Bellway Co. - Financial Analysis

Assignment 2

Section - A

Introduction

With real estate accounting for over 25% of total corporate assets, firms have in the past been insufficiently concerned because of the relation with the facility to manage the business matters and opportunities related to real estate market. Normatively, researchers and corporate real estate managers agree that positive outcomes result when managers are guided in their real estate decision process by comprehensive real estate strategies that are aligned with the overall strategies of the corporation. Overall strategies of the corporation address critical elements such as customers, employees, and processes believe firms should use eight types of real estate strategies to support their overall corporate strategies. Indeed, empirical studies show strategic corporate real estate management is becoming more common and better aligned with core business strategies and corporate real estate managers more successfully translating their real estate strategies into operating decisions

Real estate is one of these sectors that can be termed as a driving engine for the economy and it is one of those sectors that are really pivotal for the upheaval or bringing recession in the economy. So when one talks about the Real Estate Market in Australia. When one talks about the way Indians are placed in the centre of the Australian economy, it can be seen that there are many reasons that might make Indians a marketable prospect for the economy. To understand the economic relevance of the economy and the way they are placed (Zhou & Liu, 2012, 368-373). First we have to understand the basic dynamics of the economy. The company that has been chosen for study here is Bellway.

Overview of the Bellway Company

The Bellway Estate, Plc ("Bellway Company" or "RAR Property") is a limited liability Bellway Company. It is listed on the London Stock Exchange (LSE) and a constituent of the FTSE 250 Index headquartered in London, incorporated on December 30, 1946 and its main activity is the management of Thomson Group's real estate and property development, and is dedicated to promotion of quality homes, so its overall management and working capital is influenced and depends on where the Group operates (Zellars and Tepper, p.411).

Financial Analysis

Profits, earnings and dividends:

Net Profit Margin 2012= Net Profit/ Sales*100

= 188.3/ 2,590.7*100

= 6.25%

Net Profit Margin 2011= Net Profit/ Sales*100

= 157.9/ 2,389.8*100

= 6.6%

Operating Profit Margin 2012= Operating Profit/ Sales* 100

= 262.9/ 2590.7*100

= 10.14%

Operating Profit Margin 2011= Operating Profit/ Sales* 100

= 225/ 2389.8*100

= 9.41%

Return on Equity 2012 = Net Income/ Average shareholders' equity

= 188.3/ 94.45

= 1.99

Return on Equity 2011= Net Income/ Average shareholders' equity

= 157.9/ 246.2

= 0.64

Dividends

In accordance with resolutions at the General Meeting of Shareholders held on March 3, 2009 1,000,000 Euros were distributed in dividends in 2008.

Financial Stability and Liquidity

The financial stability and liquidity re defined as the ability to settle or meet obligations on time or at a reasonable price. The existence of liquidity parameters are set for the management of liquidity policies to maximize the profitability and minimize ...