Financial Reporting and Analysis - Dart Group Plc Essay

7420 Words Jan 10th, 2014 30 Pages
Dart Group Plc

Dart Group Plc

A Financial Analysis

Student ID – A4042738

Student Name – Chitra Naraindas Relwani

Module Code - FRA

Intake - 10

Programme - MSc Finance

Assignment Type - Individual Assignment

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Chitra Naraindas Relwani – A4042738

Dart Group Plc

Table of Content
Title Company Overview – Descriptive overview Strategies DuPont Analysis Comparison Ratio Analysis 6 Page number 2

Company Valuation and 8 LBO Resisting Takeovers Encouraging Sale Forecasting Negative Equity Reference Appendix 1-4 11 15 18 20 22 25

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Chitra Naraindas Relwani – A4042738

Dart Group Plc

Company Overview Dart Group Plc is a publically traded company listed on AIM rather than the main
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Increase the number of destinations for leisure holidays and holiday packages. Increase the range of customers to who charter flights is offered in order to maximise aircraft and crew utilisation. Grow the distributions business inorganically by acquisitions if “sensibly priced opportunities” arise (Dart Group website). DuPont analysis – DuPont analysis is a succinct way of looking at the interrelationship between various ratios and how one factor can affect the others. ROA = Net Profit Margin * Total Asset Turnover Ratio Decomposing this formula we get: Net Profit/Average total Assets = (Net Profit/Net Sales) * (Net Sales/Average total Assets) Thus if we look at the year end March 2011 figures for DuPont analysis (the average total assets are figures excluding goodwill): 17.3/(463.3+332.4)/2 = 17.3/542.9 * 542.9/(463.3+332.4)/2

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Chitra Naraindas Relwani – A4042738

Dart Group Plc


The above chart shows that the DuPont analysis of ROA will take into account every important component of the balance sheet and income statement. It shows the relationship between, for example, the operating expenses and the ROA. In the case of Dart Group, the operating expense is about 90% or more and this will have an adverse affect on the ROA. Any improvement in operating cost management will indirectly improve the ROA.

Based on the chart of the break up

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