RATIO ANALYSIS

Financial Ratio Analysis of Halfords PLC

Table of Contents

Financial Ratio Analysis of Halfords PLC1

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Financial Ratio Analysis of Halfords PLC2

Introduction2

Ratio Analysis Calculation2

Profitability Ratios2

Efficiency Ratios3

Short Term Liquidity Ratio5

Long Term Solvency5

Investor Ratios6

Ratio Analysis Interpretation7

Profitability Ratio7

Efficiency Ratio8

Short Term Liquidity Ratio9

Long Term Solvency10

Investment Ratios:10

Comparison of Ratios with Chairman's Statement11

Comparison of Ratios with Share Price Fluctuation12

Conclusion12

References13

Financial Ratio Analysis of Halfords PLC

Introduction

Halfords Group plc is one of the largest retailers of car parts, car accessories, camping and touring equipment, bicycles parts in the United Kingdom and Ireland. Recently company is expanding its branches in European countries, but due to uncertain economic conditions company decided to halt its expansion plans. Halfords Group is listed on the FTSE 250 index on London Stock Exchange. Currently it has 12,000 employees as per the annual report of 2012.the company operates around 462 stores around the global with the annual revenue of 870 million, and few years back it had opened its first branch in Poland. After UK the Ireland is the main market for Halfords revenue and for Ireland market Halfords recently launched a website, from where customer can order their car part and reserve item online. Apart from its retail business, Halfords has its own MOT testing and car repairing centre, the company currently own around 250 auto centre both in UK and Ireland.

Ratio Analysis Calculation

Profitability Ratios

Return on Capital Employed

ROCE = {Operating Profit / (Total Equity + Total Non-Current Liability)} * 100%

Value in 2012 = {99m / (287m + 182m)} = 21.10%

Value in 2011 = {121m / (322m + 134m)} = 26.53%

Return on Equity

ROE = (Net Profit after Tax / Total Equity) * 100%

Value in 2012 = (68m / 287m) * 100 = 22.69%

Value in 2011 = (86m / 322m) * 100 = 26.70%

Operating Profit Margin

GPM = (Operating Profit / Sales) * 100%

Value in 2012 = (99m / 863m) * 100% = 11.47%

Value in 2011 = (121m / 870m) * 100% = 13.90%

Gross Profit Margin

GPM = (Gross Profit / Sales) * 100%

Value in 2012 = (473m / 863m) * 100% = 54.80%

Value in 2011 = (485m / 870m) * 100% = 55.74%

Net Profit Margin

Net Profit Margin = (Net Profit / Sales) * 100%

Value in 2012 = (68m / 863m) * 100% = 7.87%

Value in 2011 = (86m / 870m) * 100% = 9.88%

Efficiency Ratios

Fixed Asset Turnover

Fixed Asset Turnover = Sales / Property, Plant and Equipment

Value in 2012 = 863m / 98m = 8.80 times

Value in 2011 = 870m / 103m = 8.44 times

Current Asset Turnover

Current Asset Turnover = Sales / Total Current Assets

Value in 2012 = 863m / 205m = 4.20 times

Value in 2011 = 870m / 193m = 4.50 times

Total Asset Turnover

Total Asset Turnover = Sales / Total Assets

Value in 2012 = 863m / 647m = 1.33 times

Value in 2011 = 870m / 642m = 1.35 times

Working Capital Ratio

Working Capital = Current Assets / Current Liabilities

Value in 2012 = 205m / 178m = 1.15 times

Value in 2011 = 193m / 186m = 1.03 times

Days Receivables

Days Receivable = (Trade Receivables / Sales) * 365 days

Value in 2012 = (16m / 863m) ...