TABLE OF CONTENTS | |
Introduction _____________________________________________ | 3 |
Company Overview_______________________________________ | 3 |
Financial Ratio Analysis____________________________________ | 4 |
1. Liquidity Ratios________________________________________ | 5 |
1.1 Current Ratio_______________________________________ | 5 |
1.2 Quick Ratio_________________________________________ | 6 |
1.3 Working Capital_____________________________________ | 7 |
2. Profitability Ratios______________________________________ | 8 |
2.1 Gross Profit Ratio____________________________________ | 8 |
2.2 Net Profit ...view middle of the document...
This report also aims to analyze the competitive advantage PZ Cussons Plc may or may not have with its competitor Proctor and Gamble. Proctor and Gamble’s financial performance for 2012 will be analyzed and compared with that of PZ Cussons Plc.
Financial ratio analyses are tools to measure a company’s efficiency, effectiveness and ability to optimally utilize the available resources to generate desired revenue and also to plan and control the company’s business activities.
Financial ratio also facilitates investors and lenders to make a sound decision about the company’s health, future growth and sustainability before making any investments or lending’s.
PZ Cussons Plc formerly known as Paterson Zochonis, was founded in 1879 by George Henry Paterson and George Zochonis. PZ Cussons Plc started operation as a large trading house importing goods from West Africa and distributing it into Europe.
PZ Cussons Plc. emerged as one of the largest soap manufacturing businesses in the United Kingdom having operations and manufacturing in Africa, Asia and rest of Europe dealing with consumer goods and personal health care products.
PZ Cussons has a strong presence in Africa and Europe where they manufacture and distribute their foremost product line which includes Home Care products like Carex, Morning fresh, Zip; Personal Care products like Imperial Leather, ROBB, Venus; Beauty products like The Sanctuary, St. Tropez, Charles Worthington; Food and Nutrition products like Nunu, Yo!, Bliss; Electrical products like Haier Thermocool.
In the global competitive world of fast moveable consumer goods PZ Cussons is second to none and competes with market leader like Proctor and Gamble, Unilever and Reckitt Benckiser and many others.
In order to assess PZ Cussons competitive performances, strengths and weakness, its financial ratio analysis will be compared and evaluated with a company in the similar trade or industry. For the purpose of comparison and benchmarking PZ Cussons financial ratio performances will be compared with that of its competitor Proctor and Gamble, who have been in the trade for several years.
Financial Ratio Analysis
Financial ratios are used to evaluate the overall financial condition of an organization or compare a companies’ financial position with another organization within the same trade or as a benchmark.
In order to analysis the financial performance of PZ Cussons Plc. and compare its strengths and weaknesses to its competitor Proctor and Gamble, it is suggested to understand and use the information available from their financial statements to work out different financial ratios to compare and analyze individual company’s performances.
PZ Cussons Plc, ratio analysis includes the financial information for the fiscal years of 2011 and 2012 which will be compared and analyzed with Proctor and Gamble financial ratios for fiscal year 2012; this is to evaluate their competitive performances.