Financial STATEMENT of Next PLC Company

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timer Asked: Mar 1st, 2018
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Question description

Please read the attached file "Seminar Materials and Instructions for the Case Study. You can find the details from Internet about NEXT PLC and do as per the Instruction attached file down. i will also attach a sample but you must go done through your self.

YOU CAN COLLECT THE DATA FROM THE INTERNET ABOUT Next PLC company and follow same as the contents mention below

3000 words and importantly separate EXCEL Sheet mention financial statement related to balance sheet, asset and liability account cash flow account and etc which is given in the instructions. in case of any question feel free to message me. thanks
Attached Files

Excel Financial Statement

Instruction in PDP
Sample Attached of SAGE excel Sheet and Theory

Contents

1. EXECUTIVE SUMMARY

2. INTRODUCTION

3. STRATEGIC CAPABILITIES AND OVERVIEW OF MANAGEMENT

3.1 STRATEGIC CAPABILITIES

3.1.1 General

3.1.2 Sales and Profitability

3.1.3 Expansion Plans and Investments

3.1.4 Other Strategies and Actions/ Plans

3.1.5 SWOT Analysis

3.2 OVERVIEW OF GROUP

4. CASH FLOW ANALYSIS

4.1.1 Cash flow generated from operating activities

4.1.2 Cash flow used in investing activities

4.1.3 Cash flow used in financing activities

5. CAPITAL STRUCTURE

6. PERFORMANCE ANALYSIS

7. PROSPECT S OF GROUP IN RELATED MARKET SECTOR

8. 2015 FORECAST OF TURNOVER AND EARNINGS PER SHARE

9. SHARE PRICE PERFORMANCE OF THE COMPANY

10. RECOMMENDATIONS

11. LIST OF REFERENCES

12. APPENDICES


1. A discussion of the strategic capabilities of the company and of the quality of the company management. 2. An analysis of company cash flow. 3. An evaluation of the company’s capital structure (gearing and share ownership). 4. An analysis of company performance, using accounting and other ratios. 5. A discussion of the prospects of the firm in the context of the stock market sector within which it operates. 6. A reasoned forecast of turnover and earnings per share for the full year to the end of the accounting period finishing in 2018. You may wish to include forecasts for additional years to aid your valuation. 7. An absolute valuation of the company and justification of assumptions based upon your analysis in (1) through (6) above. 8. A comment on the share price performance of the company and a discussion of whether the share is likely to outperform the sector and the market over the next twelve months, including a recommendation on whether you consider the share to be a ‘BUY’, ‘HOLD’ or ‘SELL’. Useful sources of information may, among others, include but are not limited to:

o overview of company o share price and price relative graphs o key accounting ratios for the company and competitors in the sector

