Essay on Analysis of Financial Performance of Pz Cussons 2012

3337 Words Mar 29th, 2013 14 Pages
ANALYSIS OF THE FINANCIAL PERFORMANCE OF PZ CUSSONS PLC AND
RESEARCH MATRIX

Background Information of the Company

PZ Cussons Plc. is a UK based consumer products group. The principal activities of the group are the manufacture and distribution of soaps, detergents, toiletries, beauty products, pharmaceuticals, edible oils, fats, electrical goods and nutritional products. The company’s products can therefore be categorised into personal care, home care, baby care, beauty products, food and nutrition and electrical goods. They have supply chain and distribution networks in Africa, Asia and Europe. Their mission is to enhance the lives of customers with quality, value and innovation. Their vision is to be a growing and dynamic company
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It could be said these are one-off items which impacted on overheads and resulted in a reduced operating profit for the year but the group will need to improve its margins and control overheads to enhance its profitability.

Liquidity Ratios
These ratios measure the ability of a company to meet its short term obligations as they fall due (Ready Ratios, 2012). 2012 2011

Current Ratio 393.3 = 1.22 417.4 = 1.46
(Current Assets/Current Liabilities) 322.4 285.6

Current Ratio excluding current debt 393.3 = 1.70 417.4 = 1.65 322.4 - 90.8 285.6- 32.5

Acid Test/ Quick Ratio 393.3 – 173.6 = 0.68 417.4 – 151.7 = 0.93
(CA – Inventories/ CL) 322.4 285.6

Acid test excluding current debt 393.3 – 173.6 = 0.95 417.4 – 151.7 = 1.05 322.4 – 90.8 285.6 – 32.5

The current ratio has fallen from 1.46 to 1.22

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