.771056

Debt Ratio

0.671185

0.668686

Equity Ratio

0.328815

0.331314

Book Value Per Share

0.042923

0.048463

Earnings Per Share

-0.00334

0.005169

Profitability Ratios

Profitability ratios explain the performance of an organization in terms of the profit it earns. They include return on assets, return on equity, profit margin and gross margin.

Comments

The profitability of Immedia Group is unsatisfactory as the trends of the company from 2009 to 2010 shows that the company has been performing poor during 2009-2010. This statement can be endorsed by the evaluation of the profitability ratios. The return on assets of Immedia Group from 2009 to 2010 fell from 0.03 (2009) to -0.02 (2010). In addition to this, return on equity shows decline over the 2 years. As the return on equity was 0.106, or 10.6% in 2009, and negative 7% in 2010. In addition to this, return on investment and operating profit margin is also showing the decrease in the profitability structure of Immedia Group. The over all performance of the company is not satisfactory (www.mergentonline.com).

Liquidity Ratios

Liquidity ratios enable the organizational management to analyze their position to meet the day-to-day requirements of the organization and to pay off its short-term debts. These include current ratio and quick ratio.

Comments

The liquidity ratios that include current ratio and quick ratio increased from 2009 to ...