Next PLC Leicester, LE19 4AT (England) Registered no 04412362 Status Active Registered Office Phone number 0844 - 844 8888 Desford Road Website www.nextplc.co.uk Publicly quoted This company is the GUO of the Corporate Group Contact details Enderby Leicester Leicestershire LE19 4AT England Latitude longitude 52° 35' 59.6" N 1° 13' 45.7" W Legal & accounts information Last change of name : 11/22/2002 Previous name(s) until : 22/11/2002 NEXT GROUP PLC 11/09/2002 BRONZEJASPER PUBLIC LIMITED COMPANY Status Active Legal form Public, Quoted Registered accounts type Interim Date of incorporation 4/9/2002 Accounting reference date 31/01 BvD indep. indicator A+ Latest accounts date 1/28/2017 VAT number GB179765890 No of available years 10 Op. Revenue (Turnover) 4,097,300 th GBP No of companies in corporate group 44 P/L for Period (Net Income) 635,300 th GBP Total Assets 2,341,900 th GBP No of Employees 49,033 Market cap. (22/02/2018) 7,105,542 th GBP Size & main activity No of recorded shareholders 98 No of recorded subsidiaries 45 SME indicator No Trade description Retailer offering exciting, beautifully designed, excellent quality clothing, footwear, accessories and home products. Primary UK SIC 46420 - Wholesale of clothing and footwear Key financials & Employees Turnover Profit (Loss) before Taxation Net Tangible Assets (Liab.) Shareholders Funds 28/01/2017 30/01/2016 24/01/2015 25/01/2014 26/01/2013 th GBP th GBP th GBP th GBP th GBP 28/01/2012 th GBP 12 months 12 months 12 months 12 months 12 months 12 months Cons. Cons. Cons. Cons. Cons. Cons. Unqualified Unqualified Unqualified Unqualified Unqualified Unqualified IFRS IFRS IFRS IFRS IFRS IFRS 4.097.300 4.176.900 3.999.800 3.740.000 3.562.800 3.441.100 790.200 836.100 794.800 695.200 666.500 579.500 1.573.600 1.069.800 1.313.800 1.195.400 967.200 1.031.100 510.500 311.800 322.000 286.300 285.700 222.700 Profit Margin Return on Shareholders Funds Return on Capital Employed Liquidity Ratio (x) 19,29 20,02 19,87 18,59 18,71 16,84 154,79 268,15 246,83 242,82 233,29 260,22 48,87 75,09 58,54 56,07 65,86 53,82 1,67 0,99 1,35 1,30 1,07 1,03 Gearing (%) 229,89 366,93 322,58 333,99 286,80 386,93 Number of Employees 49.033 51.179 50.018 28.568 28.301 32.163 28/01/2017 30/01/2016 24/01/2015 25/01/2014 26/01/2013 28/01/2012 th GBP th GBP th GBP th GBP th GBP th GBP 12 months 12 months 12 months 12 months 12 months 12 months Cons. Cons. Cons. Cons. Cons. Cons. Unqualified Unqualified Unqualified Unqualified Unqualified Unqualified IFRS IFRS IFRS IFRS IFRS IFRS 578.600 536.400 503.300 509.200 537.300 581.900 Land & Buildings 78.000 77.200 74.800 73.000 68.400 72.200 Freehold Land 70.200 69.400 67.000 65.000 61.500 65.300 7.800 7.800 7.800 8.000 6.900 6.900 Balance sheet Fixed Assets Tangible Assets Leasehold Land Fixtures & Fittings Plant & Vehicles Plant Vehicles 500.600 459.200 428.500 436.200 468.900 509.700 Intangible Assets Other Fixed Assets 43.300 43.700 44.000 44.400 44.800 45.600 Investments 59.400 61.800 81.100 52.600 38.100 51.700 681.300 641.900 628.400 606.200 620.200 679.200 451.100 486.500 416.800 385.600 331.800 371.900 385.600 331.800 Fixed Assets Current Assets Stock & W.I.P. Stock W.I.P. Finished Goods Trade Debtors 1.001.800 931.600 712.500 703.600 601.200 49.700 66.300 275.500 273.300 136.300 56.400 124.000 118.900 131.800 104.400 116.900 102.100 400 700 800 1.000 800 1.200 Other Debtors 31.900 22.500 41.100 9.400 29.300 10.400 Prepayments 91.700 95.700 89.900 94.000 86.800 90.500 34.000 38.900 79.400 1.200 21.600 12.500 1.660.600 1.642.200 1.616.000 1.468.100 1.207.800 1.139.900 -186.100 -219.000 -224.900 -194.800 -189.200 -193.100 -67.200 -342.400 -2.900 -2.700 -93.100 -7.700 -35.300 -128.600 -2.800 -2.600 -93.000 -7.600 -100 -100 -100 -100 -100 -100 -100 -100 Bank & Deposits Other Current Assets Group Loans (asset) 597.000 Directors Loans (asset) Deferred Taxation Investments Current Assets Current Liabilities Trade Creditors Short Term Loans & Overdrafts Bank Overdrafts Group Loans (short t.) Director Loans (short t.) Hire Purch. & Leas. (short t.) -31.900 Hire Purchase (short t.) Leasing (short t.) -31.900 Other Short Term Loans Total Other Current Liabilities Corporation Tax -213.800 -471.700 -609.200 -658.800 -637.000 -533.700 -541.600 -70.700 -65.100 -64.000 -79.700 -98.300 -102.800 Dividends Accruals & Def. Inc. (short t.) -77.300 -74.000 -73.700 -69.000 -65.700 Social Securities & V.A.T. -62.500 -76.800 -83.900 -75.100 -64.000 -61.600 -261.200 -393.300 -437.200 -413.200 -305.700 -377.200 -725.000 -1.170.600 -886.600 -834.500 -816.000 -742.400 Other Current Liabilities Current Liabilities Net Current Assets (Working Capital) 935.600 471.600 729.400 633.600 391.800 397.500 Net Tangible Assets (Liab.) 1.573.600 1.069.800 1.313.800 1.195.400 967.200 1.031.100 Working Capital needs 1.266.800 1.199.100 904.400 894.400 743.800 775.800 Total Assets 2.341.900 2.284.100 2.244.400 2.074.300 1.828.000 1.819.100 Total Assets less Cur. Liab. 1.616.900 1.113.500 1.357.800 1.239.800 1.012.000 1.076.700 -1.126.400 -615.000 -838.200 -801.000 -567.100 -663.100 -212.900 -200 -300 -400 -212.900 -200 -300 -400 Long Term Liabilities Long Term Debt Group Loans (long t.) Director Loans (long t.) Hire Purch. & Leas. (long t.) Hire Purchase (long t.) Leasing (long t.) Preference Shares Other Long Term Loans -913.500 -615.000 -838.200 -800.800 -566.800 -662.700 -30.500 -225.400 -226.200 -214.400 -209.700 -198.600 Other Long Term Liab. -30.500 -225.400 -226.200 -214.400 -209.700 -198.600 Provisions for Other Liab. -12.400 -7.300 -9.400 -8.500 -15.200 -27.400 -4.000 -15.400 Total Other Long Term Liab. Accruals & Def. Inc. (long t.) Deferred Tax -5.700 Other Provisions -6.700 -7.300 -9.400 -8.500 -11.200 -12.000 Pension Liabilities 62.900 46.000 37.900 70.300 65.600 35.100 100 100 100 Balance sheet Minorities Long Term Liabilities Net assets -1.106.400 -801.700 -1.035.800 -953.500 -726.300 -854.000 510.500 311.800 322.000 286.300 285.700 222.700 14.700 15.100 15.300 15.500 16.100 16.900 495.800 296.700 306.700 270.800 269.600 205.800 900 900 900 900 900 800 Shareholders Funds Issued Capital Ordinary Shares Preference Shares Other Shares Total Reserves Share Premium Account Revaluation Reserves Profit (Loss) Account Other Reserves Shareholders Funds 2.117.200 1.908.900 1.885.600 1.906.900 1.904.000 1.763.400 -1.622.300 -1.613.100 -1.579.800 -1.637.000 -1.635.300 -1.558.400 510.500 311.800 322.000 286.300 285.700 222.700 28/01/2017 30/01/2016 24/01/2015 25/01/2014 26/01/2013 28/01/2012 Profit & Loss account Turnover National Turnover Overseas Turnover Cost of Sales th GBP th GBP th GBP th GBP th GBP th GBP 12 months 12 months 12 months 12 months 12 months 12 months Cons. Cons. Cons. Cons. Cons. Cons. Unqualified Unqualified Unqualified Unqualified Unqualified Unqualified IFRS IFRS IFRS IFRS IFRS IFRS 4.097.300 4.176.900 3.999.800 3.740.000 3.562.800 3.441.100 3.713.500 3.781.900 3.648.000 3.447.000 3.319.300 3.245.700 383.800 395.000 351.800 293.000 243.500 195.400 -2.710.700 -2.724.200 -2.656.400 -2.499.900 -2.437.000 -2.395.800 Exceptional Items pre GP Other Income pre GP Gross Profit Administration Expenses Other Operating Income/Costs pre OP 1.386.600 1.452.700 1.343.400 1.240.100 1.125.800 1.045.300 -560.000 -586.500 -541.100 -519.800 -470.500 -448.100 1.100 1.000 9.800 2.500 4.000 1.500 35.800 3.100 Exceptional Items pre OP Operating Profit 827.700 867.200 812.100 722.800 695.100 601.800 300 500 800 700 400 13.900 Other Income Total Other Income & Int. Received Exceptional Items 12.600 Profit (Loss) on Sale of Operations Costs of Reorganisation Profit (Loss) on Disposal Other Exceptional Items Profit (Loss) before Interest paid Interest Received Interest Paid 828.000 867.700 825.500 723.500 695.500 615.700 300 500 800 700 400 13.900 -37.800 -31.600 -30.700 -28.300 -29.000 -36.200 Paid to Bank -25.200 Paid on Hire Purchase Paid on Leasing -37.800 -31.600 -30.700 -28.300 -29.000 Net Interest Other Interest Paid -37.500 -31.100 -29.900 -27.600 -28.600 -22.300 Profit (Loss) before Tax 790.200 836.100 794.800 695.200 666.500 579.500 -154.900 -169.300 -159.900 -142.000 -157.900 -145.300 635.300 666.800 634.900 553.200 508.600 434.200 Taxation Profit (Loss) after Tax Extraordinary Items -11.000 40.600 Minority Interests 100 100 635.300 666.800 634.900 553.200 508.700 474.900 -225.800 -260.000 -433.900 -238.900 -147.700 -135.100 Retained Profit(Loss) 409.500 406.800 201.000 314.300 361.000 339.800 Depreciation 117.500 116.700 114.300 119.900 118.200 120.200 114.300 112.600 111.900 116.900 116.300 118.600 100 100 100 200 3.200 4.100 2.300 2.900 1.800 1.400 Audit Fee 598 536 491 472 448 454 Non-Audit Fee 189 43 77 119 27 104 30 21 35 6 9 57 159 22 42 113 18 47 400 300 500 400 800 900 400 300 400 400 800 900 225.600 214.600 212.700 205.600 202.300 202.100 1.400 600 6.800 3.400 1.100 665.400 680.700 646.100 626.500 584.000 616.000 594.600 600.600 563.100 531.900 510.100 536.900 Social Security Costs 39.500 37.900 36.500 36.000 32.700 37.200 Pension Costs 20.500 21.100 17.700 16.000 Other Staff Costs 10.800 21.100 28.800 42.600 41.200 35.800 4.412 9.733 13.713 21.322 17.605 4.492 1.950 2.159 2.140 2.471 2.315 2.495 Profit (Loss) for Period Dividends Depreciation Owned Assets Depreciation Other Assets Impairment Tangibles Tax Advice Non-Tax Advisory Services Other Auditors Services Non-Audit Fees paid to Other Auditors Total Amortization and Impairment Amortisation Impairment Total Operating Lease Rentals 100 Hire of Plant & Machinery Land & Building or Property Rents & Other Research & Development Foreign Exchange Gains/Losses Remuneration Wages & Salaries Directors' Remuneration Directors' Fees Pension Contribution Other Emoluments 6.100 349 197 140 300 500 36 2.113 7.377 11.433 18.551 14.790 1.961 Highest Paid Director 1.842 4.764 4.660 6.559 5.428 1.486 945.600 984.200 926.900 843.100 814.100 722.900 49.033 51.179 50.018 28.568 28.301 32.163 28/01/2017 30/01/2016 24/01/2015 25/01/2014 26/01/2013 28/01/2012 th GBP th GBP th GBP th GBP th GBP th GBP 12 months 12 months 12 months 12 months 12 months 12 months Cons. Cons. Cons. Cons. Cons. Cons. Unqualified Unqualified Unqualified Unqualified Unqualified Unqualified IFRS IFRS IFRS IFRS IFRS IFRS Net Cash In(Out)flow Operat. Activ. 850.400 761.300 894.900 766.800 806.700 669.800 Net Cash In(Out)flow Ret. on Invest. -31.400 -30.200 -27.900 -21.000 -21.800 -18.900 Taxation -150.900 -153.000 -152.600 -152.000 -147.700 -143.900 Net Cash Out(In)flow Investing Activ. -154.300 -139.300 -106.000 -102.600 -85.700 -70.200 -314.100 -567.500 -434.400 -164.800 -147.700 -135.100 -238.900 -91.500 -172.900 -186.000 -321.600 -292.100 -39.200 -220.200 1.100 140.400 82.200 9.600 28/01/2017 30/01/2016 24/01/2015 25/01/2014 26/01/2013 28/01/2012 GBP GBP GBP GBP GBP GBP 154,79 268,15 246,83 242,82 233,29 260,22 Return on Capital Employed (%) 48,87 75,09 58,54 56,07 65,86 53,82 Return on Total Assets (%) 33,74 36,61 35,41 33,51 36,46 31,86 Profit margin (%) 19,29 20,02 19,87 18,59 18,71 16,84 Gross margin (%) 33,84 34,78 33,59 33,16 31,60 30,38 2,48 2,48 2,50 2,39 2,60 2,35 EBIT margin (%) 20,20 20,76 20,30 19,33 19,51 17,49 EBITDA margin (%) 23,08 23,56 23,17 22,54 22,85 21,01 2,53 3,75 2,95 3,02 3,52 3,20 EBITDA Number of Employees Cash Flow statement Capital Expenditure & Financ. Invest. Acquisition & Disposal Equity Dividends Paid Management of Liquid Resources Net Cash Out(In)flow from Financing Increase(Decrease) Cash & Equiv. Ratios Profitability ratios Return on Shareholders Funds (%) Berry ratio (x) Operational ratios Net Assets Turnover (x) Fixed Assets Turnover (x) Interest Cover (x) Stock Turnover (x) Debtors Turnover (x) 6,01 6,51 6,37 6,17 5,74 5,07 21,90 27,46 26,89 25,57 23,98 17,01 9,08 8,59 9,60 9,70 10,74 9,25 4,09 4,48 5,61 5,32 5,93 5,76 Debtor Collection (days) 89,24 81,41 65,02 68,67 61,59 63,32 Creditors Payment (days) 16,58 19,14 20,52 19,01 19,38 20,48 Current ratio (x) 2,29 1,40 1,82 1,76 1,48 1,54 Liquidity ratio (x) 1,67 0,99 1,35 1,30 1,07 1,03 Structure ratios Shareholders liquidity ratio (x) 0,46 0,39 0,31 0,30 0,39 0,26 Solvency ratio (Asset based) (%) 21,80 13,65 14,35 13,80 15,63 12,24 Solvency ratio (Liability based) (%) 27,87 15,81 16,75 16,01 18,52 13,95 2,08 3,71 2,68 2,59 3,22 2,74 Asset Cover (x) Gearing (%) 229,89 366,93 322,58 333,99 286,80 386,93 Profit per employee (unit) 16.116 16.337 15.890 24.335 23.550 18.018 Turnover per employee (unit) 83.562 81.614 79.967 130.916 125.890 106.989 16,24 16,30 16,15 16,75 16,39 17,90 Average Remuneration per employee (unit) 13.570 13.300 12.917 21.930 20.635 19.152 Shareholders Funds per employee (unit) 10.411 6.092 6.438 10.022 10.095 6.924 Working Capital per employee (unit) 25.836 23.430 18.081 31.308 26.282 24.121 Total Assets per employee (unit) 47.762 44.630 44.872 72.609 64.591 56.559 Per employee ratios Salaries/Turnover Credit score & limit There is no credit score & limit information available for this company. Current directors = Name is the same as, or similar to, a PEP’s name or a risk relevant name in the LexisNexis WorldCompliance database 1. Name Role Mr Jonathan Michael Arundell Bewes Director Current director Birth date: Nationality: Work Address: 2. 3. Director Director 01/01/2013 positions are only held in this company. 22/05/1955 United Kingdom Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom Ms Amanda James Current director Birth date: Nationality: Work Address: Appointment date Investment Banker 03/10/2016 positions are held in 5 companies. 27/07/1965 United Kingdom Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom Ms Caroline Mary Ellen Goodall Current director Birth date: Nationality: Work Address: Occupation Director Director 01/04/2015 positions are held in 20 companies. 