Balance Sheet and Annual Report Essay

7555 Words Dec 24th, 2012 31 Pages
This report will analyse Greggs’ 2010 annual report on the purpose of evaluating the company’s current operating condition and providing suggestions of improvement to the company’s management team. According to ASB'S Statement of Principles for Financial Reporting, the selected information will be provided to the following users: shareholders, loan creditor group, analyst-adviser group, employees, customers, suppliers, government and the public. Then, based on the key ratio calculations, the company’s financial performance is to be evaluated from two parts: profitability analysis and liquidity analysis. For the profitability analysis, the profitability ratios go up. It is mainly because the sale increases through adding the
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• “Operating margin increased by 0.5 per cent compared with that in 2009” (Annual Report and Accounts 2010, 2010; p8)

• As the first full year for implementing the new central structure, accounts for 2010 show a good result of £1.4 million savings. (Annual Report and Accounts 2010, 2010; p9)

• Increased revenue was spend on both the business growth and returns to shareholders. (Annual Report and Accounts 2010, 2010; p6)

Information above clearly shows the amount of revenue this year, as well as the increase in percent comparing with 2009. Meanwhile, it gives a true and fair view by showing the slow down growth due to the bad weather. Moreover, it also lists three detailed improvements which lead to the optimal revenue in 2010. Therefore, the account fulfils shareholders’ needs in terms of revenue.

1.1.3 Future

As well as the past, shareholders will be interested in the Greggs’ future. There are three aspects to be discussed: directors’ plan to the future, sufficient supplies and future economic environment.

1) Directors’ plan to the future

Are there any further improvements to generate more cash? How will the directors react to the challenges? Is the company still well-worth to invest? These areas will be viewed when considering longer-term prospects. (Holmes, Geoffrey and Gee, 1926).

• “The total capital expenditure in 2010 was £45.6 million (2009: £30.3 million) reflecting the accelerated rate of new shop

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