Analyzing the Performance of Benedon Limited Company Essay -- Benedon

Analyzing the Performance of Benedon Limited Company I am writing a report to analyse the performance of Benedon Limited Company and to compare with the industry as a whole. The report analyses company and industry performance over the three years up to at end of 20X3. â€Å"It enables us to discover favourable or unfavourable trends that are developing gradually over time, as well as pointing up any numbers that have changed sharply in the space of time of just one year.† (Sytsma, S.) This report reviews the findings of the major changes and the awareness of weak performances. However, there are five principal types of ratios which are profitability ratios, liquidity ratios, activity ratios, solvency ratios and investment ratios. Under profitability, competitive pressure has risen in 20X3 compared to 20X1 and 20X2 as a result of Return on Capital Employed (ROCE) fell in year 20X3 from 19% to 14.7%, however, the ROCE in the year 20X3 is better than year 20X1 which had 13.2%. Gross margin (GM) could not be increased and falls substantially throughout the years as percentage of sales from 43.8% to 36.6% even though distribution and administration expenses have lowered every year. Therefore, it could not reflect the operating margin (OM) which has decreased in year 20X3. The average operating margin figures of Industrial Average (IA) and in year 20X2 were 16.0% but there is only 13% in year 20X3. In addition, ROCE in year 20X3 is much lower than the Industri...