08/1971 United Kingdom Next Plc Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom Aged 43. Joined the Group in 1995, and has led the management accounting and commercial finance teams since 2005. In 2009 Amanda was appointed Commercial Finance Director and was promoted to NEXT Brand Finance Director in 2012. Amanda has comprehensive knowledge of NEXT's operations and has played a central role in the financial management of the business. 4. Mr Michael William Law Director Current director positions are held in 4 companies. Birth date: 17/06/1961 Director 01/07/2013 Nationality: Work Address: United Kingdom Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom Aged 53. Joined the Group in 1995 as Call Centre Manager for the NEXT Directory. Michael was appointed Call Centre Director in 2003 and in 2006 took responsibility for Group IT. In 2010 he was appointed Group Operations Director, adding Warehousing and Logistics to his portfolio. Michael is now responsible for all Systems, Warehousing, Logistics and Call Centres within the Group and was appointed to the Board in 2013. 5. Mr Michael J. Roney Director Director 14/02/2017 Current director positions are held in 2 companies. Birth date: 13/07/1954 Work Address: Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom 6. Francis William Salway Director Director 01/06/2010 Current director positions are held in 3 companies. Birth date: 05/10/1957 Work Address: Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom 7. Ms Jane Margaret Shields Current director Birth date: Nationality: Work Address: Director Director 01/07/2013 positions are held in 3 companies. 24/10/1963 United Kingdom Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom Aged 51. Joined NEXT Retail in 1985 as a Sales Assistant in one of our London stores. Jane worked her way through Store Management to be appointed Sales Director in 2000, responsible for all store operations and training. In 2006 Jane took additional responsibility for Retail Marketing and in 2010 was appointed Group Sales and Marketing Director, adding Directory and online marketing to her portfolio. She was appointed to the Board in 2013. 8. Ms Ila Dianne Thompson Current director Birth date: Nationality: Work Address: 9. Director 01/01/2015 positions are held in 3 companies. 31/12/1950 United Kingdom Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom Lord Simon Adam Wolfson Of Aspley Guise Current director Birth date: Nationality: Work Address: Director Director Director 09/09/2002 positions are held in 17 companies. 10/1967 United Kingdom Next Plc Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom Aged 47. Joined the Group in 1991. Appointed Retail Sales Director in 1993, became responsible for NEXT Directory in 1995 and was appointed to the Board in 1997 with additional responsibilities for systems. Appointed Managing Director of the NEXT Brand in 1999 and Chief Executive in 2001. 10. Seonna Louise Anderson Current director Birth date: Nationality: Work Address: Company Secretary Company Secretary 03/02/2014 positions are held in 21 companies. 17/05/1966 United Kingdom Next Plc Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom Contacts 1. Name Mr Jonathan Donald Sherlock Dawson Address: Telephone no: 2. 3. 4. 5. 6. 7. 8. Executive Contact Executive Contact Group Sales and Marketing Director Executive Contact Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom 0844 - 844 8888 Director Non-Executive Contact Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom 0844 - 844 8888 Lord Simon Adam Wolfson of Aspley Guise Address: Telephone no: Executive Contact Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom 0844 - 844 8888 Ms Dianne Thompson Address: Telephone no: Group Operations Director Director Ms Jane Margaret Shields Address: Telephone no: Group Finance Director Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom 0844 - 844 8888 Mr Michael Roney Address: Telephone no: Executive Contact Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom 0844 - 844 8888 Mr Michael William Law Address: Telephone no: Group Finance Director Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom 0844 - 844 8888 Mr David Wilson Keens Address: Telephone no: Function Non-Executive Contact Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom 0844 - 844 8888 Ms Amanda James Address: Telephone no: Position Senior Director Chief Executive Executive Contact Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom 0844 - 844 8888 9. Mr Stephen David Barber Address: Telephone no: 10. 11. 12. Non-Executive Contact Non Executive Director Non-Executive Contact Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom 0844 - 844 8888 Mr Francis William Salway Address: Telephone no: Chairman Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom 0844 - 844 8888 Ms Caroline Mary Helen Goodall Address: Telephone no: Non-Executive Contact Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom 0844 - 844 8888 Mr Robert John Orr Barton Address: Telephone no: Non Executive Director Non Executive Director Non-Executive Contact Desford Road, Enderby, LE19 4AT, Leicester, Leicestershire, United Kingdom 0844 - 844 8888 Audit/accountant details Cons. Cons. Cons. Cons. Cons. 28/01/2017 30/01/2016 24/01/2015 25/01/2014 26/01/2013 th GBP th GBP th GBP th GBP th GBP Unqualified Unqualified Unqualified Unqualified Unqualified No No No No No Post Balance sheet event No No No No No Contingent liabilities indicator No No No No No No No No No No Audit Fee 598 536 491 472 448 Non-Audit Fee 189 43 77 119 27 Qualified / Unqualified accounts Qualified opinion which is limitation of scope Qualified opinion, disagreement Audit report is qualified on more than one matter or not true or fair view Auditor comment Audit comment, not qualified, minor Audit comment, not qualified, going concern warning Contingent liabilities value Unaudited accounts Auditors/accountants : Company : ERNST & YOUNG LLP Senior auditor : Nigel Meredith Previous auditors/accountants : Company : ERNST & YOUNG LLP (2016,2015,2014,2013,2012,2011,2010,2009,2008) Senior auditor : Nigel Meredith(2016,2015,2014,2013) Christopher Voogd(2012,2011) 28 U Controlling shareholders BvD Independence Indicator: A+ Current definition of the UO: path of min 50.01% of control, known or unknown shareholders This entity is the Global UO of the Corporate Group. See the Current shareholders report section for other shareholders. Current shareholders Current filter:No filter The companies underlined and displayed in bold blue are available onFAME The companies underlined and displayed in bold grey are available on otherBvD Databases. Ownership Shareholder name Country Type Direct (%) Total (%) Source Source ident. Compan Op. Date of info. Variation n Revenue (m GBP) 1. FMR LLC via its funds US E - 12.24 FS 12/2017  2. BLACKROCK, INC via its funds US B - 10.44 FS 12/2017  9.2 3. INVESCO LTD via its funds BM B - 9.90 FS 01/2018  2.2 4. INVESCO ASSET MANAGEMENT LIMITED GB E 8.15 n.a. SE 01/2018 1 5. MR ERNESTO BERTARELLI via its funds CH I - 3.98 FS 12/2017  6. WOODFORD INVESTMENT MANAGEMENT LIMITED via its funds GB E - 3.14 FS 12/2017  7. COMPUTERSHARE TRUSTEES (JERSEY) LIMITED GB E 3.05 n.a. ZP 05/2017  n n n 8. CAPITAL GROUP CO INC via its funds US E - 3.00 FS 09/2017  9. COMPUTERSHARE TRUSTEES INTERNATIONAL LIMITED (NEXT PLC EMPLOYEE SHARE OWNERSHIP TRUST) n.a. E 2.98 n.a. RS 03/2017  10. NORGES BANK NO B 2.92 n.a. ZP 01/2017  1 11. VANGUARD GROUP INC via its funds US C - 2.87 FS 12/2017  2.2 12. LEGAL & GENERAL GROUP PLC via its funds GB A - 2.46 FS 12/2017  8.7 13. NORWAY via its funds NO S - 2.09 FS 12/2017  14. LONE PINE CAPITAL LLC US Y 1.98 n.a. ZP 06/2017  15. STATE STREET CORP via its funds US B - 1.83 FS 01/2018  22.2 16. INVESCO ADVISERS INC US F 1.65 n.a. SE 01/2018 n 17. RWC PARTNERS LIMITED via its funds GB E - 1.55 FS 12/2017  18. HSBC HOLDINGS PLC via its funds GB B - 1.50 FS 12/2017  65.0 19. SCHRODERS PLC via its funds GB B - 1.43 FS 12/2017  2.1 2.2 20. T ROWE PRICE GROUP INC via its funds US B - 1.34 FS 12/2017  21. TROY ASSET MANAGEMENT LIMITED via its funds GB E - 1.24 FS 12/2017  22. STANDARD LIFE ABERDEEN PLC via its funds GB A - 1.07 FS 12/2017  18.7 23. LORD WOLFSON OF ASPLEY GUISE n.a. I 1.03 n.a. RS 03/2017  24. NORTHERN TRUST CORP via its funds US B - 1.02 FS 12/2017  2.2 25. INVESTEC PLC via its funds GB B - 0.98 FS 12/2017  1.7 26. UBS GROUP AG via its funds CH B - 0.97 FS 12/2017  n 55.5 27. JPMORGAN CHASE & CO via its funds US B - 0.90 FS 01/2018  28. TYBOURNE CAPITAL MANAGEMENT (HK) LIMITED HK E 0.88 n.a. ZP 07/2017  n 29. SOROBAN CAPITAL PARTNERS LLC US E 0.80 n.a. ZP 06/2017  n n 30. FIDELITY INTERNATIONAL LIMITED via its funds BM C - 0.77 FS 12/2017  31. MAJ INVEST HOLDING A/S via its funds DK C - 0.76 FS 12/2017  32. SUN LIFE FINANCIAL (US) INVESTMENTS LLC via its funds US F - 0.72 FS 12/2017  n 33. OLD MUTUAL PUBLIC LIMITED COMPANY via its funds GB A - 0.69 FS 12/2017  18.6 34. SINGAPORE via its funds SG S - 0.67 FS 12/2017  35. STICHTING PENSIOENFONDS ABP via its funds NL A - 0.67 FS 12/2017  36. ANCHORAGE CAPITAL MASTER OFFSHORE, LTD US E 0.61 n.a. ZP 04/2017  n 37. SKANDINAVISKA ENSKILDA BANKEN AB via its funds SE B - 0.58 FS 12/2017  4.1 38. ALLAN & GILL GRAY FOUNDATION via its funds ZA J - 0.57 FS 12/2017  n 39. HARGREAVES LANSDOWN PLC via its funds GB F - 0.52 FS 12/2017  3 40. INTERACTIVE INVESTOR LIMITED via its funds GB C - 0.47 FS 12/2017  41. MIPL HOLDINGS LIMITED via its funds GB C - 0.45 FS 09/2017  2 42. MELVIN CAPITAL MANAGEMENT LP US E 0.42 n.a. ZP 08/2017 n 43. BT INVESTMENT MANAGEMENT LIMITED via its funds AU E - 0.38 FS 12/2017  44. PRUDENTIAL PUBLIC LIMITED COMPANY via its funds GB A - 0.38 FS 12/2017  36.9 45. EVLI BANK PLC via its funds FI B - 0.36 FS 12/2017  46. REGERINGSKANSLIET via its funds SE S - 0.36 FS 12/2017  47. BANK OF NEW YORK MELLON CORP via its funds US B - 0.33 FS 01/2018  6 n n 22.2 48. JANUS HENDERSON GROUP PLC via its funds GB B - 0.33 FS 12/2017  49. DANSKE BANK A/S via its funds DK B - 0.32 FS 12/2017  6.0 50. RATHBONE BROTHERS PUBLIC LIMITED COMPANY via its funds GB B - 0.31 FS 12/2017  2 51. ROYAL LONDON MUTUAL INSURANCE SOCIETY,LIMITED(THE) via its funds GB A - 0.29 FS 12/2017  5 52. HARGREAVE HALE LIMITED via its funds GB C - 0.28 FS 12/2017  53. STATE OF CALIFORNIA via its funds US S - 0.28 FS 12/2017  54. AVIVA PLC via its funds GB A - 0.25 FS 12/2017  55. PRECISION CAPITAL S.A. via its funds LU B - 0.25 FS 12/2017  8 56. BNP PARIBAS via its funds FR B - 0.24 FS 12/2017  39.0 57. DEUTSCHE BANK AG via its funds DE B - 0.24 FS 01/2018  23.9 2 22.8 58. WESLEYAN ASSURANCE SOCIETY via its funds GB A - 0.24 FS 12/2017  59. FRANKLIN RESOURCES, INC. via its funds US B - 0.21 FS 01/2018  4.7 60. UNIGESTION HOLDING SA via its funds CH B - 0.21 FS 12/2017  n n 61. CREDIT SUISSE GROUP AG via its funds CH B - 0.20 FS 12/2017  62. NEW YORK LIFE INSURANCE CO via its funds US A - 0.19 FS 01/2018  22.2 63. GEODE HOLDINGS TRUST via its funds US C - 0.17 FS 12/2017  n 64. SPEIRS & JEFFREY LIMITED via its funds GB F - 0.17 FS 12/2017  65. ALLIANZ SE via its funds DE A - 0.15 FS 12/2017  66. PGGM COOPERATIE U.A. via its funds NL A - 0.15 FS 12/2017  2 67. SWEDBANK AB via its funds SE B - 0.15 FS 12/2017  3.8 68. TIAA BOARD OF OVERSEERS via its funds US C - 0.15 FS 12/2017  n 69. CITY OF EDINBURGH via its funds GB S - 0.14 FS 12/2017  70. JFL MANAGEMENT TRUST via its funds CA E - 0.14 FS 03/2017 n 71. AMF FONDER AB via its funds SE E - 0.13 FS 12/2017  72. NORDEA BANK AB (PUBL) via its funds SE B - 0.13 FS 12/2017  8.4 73. SUMITOMO MITSUI TRUST HOLDINGS, INC via its funds JP B - 0.13 FS 12/2017  7.1 74. ARGENTA BANK AND INSURANCE GROUP SA via its funds BE A - 0.12 FS 10/2017  5 75. INVERSIONES AZVALOR SL. via its funds ES F - 0.12 FS 06/2017 76. BANK OF MONTREAL via its funds CA B - 0.11 FS 12/2017  11.9 77. KOREA REP. OF via its funds KR S - 0.11 FS 12/2017  78. INVESCO ASSET MANAGEMENT DEUTSCHLAND GMBH DE E 0.06 n.a. SE 01/2018 - n 79. INVESCO INVESTMENT ADVISERS LLC US E 0.02 n.a. SE 01/2018 - n 80. INVESCO POWERSHARES CAPITAL MANAGEMENT LLC US E 0.01 n.a. SE 01/2018 - n 65.4 n n 81. MR FRANCIS SALWAY n.a. I NG n.a. RS 03/2017  82. MR JONATHAN BEWES n.a. I NG n.a. RS 03/2017 83. MR MICHAEL LAW n.a. I NG n.a. RS 03/2017  84. MR R J O BARTON n.a. I NG n.a. RS 03/2017  85. MR STEVE BARBER n.a. I NG n.a. RS 03/2017  86. MRS AMANDA JAMES n.a. I NG n.a. RS 03/2017  87. MRS JANE SHIELDS n.a. I NG n.a. RS 03/2017  88. ABERDEEN DIVERSIFIED INCOME AND GROWTH TRUST PLC GB B - n.a. RM 09/2016  89. ABERDEEN UK TRACKER TRUST PLC GB E - n.a. RM 12/2015  90. BAILLIE GIFFORD SHIN NIPPON PUBLIC LIMITED COMPANY GB B - n.a. RM 01/2016  91. BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC GB E - n.a. RM 10/2016 - 92. INVESCO INCOME GROWTH TRUST PLC GB E - n.a. RM 03/2016  93. INVESCO PERPETUAL SELECT TRUST PLC GB E - n.a. RM 05/2016 - 94. JPMORGAN INCOME & CAPITAL TRUST PLC GB E - n.a. RM 02/2016 - 95. JPMORGAN INCOME & GROWTH INVESTMENT TRUST PLC GB E - n.a. RM 01/2016 - 96. JPMORGAN JAPANESE INVESTMENT TRUST PLC GB E - n.a. RM 09/2016  97. KEYSTONE INVESTMENT TRUST PLC GB E - n.a. RM 09/2016 - 98. TROY INCOME & GROWTH TRUST PLC GB E - n.a. RM 09/2016 - = Name is the same as, or similar to, a PEP’s name or a risk relevant name in the LexisNexis WorldCompliance database. = Also a manager = For an insurance company the corresponding value is the Gross Premium Written and for a bank it is the Operating Income (memo) Current subsidiaries Current filter:No filter The companies underlined and displayed in bold blue are available onFAME The companies underlined and