FINANCIAL ANALYSIS

Meggitt Public Limited Company

Meggitt Public Limited Company

Introduction

Meggitt is a British public limited company that is involved in the operations of a successful engineering group dealing in specialized aerospace equipments. In the eary period, company was known as Wilson Lathes. It was formed in the year 1940 as a machine tool. After seven years of its inception, the company got listed in the Stock Exchange in the year, 1947. The company then formally changed its name from Wilson Lathes to Meggitt after the acquisition of a Dorset based engineering group known as Meggitt. The company has its headquearters located in Bournemouth Airport, Hampshire, United Kingdom. Meggitt is known as one of the leading companies in the aerospace, electronic products and defense industry. The company is also listed on the London Stock Exchange (Meggitt). At present, there are more than 10,000 employees working in the different regions (Asia, North America, Europe and regional basis of India, Brazil, and Middle East) of the company.

The civil aerospace operations of Meggitt deals in the business planes, helicopters, general aviation and jets while its section of defense incorporates radar systems, Military aircrafts, maritime systems, marine risk safety oriented supplies and other relevant things. Besides it the organization additionally produces water infusion systems, airplane instruments, warm exchangers, warm indicators, smoke identifiers, aerial target systems and surveillance drones. Meggitt is promoting and offering its product worldwide.

Calculations and Interpretations

Divident paid in last five years:

2012 - 0.4

2011 - 0.2

2010 - N/A

2009- N/A

2008- N/A

Current Share Price: 506.50

(As on Nov 19th march 2013 listed on London Stock Exchange)

• Current Market Capitalisation: 3.98B

(Source: London Stock Exchange)

• Equity Beta Value: N/A

(Source: Yahoo Finance)

1] ROCE (Return on capital employed) Ratio:

The ROCE is used to calculate that how much a company can gain from its assets and how much it can lose from its liabilities.

Capital Employed = Total Assets-Current Liablities

2012= 3,885-1979= 1906

2011= 3986-2193= 1793

ROCE = (Operating Profit)/(Capital Employed)×100

2012 = 324/1905×100= 17.07%

2011 = 263/1793×100= 14.67%

The ROCE of the Company was better in the year 2012. This means that the Company was able to make a better use of their Capital Employed in order to incur an appropriate amount of revenues. The ROCE was lower in the year 2011. This means that the company had an improvement in this regard.

2] Current Ratio = (Current Assets)/(Current Liablities)

2012= 706/588= 1.20

2011= 696/470= 1.48

“This ratio is used to measure the company's ability to pay back its short-term liabilities like debt and payables with its short-term assets like cash, inventory and receivables.”In the case of Meggit PLC, in the year 2012, the company is likely to pay its short-term debts and is lower as compared to that in year 2011. It can be said that the company's financial health is good and growing as compared to the previous year.

3] Gearing Ratio = (Long Term Debt (Non-current Liablities))/(Capital Employed)×100%

2012= 617/1905×100= 32.39%

2011= 975/1793×100= 54.38%

Gearing ratio decreased to a certain percentage over the past one ...