Financial Report Comparing and Contrasting of these 2 companies:
Avingtrans plc – 2020 latest Annual Report
Flowtech Fluid Power plc – 2019 latest Annual Report
Report on the financial ratios of two reputable Engineering companies’ financial data operating within the same
industry. The report will analyze and appraise the financial position of the companies and make
recommendations for investment decisions based on financial ratio analysis.
This will be based around the Annual Report and accounts of the companies, but it always helps to research
news items and press releases for up to date issues.
The structure:
Background: For the 2 companies:
Key points from the Chairman’s Directors’ Reports, Positive or negative; New markets ?; Acquisitions; Headline
profitability this year/last year; Headline share price this year/last year; The macroeconomic background and
how it affects the companies.
Ratio Analysis & interpretations:
Profitability and Return on Capital; Liquidity and Working Capital
Long Term Solvency; Shareholders and Investment Ratios
The Synthesis:
The cumulative impact of the ratios; Pulling the ratios together – how do you think the management are doing ?
These are challenging times – do you think the companies could do better – if so why and what should they
target in terms of key ratios to improve ? Profitability/Liquidity/Solvency/Investors
The Conclusion:
Thinking as an investor – which company would you prefer to put your money into and why ?
How much would you invest ?
Specific challenges/opportunities for the companies
Remember the ratios you have calculated are historic – but maybe they can give an indication for the future
Sample Solution