displayed in bold grey are available on otherBvD Databases. Ownership Subsidiary name Country Direct (%) Total (%) Source Level Status of own. Source ident. Date of info. Variation 1. CALLSCAN INC US 100.00 100.00 1 UO+ RM 01/2017  2. LLC NEXT RU 100.00 100.00 1 UO+ RM 01/2017  3. NEXT GROUP LIMITED GB 100.00 100.00 1 UO+ RT 12/2017 4. NEXT HOLDINGS LIMITED GB 100.00 100.00 1 UO+ RT 06/2017  5. NEXT SOURCING LIMITED SHANGHAI OFFICE CN 100.00 100.00 1 UO+ RM 01/2017 6. NEXT SWEDEN AB SE 100.00 100.00 1 UO+ RM 01/2017  7. NEXT TRADING (SHANGHAI) CO LIMITED CN 100.00 100.00 1 UO+ RM 01/2017  8. PERIMETER TECHNOLOGY INC. US 100.00 100.00 1 UO+ RM 01/2017  9. ÚJ NEXT KERESKEDELMI KORLÁTOLT FELELOSSÉGU TÁRSASÁG "V.A." HU 100.00 100.00 1 UO+ RM 01/2017  10. AGRATECH LIMITED GB - 100.00 1 UO+ RM 01/2017  11. BELVOIR INSURANCE COMPANY LIMITED GB - 100.00 1 UO+ RM 01/2017  12. BRECON DEBT RECOVERY LIMITED GB - 100.00 1 UO+ RM 01/2017  13. CAIRNS LIMITED HK - 100.00 1 UO RM 01/2017  14. LIPSY LIMITED GB - 100.00 1 UO RM 01/2017  15. NEXT (ASIA) LIMITED HK - 100.00 1 UO RM 01/2017  16. NEXT AV, S.R.O. SK - 100.00 1 UO+ RM 01/2017  17. NEXT BRAND LIMITED GB - 100.00 1 UO+ RM 01/2017  18. NEXT DISTRIBUTION LIMITED GB - 100.00 1 UO+ RM 01/2017  19. NEXT EUROPE B.V. NL - 100.00 1 UO+ RM 01/2017  20. NEXT FINANCIAL SERVICES LIMITED GB - 100.00 1 UO+ RM 01/2017  21. NEXT MANUFACTURING (PVT) LTD. LK - 100.00 1 UO+ RM 01/2017  22. NEXT MANUFACTURING LIMITED GB - 100.00 1 UO+ RM 01/2017  23. NEXT NEAR EAST LIMITED GB - 100.00 1 UO+ RM 01/2017  24. NEXT PENSION TRUSTEES LIMITED GB - 100.00 1 UO+ RM 01/2017  25. NEXT PK, S.R.O. CZ - 100.00 1 UO+ RM 01/2017  26. NEXT PROPERTIES LTD GB - 100.00 1 UO+ RM 01/2017  27. NEXT RETAIL LIMITED GB - 100.00 1 UO+ RM 01/2017  28. NEXT SOURCING (UK) LIMITED GB - 100.00 1 UO+ RM 01/2017  29. NEXT SOURCING LIMITED HK - 100.00 1 UO+ RM 01/2017  30. NEXT SOURCING SERVICES (INDIA) PRIVATE LIMITED IN - 100.00 1 UO+ RM 01/2017  31. NEXT SOURCING VM LIMITED HK - 100.00 1 UO RM 01/2017  32. NSL LIMITED HK - 100.00 1 UO RM 01/2017  33. PAIGE GROUP LIMITED(THE) GB - 100.00 1 UO+ RM 01/2017  34. THE NEXT DIRECTORY LIMITED GB - 100.00 1 UO+ RM 01/2017  35. VENTURA GROUP LIMITED GB - 100.00 1 UO+ RM 01/2017  36. VENTURA NETWORK DISTRIBUTION LIMITED GB - 100.00 1 UO+ RM 01/2017  37. NEXT HEMPEL FASHIONS (SHANGHAI) CO LTD CN 90.00 n.a. 1 UO RM 01/2017  38. CHOICE DISCOUNT STORES LIMITED GB 40.00 n.a. 1 - RT 03/2017  39. WEST YORKSHIRE INDUSTRIAL ESTATES (MANAGEMENT) LIMITED GB 11.00 n.a. 1 - RT 08/2017  * = For an insurance company the corresponding value is the Gross Premium Written and for a bank it is the Operating Income (memo) 29/01/2011 30/01/2010 24/01/2009 th GBP th GBP th GBP 26/01/2008 th GBP 12 months 12 months 12 months 12 months Cons. Cons. Cons. Cons. Unqualified Unqualified Unqualified Unqualified IFRS IFRS IFRS IFRS 3.453.700 3.406.500 3.271.500 3.329.100 551.400 505.300 428.800 498.100 857.200 888.000 1.013.800 551.700 232.300 133.600 156.700 -79.200 15,97 14,83 13,11 237,37 378,22 273,64 14,96 n.s. 61,02 54,02 40,10 84,73 0,63 0,84 0,97 1,09 343,00 603,97 659,99 n.s. 37.220 35.619 36.973 39.155 29/01/2011 30/01/2010 24/01/2009 26/01/2008 th GBP th GBP th GBP th GBP 12 months 12 months 12 months 12 months Cons. Cons. Cons. Cons. Unqualified Unqualified Unqualified Unqualified IFRS IFRS IFRS IFRS 592.400 577.200 612.800 610.600 72.900 74.200 74.000 72.800 66.000 67.300 67.100 65.900 6.900 6.900 6.900 6.900 503.000 538.800 537.800 503.000 538.800 537.800 46.500 47.400 55.400 36.200 30.400 27.700 18.600 4.400 669.300 652.300 686.800 651.200 368.300 309.000 318.700 319.100 11.300 13.000 15.800 297.700 305.700 303.300 533.300 520.200 492.700 478.800 49.300 107.000 47.800 56.000 112.300 96.400 146.900 112.700 1.300 700 1.500 600 9.700 9.700 31.700 13.800 101.300 86.000 113.700 98.300 4.100 8.600 84.400 12.600 1.067.300 1.041.200 1.090.500 979.200 -195.500 -175.000 -204.800 -175.000 -125.400 -5.100 -121.700 -243.100 -125.200 -4.700 -46.300 -242.700 -200 -400 -400 -400 -200 -400 -400 -400 519.500 -75.000 -512.000 -578.000 -381.600 -624.400 -108.400 -109.500 -85.900 -92.400 -58.500 -60.900 -43.600 -56.800 -345.100 -407.600 -252.100 -475.200 -832.900 -758.100 -708.100 -1.042.500 234.400 283.100 382.400 -63.300 857.200 888.000 1.013.800 551.700 706.100 654.200 606.600 622.900 1.736.600 1.693.500 1.777.300 1.630.400 903.700 935.400 1.069.200 587.900 -471.700 -521.500 -568.800 -541.100 -500 -600 -1.000 -1.400 -500 -600 -1.000 -1.400 -471.200 -520.900 -567.800 -539.700 -218.600 -213.900 -227.400 -48.100 -218.600 -213.900 -227.400 -48.100 -36.700 -17.100 -47.300 -32.000 -23.400 -3.700 -34.200 -22.600 -13.300 -13.400 -13.100 -9.400 55.700 -49.500 -69.100 -45.800 -100 200 100 -100 -671.400 -801.800 -912.500 -667.100 232.300 133.600 156.700 -79.200 18.100 19.100 19.700 20.100 214.200 114.500 137.000 -99.300 800 700 700 700 1.782.600 1.615.200 1.539.300 1.374.900 -1.569.200 -1.501.400 -1.403.000 -1.474.900 232.300 133.600 156.700 -79.200 29/01/2011 30/01/2010 24/01/2009 26/01/2008 th GBP th GBP th GBP th GBP 12 months 12 months 12 months 12 months Cons. Cons. Cons. Cons. Unqualified Unqualified Unqualified Unqualified IFRS IFRS IFRS IFRS 3.453.700 3.406.500 3.271.500 3.329.100 3.261.200 3.228.500 3.085.600 3.161.600 192.500 178.000 185.900 167.500 -2.445.000 -2.409.600 -2.363.000 -2.380.000 1.008.700 996.900 908.500 949.100 -437.900 -468.700 -427.300 -413.800 4.000 1.600 -3.800 600 574.800 529.800 477.400 535.900 900 1.200 900 800 2.200 5.500 575.700 530.600 479.600 541.400 900 800 1.300 4.300 -24.300 -25.300 -50.800 -43.300 -22.500 -49.000 -43.200 -100 -100 -1.800 -1.700 -23.400 -24.500 -49.500 -39.000 551.400 505.300 428.800 498.100 -150.500 -141.300 -126.500 -144.200 400.900 364.000 302.300 353.900 200 100 100 200 401.100 364.100 302.400 354.100 -129.600 -108.500 -106.500 -109.200 271.500 255.600 195.900 244.900 120.700 127.100 116.500 108.400 118.000 121.900 116.100 107.800 400 600 400 400 2.300 4.800 487 467 485 471 38 125 110 100 38 35 24 21 90 86 79 900 2.400 300 900 800 300 204.500 202.500 190.100 171.600 202.500 190.100 171.600 15.300 -24.200 4.500 675.200 678.200 634.300 663.300 591.800 597.700 571.400 596.500 43.800 40.900 41.500 44.200 14.400 14.700 12.200 11.900 25.200 24.900 9.200 10.700 4.908 4.868 2.826 3.373 2.417 2.418 2.357 2.236 2.491 2.450 469 1.137 1.600 1.757 1.737 831 979 696.400 659.300 594.200 644.300 37.220 35.619 36.973 39.155 29/01/2011 30/01/2010 24/01/2009 26/01/2008 th GBP th GBP th GBP th GBP 12 months 12 months 12 months 12 months Cons. Cons. Cons. Cons. Unqualified Unqualified Unqualified Unqualified IFRS IFRS IFRS IFRS 593.900 686.700 448.800 518.000 -20.700 -31.200 -141.900 -115.200 -138.100 -98.200 -134.400 -178.900 -129.600 -108.500 -226.900 -229.300 -337.000 -430.000 -63.300 104.300 -22.600 -90.900 29/01/2011 30/01/2010 24/01/2009 26/01/2008 GBP GBP GBP GBP 237,37 378,22 273,64 n.s. 61,02 54,02 40,10 84,73 31,75 29,84 24,13 30,55 15,97 14,83 13,11 14,96 29,21 29,26 27,77 28,51 2,31 2,13 2,12 2,30 16,64 15,55 14,59 16,10 20,16 19,35 18,16 19,35 3,82 3,64 3,06 5,66 5,16 5,22 4,76 5,11 23,69 20,97 9,44 12,50 9,38 11,02 10,27 10,43 6,48 6,55 6,64 6,95 56,36 55,74 54,97 52,50 20,66 18,75 22,85 19,19 1,28 1,37 1,54 0,94 0,84 0,97 1,09 0,63 0,35 0,17 0,17 -0,12 13,38 7,89 8,82 -4,86 15,44 8,56 9,67 n.s. 3,68 3,25 3,12 3,01 343,00 603,97 659,99 n.s. 14.815 14.186 11.598 12.721 92.792 95.637 88.483 85.024 19,55 19,91 19,39 19,92 18.141 19.040 17.156 16.940 6.241 3.751 4.238 n.s. 18.971 18.367 16.407 15.909 46.658 47.545 48.070 41.640 Cons. Cons. Cons. Cons. Cons. 8/01/2012 29/01/2011 30/01/2010 24/01/2009 26/01/2008 th GBP th GBP th GBP th GBP th GBP Unqualified Unqualified Unqualified Unqualified Unqualified No No No No No No No No No No No No No No No No No No n.a. n.a. 454 487 467 485 471 104 38 125 110 100 ny information No of ue employees )* n.a. n.a. .248 n.a. .220 7.500 152 15 - - 39 39 n.a. n.a. n.a. n.a. n.a. n.a. 181 923 .220 17.500 .756 8.939 - - 28 75 .203 37.500 n.a. n.a. 74 114 .063 246.933 .145 3.920 .220 7.500 70 28 .729 6.302 - - .220 17.500 .709 n.a. n.a. 35 .508 225.000 n.a. n.a. n.a. n.a. n.a. 15 63 105 n.a. n.a. .696 68.527 - - n.a. n.a. n.a. n.a. .113 14.946 n.a. n.a. 386 1.043 17 161 249 182 n.a. n.a. n.a. n.a. .961 26.267 64 240 - - .203 62.500 651 928 .030 2.700 272 1.066 561 3.526 48 254 - - .868 29.530 880 4.047 .020 n.a. .977 97.535 269 1.586 .731 9.400 n.a. 35 n.a. 160 .203 17.500 n.a. n.a. 25 149 .404 n.a. 226 5 .826 3.476 n.a. n.a. - - n.a. n.a. n.a. n.a. .405 30.399 .195 22.143 589 893 n.a. 3 .947 45.200 - - n.a. n.a. n.a. n.a. n.a. n.a. - - - - - - - - - - - - - - 23 6 12 4 3 6 2 4 7 6 5 6 7 6 4 5 9 n.a. 10 5 9 n.a. Company information Op. No of Revenue employees (m GBP)* n.a. n.a. n.a. n.a. n.a. n.a. 213 51 4 n.a. <0,5 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5 80 200 n.a. n.a. 2 n.a. n.a. 2 463 5.843 n.a. 1 n.a. n.a. n.a. 3.000 2 39 n.a. 2 n.a. n.a. 8 n.a. n.a. n.a. 4.007 38.482 n.a. n.a. n.a. 283 n.a. n.a. n.a. 70 n.a. n.a. 6 n.a. n.a. 2 n.a. n.a. n.a. n.a. n.a. n.a. 29 399 0 n.a.
Financial Statement Analysis Coursework Assignment Please read the following carefully before embarking on your coursework Contents: KEY INFORMATION ............................................................................................................... 2 REQUIREMENTS ...................................................................................................................... 2 Assistance available ............................................................................................ ……………….3 Presentation Instructions and Assessment Criteria ..................................................................... 3 Presentation hints: ........................................................................................................................ 4 Report Instructions and Assessment Criteria .............................................................................. 4 Formatting instructions: ............................................................................................................... 5 PLAGIARISM ............................................................................................................................ 5 Referencing for in-text citations ................................................................................................. 7 1.1.1 Three examples of good attribution/referencing: ........................ …………………………7 1.1.2 Other examples of in text citation: ....................................................................................... 7 1.1.3 Referencing annual reports ................................................................................................ 8 Format for reference lists ......................................................................................................... ..8 Hints on group work ................................................................................................................... 9 Optional Group Member Contribution Form .............................................................................. 10 1 KEY INFORMATION Overall value: 40% of course grade Presentation value: 15% of course grade Report value: 25% of course grade Presentation submission deadline: Thursday 8th March at 17:00 Presentation submission method: E-mail slides to: stephen@muscatcollege.edu.om Presentation dates: Seminars in teaching weeks 9 and 10 Report submission deadline: Thursday 5th April at 12.00 noon Report submission method: Canvas Report word limit: 2,500 – 3,000 excluding footnotes and appendices. Penalty for late submission: The University’s late submission penalty will be applied to late reports, i.e. coursework will be accepted up to seven days after the submission date but the grade will be lowered by three percentage points per day or part thereof1. An extension to the submission date may be granted by the module co-ordinator for good reason. However, after seven days (including Saturdays and Sundays), or on the expiry of any agreed extension period, the piece of work will be deemed a nonsubmission and will receive a mark of zero. 1 Further information on the University’s late submission policy can be found at: http://www.stir.ac.uk/academicpolicy/handbook/assessment/ You will work in groups of 5. If the class size is not divisible by 5, the module co-ordinator will create a few smaller groups. The word limit is still the same and we do not expect smaller groups to produce substandard essays or presentations. Presenters will receive an individual grade for their part of the presentation based upon their individual performance and how well the team presented as a group. However, in normal circumstances, group members share the group average grade for the report. In extreme circumstances where groups fail to agree a fair allocation of work among their members, the module co-ordinator reserves the option of weighting an individual group’s or group member’s assessment at zero with the effect that the final exam counts for up to 100% of the module assessment for that group member or group. On rare occasions, nonparticipating group members have also been awarded a mark of zero, thereby making it much more difficult for them to pass overall. To avoid problems with your group, please read and follow the “Hints on Group Work” section below. REQUIREMENTS The first thing you should do is check that your allocated company still maintains a live listing on the London Stock Exchange (LSE) and is not the subject of a takeover bid. Companies often delist for various reasons at short notice. Therefore, if this has happened to your company, or happens during your assignment it is your responsibility to inform the module co-ordinator as soon as possible. Depending upon the timing of the delisting, you may be assigned to another company. For the purpose of this assignment you are required to operate as a member of a team. The task of each team is to produce an investment report on your assigned quoted UK public limited company. Imagine that the team is working in the investment management department of a fund management group and is responsible for advising the fund managers on potential equity investments. Assume that the fund managers already invest in the company that you have been asked to analyse and that they are considering whether to increase, reduce or maintain their investment in the company. You are free to choose the overall structure and content of the report but within your report you should specifically include the following: 2 1. A discussion of the strategic capabilities of the company and of the quality of the company management. 