FINANCIAL ANALYSIS

Financial Analysis

Financial Analysis

Introduction

The Analysis of financial statements is the use of analytical tools and methods to the performance of financial instruments in order to identify significant relationships and characteristics required for any decision. Above all, the analysis of financial statements can rely less on guesses, hunches and intuition, to reduce the inevitable uncertainty that exists in any decision-making process.  At the most fundamental level, management's primary objectives are the continued development of the Burberry brand and delivering sustained, profitable growth over the long term. Although the global recession of 2008-2009 slowed progress in some respects, they did not compromise pursuit of either objective. With an improving external environment in 2010/11, the team capitalized on the expertise and infrastructure developed during preceding years and the Group's strong financial position to accelerate investment in the brand and reassert the strategic growth agenda.

Shareholders

Shareholders participate in the management of the company in the first place by voting at a general meeting of shareholders. Act establishes a list of questions that can be solved only by the general meeting of shareholders. Such questions can be divided into several groups. It should be noted that the law allows us to define the charter and other issues that fall within the exclusive competence of the general meeting of shareholders. The ratios of their interest are as follows:

Ratios

2011

2012

TTM

Earnings Per Share GBP

0.94

1.18

1.18

Dividends GBP

0.3

0.42

0.42

Payout Ratio %

31.2

35.7

35.7

Book Value Per Share GBP

5.4

6.54

6.38

The shareholders would be interest in these ratios because they want to know and predict the future performance of their investment in this business. In order to do that, they would be looking into these particular ratios. The performance of these ratios is analyzed as follows:

Earnings per Share

If we look at the performance of this ratio, we will come to know that last year it was 0.94 and this year it is 1.18, which shows a overall growth of 26%. However the importance of this ratio is only in numbers, this basically indicates the amount earned by the investor per share of Burberry

Payout Ratio %

If we look at the performance of this ratio, we will come to know that last year it was 5.4 and this year it is 6.54, which shows an overall growth of 14%. However the importance of this ratio is only in numbers, this basically indicates the amount which was paid in dividends by the company.

Book Value per Share

If we look at the performance of this ratio, we will come to know that last year it was 31.2 and this year it is 35.7, which shows an overall growth of 21%. However the importance of this ratio is only in numbers, this basically indicates the value of each share in accordance with their book value. This will allows the shareholders to forecast their capital gain from trading these shares.

Lenders

A significant number of business owners believe that getting a loan to finance your business is relatively easy and fast, thanks to banking policies designed to assist local businesses owned by "minorities". This is true, to some ...