2. An analysis of company cash flow. 3. An evaluation of the company’s capital structure (gearing and share ownership). 4. An analysis of company performance, using accounting and other ratios. 5. A discussion of the prospects of the firm in the context of the stock market sector within which it operates. 6. A reasoned forecast of turnover and earnings per share for the full year to the end of the accounting period finishing in 2018. You may wish to include forecasts for additional years to aid your valuation. 7. An absolute valuation of the company and justification of assumptions based upon your analysis in (1) through (6) above. 8. A comment on the share price performance of the company and a discussion of whether the share is likely to outperform the sector and the market over the next twelve months, including a recommendation on whether you consider the share to be a ‘BUY’, ‘HOLD’ or ‘SELL’. Useful sources of information may, among others, include but are not limited to: o overview of company o share price and price relative graphs o key accounting ratios for the company and competitors in the sector Assistance available One of the reasons for choosing a group-based assignment is to encourage the resolution of difficulties through team-work. However, if major problems arise that need input from course staff please use one of the following channels, although you should endeavour to resolve the problem first before contacting a member of staff: E-mail: stephen@muscatcollege.edu.om Presentation Instructions and Assessment Criteria Students will get a group mark for the report. However, presentation marks may be awarded individually to students within the group. This means that it is important that you follow these instructions carefully. The presentation is meant as a way of verbally and visually communicating the contents of your report to the rest of the class and your tutors. 1. The final version of all Power Point presentations must be e-mailed to: stephen@muscatcollege.edu.om Important, to avoid your presentation going astray, please include the module code in the subject header of your e-mail. (note enquiries directed to this e-mail address will not be answered, it is for presentation submissions only) by the deadline stated above. Any attempts to change presentations after this deadline will incur grade penalties. 2. There must be one presentation per group. This should take 20 minutes for the team of five presenters, plus a few minutes for questions. 3. The title of the file should contain your group number and module code. 4. The presentation should clearly be a group, rather than an individual piece of work. Therefore, each group member should speak for not more than four minutes or marks will be deducted as a penalty. If the group member speaks for more than six minutes, they may be stopped to allow the other group members to continue. Marks may also be deducted if a presentation is deemed too short. For groups with less than five members, the time per member is adjusted such that the total presentation time is still 20 minutes. 5. Each group member should identify themselves by putting their full name and registration number on the slides within the presentation which they intend to deliver as well as by introducing themselves verbally. 3 6. After the presentation, there will be approximately five minutes for questions from your classmates and tutor. Marks will be awarded for: -rehearsed presentations that keep to time informed questions, answers and discussion of yours and others presentations Marks will be deducted for: Presentation hints: Giving a successful presentation requires planning and rehearsal, a presentation that sounds natural and unrehearsed is more likely to have been rehearsed many times than a presentation that is stilted, verbose and read directly from a script. Think of a presentation as a piece of theatre but with a clear purpose, i.e. to communicate the arguments in your report and your sales pitch in the most clear, concise and professional way possible. Avoid jokes as you are unlikely to know what kind of a sense of humour your clients have, or even whether they have one. Also jokes take up time, something which you do not have a lot of. It is usually easier to present a flow chart, or a table, a diagram or a graph than pages of text. Do not produce too many slides, one slide should take two to three minutes; therefore, for a twenty minute presentation, you will need no more than twelve slides including the title slide and conclusion, or roughly two to three slides per person. Part of the skill in presenting involves identification of the most important features to cover within whatever time is allocated. Presentations should cover the key features of the company, its strategy, prospects and the reasons for the team’s recommendation. On slides where text is concerned remember, less is more, when well-rehearsed. Microsoft Powerpoint, the visualizer and the overhead projector will be available for your use but please be prepared for non-operation of equipment on the assumption that ‘if it can go wrong, it will go wrong’. Please be present as an audience throughout the presentations by all of the other groups in your seminar slot until all groups in your slot have presented. For some slots this will be two weeks, for others it may be only one week. You will gain valuable experience from supporting your colleagues in this way. Report Instructions and Assessment Criteria Each group should upload one electronic MS Word copy of the report to the Group (Report) [Assignment 2] on Canvas by the deadline. Note that only one student per group should submit the assignment to Canvas. The cover of the report should clearly identify the group number, company name and the registration numbers for each of the group members, but should not give the names of the members. If you wish to keep a copy of the assignment, please ensure that you take a copy before submission. Please note that due to the large number of reports and limited number of staff, it is unlikely that you will receive either your report grade, or feedback before the final exam. However, prior to the commencement of your dissertations (if applicable), we will endeavour to make generic feedback available via Canvass and some individual feedback may also be available to students who request it. 4 The main body of the report should be between 2,500 and 3,000 words in length with the emphasis on quality rather than quantity. Tables, figures, their legends, footnotes, endnotes, appendices and the reference list are all excluded from the above word limit. Report grades will be awarded based upon the ability to: and its investment potential ndependent enquiry and application of judgement) Demonstrate the ability to clearly attribute source material, i.e. referencing, using the Harvard system of citations with a list of references at the back, including, where necessary, page references for key information referred to in the financial statements. Direct quotes must always be italicised and placed in quotation marks with the page and paragraph number of the original source. Failure to do this is plagiarism. sh, and conventional standards of scholarly writing. students who do not take the time to follow the guidelines given. Formatting instructions: The report should have a title page with the group number, student registration numbers and allocated company name; a word count excluding tables, figures, their legends, footnotes, endnotes, appendices and the reference list and a word count including them a half spaced, not single spaced, and with adequate margins for the examiner to write comments Marks will be deducted for: e referencing, reports that are not referenced properly will be failed referenced sources such as published empirical studies ppendix to dump information. The report should be fully comprehensible and complete without the use of the appendix. For example, if you have done a lot of work on the valuation calculation and want to get credit for this, then sufficient detail should be provided in the main text as there is always a possibility that the appendix will not be read. including the referencing guidelines and formatting requirements below. Every year many marks are lost, by students who do not take the time to follow the guidelines given. PLAGIARISM Note that this report, as with all other written assignments are subject to the University of Stirling policies on plagiarism. Instances of plagiarism will be reported to the University authorities and the appropriate 5 penalties will be applied. It is your responsibility to make yourself aware of the University’s policies on plagiarism and to be aware of what constitutes plagiarism. Guidelines on plagiarism can be found at: http://www.plagiarism.stir.ac.uk/documents/BookofPlagiarism.pdf http://www.quality.stir.ac.uk/ac-policy/Misconduct.php If you are in any doubt, you should contact the course coordinator and ask for clarification before submitting your report. As well as being against the University regulations and subject to penalties, instances of plagiarism demonstrate a lack of independent analysis and application of judgement. The ability to carry out independent analysis and make an informed judgement, based upon recognised and acknowledged sources of information, is a key requirement for a professional report of this kind. A report that fails to demonstrate your capabilities in this respect is not consistent with the required standard of performance for this assessment. Copies of previous reports for this exercise are kept within the department, and they will be checked for evidence of plagiarism. Therefore, if you have access to completed reports from previous years on your company, you are strongly advised not to look at them, as your report will be checked against departmental archives for any evidence of plagiarism in this, as in all other respects. 6 Guidance for Referencing for in-text citations Within the body of the text, sources MUST be attributed using the Harvard style referencing system NOT the footnote system. Reports that do not reference properly are guilty of plagiarism. Depending on the degree of plagiarism, the penalties for plagiarism range between reducing the assignment mark by one grade to the award of a fail grade for the whole module, repeat offences of plagiarism may lead to expulsion from the university. Detailed guidance on using the Harvard system can be found here: http://libweb.anglia.ac.uk/referencing/harvard.htm 1.1.1 Three examples of good citation: 1. Several situations in which mis-selling could occur are described by Black and Nobles (1998). Firstly it could refer to deliberate strategies to sell products …... which the salesman knew were not suitable. Secondly, … etc… 2. As a result of a public outcry, personal pension providers have had to compensate those who had been given inappropriate advice to the tune of £14 billion (Blake, 2000; Harrison, 2005). 3. Reilly and Norton (2006 p. 245) cite Tobin (1958) when they state that a. “This division of the investment decision from the financing decision has been called the Separation Theorem” In the above examples it is clear where the ideas are coming from. In particular, note that in the final example, the author, discussing the separation theorem is acknowledging that they have not read the primary source (Tobin 1958) but have learned of the concept from the textbook by Reilly and Norton (2006) which is a secondary source. In this case, both primary and secondary sources should be listed in full in the reference list. 1.1.2 Other examples of in text citation: If there are more than two authors, for an in-text citation it is acceptable to use the abbreviation et al as in Bodie et al. (2005) for the book Bodie Kane and Marcus “Investments” so long as the full reference is provided in the reference list at the back of the report. For online sources such as the BBC or newspapers, include the journalist name, year of publication, article title, publisher, e.g. BBC and exact date. For example, if talking about house price crashes and citing a news report you might say something like “.. for many people, a fall in house prices may be a good thing, for example Davis (2004) argues that first time buyers in particular have a lot to gain from a house price drop”. In your reference list, you must then provide the full reference as follows: Davis, E., (2004) “Why I’d like a house price crash”, BBC, Analysis Section, (Wednesday 29th September 2004, 18.05 GMT), available online at: http://news.bbc.co.uk/1/hi/business/3701070.stm A student who cited all sources and referenced them as above would get full marks for citation and referencing whereas a student who simply put BBC (2004) and gave the generic www.bbc.com as the home page would get none and may even get marks deducted for plagiarism. At a minimum, references should be listed alphabetically by the family (surname) name of the first named author. Each entry should include all author surnames, date of publication, title of book or article, publisher or journal name, where applicable, volume, issue and page numbers. For the frequently asked question, what about internet sources? Always provide the name of author, name of organisation, title of report, date of publication, web address and date accessed. For the frequently asked question, what about sources where I cannot find the name of author, organisation etc? Ask yourself, if you don’t know who the author is, or who they work for, how can you know or verify that their information is reliable? If you cannot know or verify this, should you include this in your report? The answer to the final question is usually no... 7 1.1.3 Referencing annual reports In writing about your company, it is likely that you will make frequent reference to your annual report. Examples of how you might do this are as follows: 1. ‘In our case study analysis, we make frequent reference to the Berkeley Group 2012 Annual Report, hereinafter (BKG AR 2012) and to the interim report (BKG IR 2012). In addition, we refer to two Interim Management Statements for Berkeley Group (IMS 2012a and IMS 2012b respectively) as well as two additional regulatory news announcements (RNS 2012a and RNS 2012b respectively).’ 2. ‘Berkeley Group PLC (BKG) state that: “Berkeley’s strategy is dedicated to delivering its long-term corporate objectives: To maximise shareholder value over the long-term in a sustainable and safe way, returning £13 per share to shareholders by 2021, and to remain one of the most successful and sustainable businesses in Britain.” (BKG AR 2012, p. 1)’ 3. ‘When we analyse the pension liabilities of BKG, we find that they have reduced their long term rate of return assumption for the portion of their fund allocated to equities from 7% (2011) to 6.95% (BKG AR 2012, note 5, p. 126).’ Format for reference lists References should be listed alphabetically by the first named author’s surname (family name). Each entry should include all author surnames, date of publication, title of book or article, publisher or journal name, where applicable, volume, issue and page numbers. For the frequently asked question, what about internet sources? Always provide the name of author, name of organisation, title of report, date of publication, web address and date accessed. For the frequently asked question, what about sources where I cannot find the name of author, organisation etc? Ask yourself, if you don’t know who the author is, or who they work for, how can you know or verify that their information is reliable? If you cannot know or verify this, should you include this in your report? The answer to the final questions is usually no... Another point to bear in mind is the difference between a reference list and a bibliography. A reference list only details works that you have actually cited. A bibliography, on the other hand, can include works which you have read and found relevant, but chosen not to cite, perhaps because the source you did choose to cite was more up-to-date, or more directly relevant in the context of your discussion. Examples of some appropriate reference list entries are provided below: References: Berkeley Group Annual Report (2012), Annual Report and Accounts for the year ended 30th April 2012, published on 7th August 2012. Berkeley Group Interim Report (2012), Interim Results Announcement for the six months ended 31st October 2012, published on 7th December 2012. Berkeley Group Interim Management Statement (2012a), Interim Management Statement, published on 19th March 2012. Berkeley Group Interim Management Statement (2012b), Interim Management Statement, published on 5th September 2012. Black, J. & Nobles, R. (1998), ‘Personal pensions miss selling: the causes and lessons of regulatory failure’, The Modern Law Review, Vol. 61, Part 6, pp. 789-820. BBC (2009) ‘Malaysia in $2.7bn economy boost’ BBC Business and Economy Section, Thursday 5th March 2009, 11.25 GMT. Accessed at: http://news.bbc.co.uk/1/hi/business/7925819.stm 7 8 Hints on group work Most firms require employees to be able to work well as a member of a team. Therefore being able to demonstrate effectiveness in group work is a valuable skill that will help you both in your job search and future career. This assignment gives you an opportunity to develop these skills in a situation where the most you can lose is 40% of your module grade, rather than your job, or your year-end bonus. In the vast majority of cases we find that students enjoy group work and find that it is a valuable part of the learning process. However, in a small number of cases group members have disagreements about individual members’ contributions. Usually, these disagreements can be resolved without involving the module coordinator. However, in order to minimise the risk of group disagreements and in extreme cases to aid the module co-ordinator in the resolution of problems, group members are advised to adopt the following procedures during group work. 1. Start early and make sure you have made contact with all your group members within 3 days of the confirmation of group formation. If you are struggling to make contact, please contact the module coordinator who will try and contact the group member on your behalf. 2. Agree deadlines for individuals to submit their work to the group and stick to them. Individuals who submit their work late are denying their group the opportunity to double check their work and integrate it into a coherent group project. They are also denying themselves the opportunity to receive useful feedback from their peers. 3. Try to organise a face-to-face meetings to agree who is responsible for what tasks as early as possible. For this, together with subsequent meetings and telephone conversations, maintain a record of the key points including conclusions, or lack of, using your university e-mail account a. Note that messages delivered via sms are not suitable for record keeping and should be avoided for any important correspondence where a record might be desirable. 4. When working on document drafts, record the authorship of individual sections of the report and subsequent changes made by other group members using an agreed system, e.g. colour coding, or the ‘Track Changes’ tool in Microsoft Word 5. Transfer document drafts between group members using e-mail attachments. Also when communicating between two group members in this way, it is good manners to copy in all group members 6. Keep, all e-mails sent and received by group members, including attachments 7. All group members are responsible for ensuring that the whole report is free of plagiarism. Therefore, complete the first draft of the report several days before the deadline, make sure that all group members read it and make sure that the report is checked thoroughly for plagiarism. 8. If any group members have doubts about whether their report is plagiarism free, they should draw their doubts to the attention of the module co-ordinator before the submission deadline. Note, report graders are very experienced at detecting plagiarism and have been known to find plagiarism that has not been detected by Turnitin. If in doubt, ask a member of staff before submission. 9 Optional Group Member Contribution Form Completing this form is optional as the default assumption is that everyone will do their fair share of the group project. However, if you feel that this has not worked out as planned, please use this form to rate your own contribution and that of your colleagues to the overall group assignment. You may want to discuss this with your team members first. In the tables that follow, you are asked to assess the relative contribution of yourself as well as of the other members of your group, in terms of a number of headings. For each factor, please mark in one of the four boxes to indicate your assessment of the contribution. The aggregate assessments will be used to make an individual adjustment to the mark given to the group as a whole. Although you should fill in the form privately, it may help if you first discuss it as a group; however, the choice is yours. If you have all contributed equally and agree that you are each happy to receive the group mark, please ensure that the contribution assessments by group members are identical. A space is provided on the back of the form for any other comments including your views on the assessment overall; these would be welcomed. If completed, contribution assessment forms should be submitted to the ‘Essay Box’, within one day of the report submission day. Contribution by yourself Your own name: ______________________________ Signature ______________________________ Contribution Factor Major share Above average Below average 1. 2. 3. 4. 5. 6. Little or no contribution Organisation/ management of project Information search and retrieval Ideas and suggestions Analysis of material Compilation of report Preparation/involvement in presentation 10
Sage Financial Statement Analysis 2 1. EXECUTIVE SUMMARY Annual reports do not usually come with a manual and therefore not easily understood by most individuals who don’t possess any financial knowledge. And hence the need to perform a financial analysis. Information from financial analysis report is usually used by the different stakeholders of a company to make important financial decision. This report analyses the financials of the Sage Group PLC. It specifically analyses the company’s strategic capabilities to determine whether the strategies are sustainable and ensures the company has a competitive advantage. The report also includes the cash flow statement analysis which shows the company’s liquidity levels and going concern status. Moreover, the report also talks about the company’s performance as well its share price and earnings per share turnover. Finally, the report gives a recommendation to the different stakeholders of the company based on the analysis. From the analysis, SAGE Group PLC is a well-performing company with a lot of opportunities and strategic capabilities to capitalize on these opportunities. It would, therefore, be prudent for any investor to hold onto the shares because the turnover and the earnings per share projections are very high indicating high returns for the investors in the future. 3 2. INTRODUCTION SAGE Group PLC is a British multinational company dealing in enterprise software design, development and sales. The company is UK’s second largest technology firm and is the third largest supply of ERP software after Oracle and SAP. SAGE Group Plc. provides various integrated accounting, payments and payroll solutions. Some of its key product offerings include One Payroll, Sage X3 People and Sage 50 Payroll. 3. STRATEGIC CAPABILITIES AND OVERVIEW OF MANAGEMENT 3.1 STRATEGIC CAPABILITIES Sage group ability to use its competitive strategies and advantage overtime has allowed it to survive in the ever-changing markets and to increase its value over time. The company’s strategic capabilities are well evaluated from its profitability as well as revenue generation. Also, its investments and future expansion plan. And finally through the company’s strengths, weaknesses, opportunities as well as threats in addition to other strategies that do not fall in any of the categories mentioned. 3.1.1 General SAGE Group PLC owes much of its success to its sheer size and acquisition strategy as opposed to organic growth. In this regard, the company is viewed by many as a software aggregator that is always adding various business software solutions to its larger pool. The acquisition is aimed at reinforcing the business’ long-term objective of being a cloud-based software provider 3.1.2 Sales and Profitability The profitability margin for Sage is relatively higher than that of its main competitors. The high revenues over the years have significantly contributed to the high profitability. The company’s sales from its different products have been increasing over the years. The main products include One Payroll, Sage X3 People and Sage 50 Payroll with customers over 20 countries in the world. In addition to the high sales, the company has accomplished its high profitability through disciplined resource allocation. Disciplined resource control ensures that the costs are controlled which results into better profits. 4 3.1.3 Expansion Plans and Investments The Sage group expansion has been mainly through acquisition which has the company grow in size. This strategy has enabled the company to provide a variety of services to their customers which has led to increased market share thereby giving the company a competitive advantage. There are also plans by the company to continue with investment that will ensure sales growth and marketing. The company intends to achieve this growth by expanding customer business centers. Also, the company plans to establish integrated digital marketing systems that will ensure increased brand awareness within the current and the potential customers. 3.1.4 Other Strategies and Actions/ Plans In addition to the above strategies, Sage is also planning to capitalize on the current trend which is cloud computing. Cloud computing is the current technology that has numerous benefits and advantages, and it is an easily adoptable technology in today’s world. The main benefit of utilizing this technology is that it minimizes the cost-effectiveness for the development and implementation of software, hardware, and license for everyone (Issham Siti, Johari and Rozhan 34- 43). As it follows, this is the best time to analyze the implementation of the cloud and the technology behind it. In addition to this, the technology can also be utilized for the creation of low cost and quality education for all over the world (Rao, Sasidhar, and Satyendra, 42- 47). Cloud computing is defined as the use of computer applications without installing them to the computer. One access the applications through the web or where one gets access to some applications and data without using the local host and data and applications are accessed remotely from the web through the simple accessible gadgets and can be accessed anywhere where there is internet connection. The data can be accessed and also the applications through the gadgets on the move like personal computer and smartphones and tablets or any gadget that can access the internet (Rountree, 2013). Cloud computing takes the advantage of maximum resources utilization whereby instead of using one server which is locally connected to the workers computers the company may choose to have their data stored by an external user and the company gains access to the data when the data is required (Kling, 2004). The company may also decide to use the online applications, and they are granted access to the applications when they need them. This reduces the storage cost where the organization or company may have had to buy the applications and maintain them (Barry & Miller, 2015). 5 The company just needs to renew the cloud computing license, and they can get the access to their data and the required applications, and when they are through with the use of the applications, then they do not have to pay for the applications (Rountree, 2013). The company when later requires the use of the applications they just have to renew their licenses and they access the applications. On the long run, the company does not have to incur the losses of the maintaining the applications and storing of the data. They do not have to maintain the hardware or undergo the cost of time to time upgrade of the hardware they just require active network access. Cloud or software as a service (SaaS) computing architecture. In the marketplace recently there exists several categories of cloud computing which can be used as the main service way or method of providing the platform of cloud computing service. One of the categories of cloud computing category is known as public clouds (Rountree, 2013). This type of computing in the cloud computing is usually operated and known as of the premise service whereby a third party is involved. It can be described as for public use, and large companies offer services and applications to the consumers from the applications programmers, and the users only have to agree to the license terms and services and pay for the license, and they get the services they need. Also in this category, the applications are not specific they are in all platforms categories for the consumer to make a decision which service best suits their preferences so as to use the specific service. Another specific category in the architecture of cloud computing is known as the private clouds. This is where the specific organization or company has their own personal and internal services. The information department in the specific company or organization is used to design the cloud platform for the organization and manage it or regulate its use from internally, and no third party is involved in the designing of the cloud platform and the platform (Beal, 2013). Private clouds are usually found in allocated specific facilities or a different independent existing data center and are used internally with no external influencing and use (Rountree, 2013). Though workers from the organization can access from their smartphones or handheld gadgets and can work from anywhere using the internet. Virtual private clouds is another category where it is close to private cloud setting but have an extended of the third party but just needs some small changes to security so as to make it private. In this category, the company or organization has internal management in the information technology, and so they manage their data and computerization internally, and yet they receive external updates and services, but it usually is based on the internal 6 management. The user company has all the details of their cloud computing and uses it at their will, but the third party comes in time to time for secure servicing and updating of the database. 3.1.5 SWOT Analysis Strengths • High Weaknesses innovation and technology • capacity • customers is lacking Strong brand giving the company competitive The company brand awareness among advantage over • Intense competition in the industry its competitors • Ability to offer a variety of tailor-made software services to its customers • Continuous increasing profits which shows its credibility to investors. • Availability of large customer base Opportunities • Cloud computing • Opportunity to acquire more customers through global brand campaigns Threats • Loss of sensitive information and talent to competitors • Probability of business and financial risk cause by the dynamics in the current market. 3.2 OVERVIEW OF THE SAGE GROUP The goal of the Sage group is to offer businesses the insight and the information that they need to be successful in the market today. The company strives to achieve this goal by putting live information on their customer's hand to enable them to make prompt decisions that help them succeed. Sage offers customers four main components namely support, choice, expertise, and innovation ensuring they build strong customer relationship and loyalty. Through this, the company believes that they will earn their customers trust making it the go-to source of advice for small and medium businesses. 7 4. CAPITAL STRUCTURE According to Myers (2000), capital structure refers to an organization’s mix of debt and equity securities that it uses to finance its real investments. An organization’s capital structure is a reflection of its strategy. In this regard, gearing ratio was used to determine the company’s capital structure. The company has a net gearing ratio of 69.61%. This implies that 56.59%of the company is financed by owners’ funds and the deficit by creditors. 5. PERFORMANCE ANALYSIS 5.1. PROFITABILITY RATIOS Every firm is most concerned with its profitability. One of the most frequently used tools of financial ratio analysis is profitability ratios, which are used to determine the company's bottom line and its return to its investors. Profitability measures are important to company managers and owners alike. If a small business has outside investors who have put their own money into the company, the primary owner certainly has to show profitability to those equity investors. Profitability ratios show a company's overall efficiency and performance. Profitability ratios are divided into two types: margins and returns. Ratios that show margins represent the firm's ability to translate sales dollars into profits at various stages of measurement. Ratios that show returns represent the firm's ability to measure the overall efficiency of the firm in generating returns for its shareholders. The company has been able to generate and maintain the profitability of the company effectively. The operations have been able to bring down the direct cost of the business; hence the profit from operations has gone up from 32% to 33%. The company has been able to maintain a profit margin of 12%, year on year; this suggests that the company has been able to maintain the proportion of profit in sales steadily (Coyne & Hilsenrath, 2002). The operating profit margins have gone down from 19% to 15%, which shows that the sales dollars which remain after the payment of all costs and expenses, except for interest and taxes. The interesting fact to be understood here is that Cost of Capital is approximately 3% to 4% + EIBOR, approximately 7-8%. Hence the cost of capital is more or less equal to return on capital. The business has excelled to improve it returns on capital employed, to cover up the short term, long-term borrowings. The responsibility of corporate governance is to take care of the 8 interest of the shareholders of the company. The company has been able to generate better return to shareholders. The returns to shareholders have gone up. 5.2. ASSET UTILIZATION RATIOS Although the receivable period has gone up, but the conversion cycles are too long. In the report, it is mentioned that funds are receivable from either government or insurance companies, which have long procedures, to release the payments. Even in some cases, company is doing impairment, to adjust the receivable, at the net realizable value. ‘An estimate of the collectible amount of trade accounts receivable is made when collection of the full amount is no longer probable. Amounts which are not significant, but which are past due, are assessed collectively and a provision applied according to the length of time past due, based on historical recovery rates In the same lines, the receivable time has down own from last year, but this make the operating cycle, very long. Hence the company should try to reduce the receivable cycle. On evaluation the payable deferral period, it came out that payable cycles are shorter than receivable cycles. There is a which ‘negative will harm the operating float’, cycle of the company. This will lead to drying up of working capital, in the company. This situation will lead to liquidity crunch, in years to come. Inventory turnover time has gone up. It generally consist of the medicines sold at pharmacies, the medical equipment etc. the inventory turnover is slow. The total cash conversion cycle is still positive, but it’s too long, the operating cycle, for a healthcare should not be longer than 3 months. Ideally this is the time, during which the patient is diagnosed and treated. The company has to work on reducing its cash conversion cycle, for betterment of working capital management. 5.3. LIQUIDITY RATIOS Liquidity ratios analyze the ability of a company to pay off both its current liabilities as they become due as well as their long-term liabilities as they become current. In other words, these ratios show the cash levels of a company and the ability to turn other assets into cash to pay off liabilities and other current obligations. The short liquidity is quite strong at this point of time, the current asset are almost 2 times the current liability. This is a very healthy position (Thomas, 2009). To go deeper into liquidity issues, the conservative approach of establishing the financial health in short term, can be done by 9 taking out inventory from the current assets, which states that current assets are still better off and cover the liability fully. The operating cycles have no shortage of liquidity. But, as the company has raised funds through borrowing, and invested in inventory, the current assets and liabilities may go up. So, even after considering that, company has comfortable liquidity position. 5.4. DEBT UTILIZATION RATIOS Historical SAGE stock price movement 900 800 Share Price 700 600 500 400 Open 300 200 100 0 4/1/2012 8/14/2013 12/27/2014 5/10/2016 Time Period 9/22/2017 2/4/2019 The company is highly financial leveraged, more that 50% of its assets are financed with debts. But looking at the trend, it is visible that management is trying to reduce the part of debt. Same way, the firm’s financial leverage can be established; it is fairly leveraged in comparison to the equity invested. 2013 2014 2015 2016 2017 Profitability Operating % $26.8 $25.6 $25.1 $26.1 $26.2 % $25.8 $24.2 $23.7 $24.8 $25.8 Margin Profit Margin 10 ROE % $26.1 $29.3 $28.8 $27.1 $28.3 ROCE % -$160.5 -$192.6 -$755.0 -$541.4 -$768.9 Financial Health Net Gearing % $44.9 $51.7 $39.6 $37.8 $69.6 Gross % $56.4 $70.5 $70.2 $54.9 $83.0 x $2.0 $1.9 $1.9 $2.1 $2.3 x $23.5 $16.6 $16.3 $17.2 $18.0 Quick Ratio r $0.5 $0.5 $0.7 $0.7 $0.7 Current r $0.5 $0.5 $0.7 $0.7 $0.7 Gearing Dividend Cover Interest Cover Ratio Growth DPS Growth % -$6.7 $11.6 $7.7 $8.0 $8.3 Norm $2.1 $7.3 $10.3 $16.7 $18.4 -$79.8 $335.4 $4.4 -$3.7 $37.2 EPS % Growth Reported % EPS Growth Cash Flow Cash Flow p $24.6 $23.6 $29.5 $25.9 $43.2 $1.6 $2.5 $1.9 $2.9 $4.8 PS CAPEX PS p 6. 2018 FORECAST OF TURNOVER AND EARNINGS PER SHARE The growth in terms of shareholder’s earnings per share (EPS) has seen a considerable increase within the last five years. It increased from a nominal 2.1% in 2013 to a phenomenal 18.1% in 2017. This implies that the SAGE group share is a great investment vehicle. A review of the share price fluctuation over the years is shown in figure 1 below. The graphical analysis 11 reveals that SAGE GROUP PLC’s share price has experienced and is still experiencing a tremendous growth over the years with little but predictable price fluctuations. The general trends is however positive. 7. FORECAST OF TURNOVER AND EARNINGS PER SHARE FOR THE YEAR ENDING 2018 A forecast of the company’s turnover and Earning per share (EPS) was evaluated using graphical technique and the figures 2nd, the projected EPS for 2018 would be 20.3% as shown in figure 2 below. EPS $20.0 $18.0 $16.0 $14.0 $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 2012.5 2013 2013.5 2014 2014.5 2015 2015.5 2016 2016.5 2017 2017.5 EPS Fig 2. Projected EPS 8. RECOMMENDATIONS From the analysis above, it is without a sheer of doubt that SAGE Group is a wellperforming company compared to its competitors such as SalesForce and Netsuite as indicated by its good financial ratios and performance. Moreover, the company’s earnings per share are also very good, and the projected ESP and turnover are also very high. Therefore I would recommend holding onto the company’s shares because the future expected returns are high. 12 9. CONCLUSION The analysis reveals that SAGE Group plc. Is a fast growing company with great and visionary leadership and organizational culture. The continued growth in its share price can be attributed to its aggressive and innovative investment in net generation technology like cloud computing. An analysis of the company’s financials reveals an impressive growth potential which therefore implies that its stock is suitable for long-term investments. 13 References Algahtani, A. (2014). Are leadership and management different? A review. Journal Management, 2(3), 71-82. Barry, J and Miller, P (2015) International Accounting Standers: Edition 5th Volume 9th Printed by McGraw Press London Page Number 44-67 Coyne, J. S., & Hilsenrath, P. (2012). The World Health Report 2000: Can health care systems be compared using a single measure of performance? American Journal of Public Health, 92(1), 30-33. Davi, K and tom, L (2013) Ratio Analysis and Its Advantages: Edition 3rd Volume 4th Pruted by McGrew Press Oxford Lodnon: Page number 97-102 McCleskey JA (2014) Situational, transformational and transactional leadership and leadership development. J Bus Stud Q. 2014 [cited 2015 Apr. 20];5(4):117-30 Noland, A., & Richards, K. (2014). The relationship among transformational teaching and student motivation and learning. The Journal of Effective Teaching, 14(3), 5-20 Websites ➢ https://www.thebalance.com/profitability-ratio-analysis.html(Accessed as on 20th FEB 2018) ➢ https://www.myaccountingcourse.com/financial-ratios/liquidity-ratios.html(Accessed as on 23rd FEB 2018)
£m Income statement Sales NOPAT After tax net int NI Balance sheet (end of year) Net op working capital Net long-term assets Total net assets Debt Shareholders equity Total net capital Return on assets (NOPAT/NA) Assumptions Initial sales level Sales growth NOPAT Margin interest rate (after tax) working cap/sales assets/sales debt/capital Cost of equity WACC Year Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 1000 110,0 1.100,0 121,0 13,0 108,0 1.210,0 121,0 14,3 106,7 1.331,0 119,8 15,7 104,1 1.464,1 117,1 17,3 99,8 1.610,5 112,7 19,0 93,7 250,0 400,0 650,0 260,0 390,0 650,0 275,0 440,0 715,0 286,0 429,0 715,0 18,6% 302,5 484,0 786,5 314,6 471,9 786,5 16,9% 332,8 532,4 865,2 346,1 519,1 865,2 15,2% 366,0 585,6 951,7 380,7 571,0 951,7 13,5% 402,6 644,2 1046,8 418,7 628,1 1046,8 11,8% 10% 11% 5% 25% 40% 40% 12% 9,2% 1 10% 10% 5% 25% 40% 40% 12% 9,2% 2 10% 9% 5% 25% 40% 40% 12% 9,2% 3 10% 8% 5% 25% 40% 40% 12% 9,2% 4 10% 7% 5% 25% 40% 40% 12% 9,2% 5 1000 11% 5% 25% 40% 40% 12% Free Cash Flows to Firm Year 6 Terminal year NOPAT Change in work. cap. Change in net assets FCFF Discount factor PV of FCFF Year 1 Year 2 Year 3 Year 4 Year 5 121,0 121,0 119,8 117,1 112,7 25,0 27,5 30,3 33,3 36,6 40,0 44,0 48,4 53,2 58,6 56,0 49,5 41,1 30,6 17,6 0,916 51,3 0,839 41,5 0,768 31,6 0,703 21,5 0,644 11,3 £m Income statement Sales NOPAT After tax net int NI Balance sheet (end of year) Net op working capital Net long-term assets Total net assets Debt Shareholders equity Total net capital Return on assets (NOPAT/NA) Assumptions Initial sales level Sales growth NOPAT Margin interest rate (after tax) working cap/sales assets/sales debt/capital Cost of equity WACC Year ROA Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 1000 110,0 1.100,0 121,0 13,0 108,0 1.210,0 121,0 14,3 106,7 1.331,0 119,8 15,7 104,1 1.464,1 117,1 17,3 99,8 1.610,5 112,7 19,0 93,7 250,0 400,0 650,0 260,0 390,0 650,0 275,0 440,0 715,0 286,0 429,0 715,0 18,6% 302,5 484,0 786,5 314,6 471,9 786,5 16,9% 332,8 532,4 865,2 346,1 519,1 865,2 15,2% 366,0 585,6 951,7 380,7 571,0 951,7 13,5% 402,6 644,2 1046,8 418,7 628,1 1046,8 11,8% 10,0% 11% 5% 25% 40% 40% 12% 9,2% 1 10,0% 10% 5% 25% 40% 40% 12% 9,2% 2 10,0% 9% 5% 25% 40% 40% 12% 9,2% 3 10,0% 8% 5% 25% 40% 40% 12% 9,2% 4 10,0% 7% 5% 25% 40% 40% 12% 9,2% 5 1000 11% 5% 25% 40% 40% 12% Free Cash Flows to Firm Year 6 Year 7 Terminal year 1.666,9 96,3 20,9 75,4 1.725,2 99,7 21,7 78,0 416,7 666,8 1083,5 433,4 650,1 1083,5 9,2% 431,3 690,1 1121,4 448,6 672,8 1121,4 9,2% NOPAT Change in work. cap. Change in net assets FCFF Discount factor PV of FCFF Value of Firm Year 1 Year 2 Year 3 Year 4 121,0 121,0 119,8 117,1 25,0 27,5 30,3 33,3 40,0 44,0 48,4 53,2 56,0 49,5 41,1 30,6 0,916 51,3 831,4 0,839 41,5 0,768 31,6 0,703 21,5 Discounted Abnormal NOPAT 3,5% 5% 25% 40% 40% 12% 9,2% 6 9,2% 3,5% 5% 25% 40% 40% 12% 9,2% 7 9,2% BV D+E (start of year) NOPAT Charge for capital Abnormal NOPAT Discount factor PV of abn NOPAT Value of abn NOPAT BV D+E at start Value of Firm Year 1 Year 2 Year 3 Year 4 650,0 715,0 786,5 865,2 121,0 121,0 119,8 117,1 59,8 65,8 72,4 79,6 61,2 55,2 47,4 37,5 0,916 56,0 181,4 650,0 831,4 0,839 46,3 0,768 36,4 0,703 26,4 Year 5 Year 6 Year 7 112,7 96,3 99,7 36,6 14,1 14,6 58,6 22,5 Growth in FCF 23,3 17,6 59,7 3,5% 61,8 1046,8 Terminal value 0,644 11,3 0,644 674,2 Year 5 Year 6 951,7 1046,8 112,7 96,3 87,6 96,3 Growth in AE 25,2 0,0 3,5% 0,0 Terminal value 0,644 16,2 0,644 0,0 3,5% Growth from Year 6 to Year7 £m Income statement Sales NOPAT After tax net int NI Balance sheet (end of year) Net op working capital Net long-term assets Total net assets Debt Shareholders equity Total net capital Return on assets (NOPAT/NA) Assumptions Initial sales level Sales growth NOPAT Margin interest rate (after tax) working cap/sales assets/sales debt/capital Cost of equity WACC Year ROA Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 1000 110,0 1.100,0 121,0 13,0 108,0 1.210,0 121,0 14,3 106,7 1.331,0 119,8 15,7 104,1 1.464,1 117,1 17,3 99,8 1.610,5 112,7 19,0 93,7 250,0 400,0 650,0 260,0 390,0 650,0 275,0 440,0 715,0 286,0 429,0 715,0 18,6% 302,5 484,0 786,5 314,6 471,9 786,5 16,9% 332,8 532,4 865,2 346,1 519,1 865,2 15,2% 366,0 585,6 951,7 380,7 571,0 951,7 13,5% 402,6 644,2 1046,8 418,7 628,1 1046,8 11,8% 10,0% 11% 5% 25% 40% 40% 12% 9,2% 1 10,0% 10% 5% 25% 40% 40% 12% 9,2% 2 10,0% 9% 5% 25% 40% 40% 12% 9,2% 3 10,0% 8% 5% 25% 40% 40% 12% 9,2% 4 10,0% 7% 5% 25% 40% 40% 12% 9,2% 5 1000 11% 5% 25% 40% 40% 12% Free Cash Flows to Firm Year 6 Year 7 Terminal year 1.610,5 96,3 20,9 75,4 1.610,5 96,3 20,9 75,4 402,6 644,2 1046,8 418,7 628,1 1046,8 9,2% 402,6 644,2 1046,8 418,7 628,1 1046,8 9,2% NOPAT Change in work. cap. Change in net assets FCFF Discount factor PV of FCFF Value of Firm Year 1 Year 2 Year 3 Year 4 121,0 121,0 119,8 117,1 25,0 27,5 30,3 33,3 40,0 44,0 48,4 53,2 56,0 49,5 41,1 30,6 0,916 51,3 831,4 0,839 41,5 0,768 31,6 0,703 21,5 Discounted Abnormal NOPAT 0,0% 5% 25% 40% 40% 12% 9,2% 6 9,2% 0,0% 5% 25% 40% 40% 12% 9,2% 7 9,2% BV D+E (start of year) NOPAT Charge for capital Abnormal NOPAT Discount factor PV of abn NOPAT Value of abn NOPAT BV D+E at start Value of Firm Year 1 Year 2 Year 3 Year 4 650,0 715,0 786,5 865,2 121,0 121,0 119,8 117,1 59,8 65,8 72,4 79,6 61,2 55,2 47,4 37,5 0,916 56,0 181,4 650,0 831,4 0,839 46,3 0,768 36,4 0,703 26,4 Year 5 Year 6 Year 7 112,7 96,3 96,3 36,6 0,0 0,0 58,6 0,0 Growth in FCF 0,0 17,6 96,3 0,0% 96,3 1046,8 Terminal value 0,644 11,3 0,644 674,2 Year 5 Year 6 951,7 1046,8 112,7 96,3 87,6 96,3 Growth in AE 25,2 0,0 0,0% 0,0 Terminal value 0,644 16,2 0,644 0,0 0,0% Growth from Year 6 to Year7 £m Income statement Sales NOPAT After tax net int NI Balance sheet (end of year) Net op working capital Net long-term assets Total net assets Debt Shareholders equity Total net capital Return on assets (NOPAT/NA) Assumptions Initial sales level Sales growth NOPAT Margin interest rate (after tax) working cap/sales assets/sales debt/capital Cost of equity WACC Year ROA Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 1000 110,0 1.100,0 121,0 13,0 108,0 1.210,0 121,0 14,3 106,7 1.331,0 119,8 15,7 104,1 1.464,1 117,1 17,3 99,8 1.610,5 112,7 19,0 93,7 250,0 400,0 650,0 260,0 390,0 650,0 275,0 440,0 715,0 286,0 429,0 715,0 18,6% 302,5 484,0 786,5 314,6 471,9 786,5 16,9% 332,8 532,4 865,2 346,1 519,1 865,2 15,2% 366,0 585,6 951,7 380,7 571,0 951,7 13,5% 402,6 644,2 1046,8 418,7 628,1 1046,8 11,8% 10,0% 11% 5% 25% 40% 40% 12% 9,2% 1 10,0% 10% 5% 25% 40% 40% 12% 9,2% 2 10,0% 9% 5% 25% 40% 40% 12% 9,2% 3 10,0% 8% 5% 25% 40% 40% 12% 9,2% 4 10,0% 7% 5% 25% 40% 40% 12% 9,2% 5 1000 11% 5% 25% 40% 40% 12% Free Cash Flows to Firm Year 6 Year 7 Terminal year 1.610,5 124,0 20,9 103,1 1.610,5 124,0 20,9 103,1 402,6 644,2 1046,8 418,7 628,1 1046,8 11,8% 402,6 644,2 1046,8 418,7 628,1 1046,8 11,8% NOPAT Change in work. cap. Change in net assets FCFF Discount factor PV of FCFF Value of Firm Year 1 Year 2 Year 3 Year 4 121,0 121,0 119,8 117,1 25,0 27,5 30,3 33,3 40,0 44,0 48,4 53,2 56,0 49,5 41,1 30,6 0,916 51,3 1025,3 0,839 41,5 0,768 31,6 0,703 21,5 Discounted Abnormal NOPAT 0,0% 5% 25% 40% 40% 12% 9,2% 6 11,8% 0,0% 5% 25% 40% 40% 12% 9,2% 7 11,8% BV D+E (start of year) NOPAT Charge for capital Abnormal NOPAT Discount factor PV of abn NOPAT Value of abn NOPAT BV D+E at start Value of Firm Year 1 Year 2 Year 3 Year 4 650,0 715,0 786,5 865,2 121,0 121,0 119,8 117,1 59,8 65,8 72,4 79,6 61,2 55,2 47,4 37,5 0,916 56,0 375,3 650,0 1025,3 0,839 46,3 0,768 36,4 0,703 26,4 Year 5 Year 6 Year 7 112,7 124,0 124,0 36,6 0,0 0,0 58,6 0,0 Growth in FCF 0,0 17,6 124,0 0,0% 124,0 1347,9 Terminal value 0,644 11,3 0,644 868,1 Year 5 Year 6 951,7 1046,8 112,7 124,0 87,6 96,3 Growth in AE 25,2 27,7 0,0% 301,1 Terminal value 0,644 16,2 0,644 193,9 0,0% Growth from Year 6 to Year7 £m Income statement Sales NOPAT After tax net int NI Balance sheet (end of year) Net op working capital Net long-term assets Total net assets Debt Shareholders equity Total net capital Return on assets (NOPAT/NA) Assumptions Initial sales level Sales growth NOPAT Margin interest rate (after tax) working cap/sales assets/sales debt/capital Cost of equity WACC Year ROA Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 1000 110,0 1.100,0 121,0 13,0 108,0 1.210,0 121,0 14,3 106,7 1.331,0 119,8 15,7 104,1 1.464,1 117,1 17,3 99,8 1.610,5 112,7 19,0 93,7 250,0 400,0 650,0 260,0 390,0 650,0 275,0 440,0 715,0 286,0 429,0 715,0 18,6% 302,5 484,0 786,5 314,6 471,9 786,5 16,9% 332,8 532,4 865,2 346,1 519,1 865,2 15,2% 366,0 585,6 951,7 380,7 571,0 951,7 13,5% 402,6 644,2 1046,8 418,7 628,1 1046,8 11,8% 10,0% 11% 5% 25% 40% 40% 12% 9,2% 1 10,0% 10% 5% 25% 40% 40% 12% 9,2% 2 10,0% 9% 5% 25% 40% 40% 12% 9,2% 3 10,0% 8% 5% 25% 40% 40% 12% 9,2% 4 10,0% 7% 5% 25% 40% 40% 12% 9,2% 5 1000 11% 5% 25% 40% 40% 12% Free Cash Flows to Firm Year 6 Year 7 Terminal year 1.666,9 124,0 20,9 103,1 1.725,2 128,3 21,7 106,7 416,7 666,8 1083,5 433,4 650,1 1083,5 11,8% 431,3 690,1 1121,4 448,6 672,8 1121,4 11,8% NOPAT Change in work. cap. Change in net assets FCFF Discount factor PV of FCFF Value of Firm Year 1 Year 2 Year 3 Year 4 121,0 121,0 119,8 117,1 25,0 27,5 30,3 33,3 40,0 44,0 48,4 53,2 56,0 49,5 41,1 30,6 0,916 51,3 1144,4 0,839 41,5 0,768 31,6 0,703 21,5 Discounted Abnormal NOPAT 3,5% 5% 25% 40% 40% 12% 9,2% 6 11,8% 3,5% 5% 25% 40% 40% 12% 9,2% 7 11,8% BV D+E (start of year) NOPAT Charge for capital Abnormal NOPAT Discount factor PV of abn NOPAT Value of abn NOPAT BV D+E at start Value of Firm Year 1 Year 2 Year 3 Year 4 650,0 715,0 786,5 865,2 121,0 121,0 119,8 117,1 59,8 65,8 72,4 79,6 61,2 55,2 47,4 37,5 0,916 56,0 494,4 650,0 1144,4 0,839 46,3 0,768 36,4 0,703 26,4 Year 5 Year 6 Year 7 112,7 124,0 128,3 36,6 14,1 14,6 58,6 22,5 Growth in FCF 23,3 17,6 87,4 3,5% 90,4 1532,8 Terminal value 0,644 11,3 0,644 987,1 Year 5 Year 6 951,7 1046,8 112,7 124,0 87,6 96,3 Growth in AE 25,2 27,7 3,5% 486,0 Terminal value 0,644 16,2 0,644 313,0 3,5% Growth from Year 6 to Year7 £m Income statement Sales NOPAT After tax net int NI Balance sheet (end of year) Net op working capital Net long-term assets Total net assets Debt Shareholders equity Total net capital Return on assets (NOPAT/NA) Return on equity (NI/Equity) Assumptions Initial sales level Sales growth NOPAT Margin interest rate (after tax) working cap/sales assets/sales debt/capital Cost of equity WACC Year ROA Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 1000 110,0 1.100,0 121,0 13,0 108,0 1.210,0 121,0 14,3 106,7 1.331,0 119,8 15,7 104,1 1.464,1 117,1 17,3 99,8 1.610,5 112,7 19,0 93,7 250,0 400,0 650,0 260,0 390,0 650,0 275,0 440,0 715,0 286,0 429,0 715,0 18,6% 27,7% 302,5 484,0 786,5 314,6 471,9 786,5 16,9% 24,9% 332,8 532,4 865,2 346,1 519,1 865,2 15,2% 22,1% 366,0 585,6 951,7 380,7 571,0 951,7 13,5% 19,2% 402,6 644,2 1046,8 418,7 628,1 1046,8 11,8% 16,4% 10,0% 11% 5% 25% 40% 40% 12% 9,2% 1 10,0% 10% 5% 25% 40% 40% 12% 9,2% 2 10,0% 9% 5% 25% 40% 40% 12% 9,2% 3 10,0% 8% 5% 25% 40% 40% 12% 9,2% 4 10,0% 7% 5% 25% 40% 40% 12% 9,2% 5 1000 11% 5% 25% 40% 40% 12% Free Cash Flows to Equity Year 6 Year 7 Terminal year 1.666,9 96,3 20,9 75,4 1.725,2 99,7 21,7 78,0 416,7 666,8 1083,5 433,4 650,1 1083,5 9,2% 12,0% 431,3 690,1 1121,4 448,6 672,8 1121,4 9,2% 12,0% Net income Change in work. cap. Change in net lt assets Change in net debt FCFE Discount factor PV of FCFE Value of equity Year 1 Year 2 Year 3 Year 4 108,0 106,7 104,1 99,8 25,0 27,5 30,3 33,3 40,0 44,0 48,4 53,2 26,0 28,6 31,5 34,6 69,0 63,8 56,9 47,9 0,893 61,6 560,6 0,797 50,9 0,712 40,5 0,636 30,5 Discounted Abnormal Earnings 3,5% 5% 25% 40% 40% 12% 9,2% 6 9,2% 3,5% 5% 25% 40% 40% 12% 9,2% 7 9,2% BVE (start of year) NI Charge for equity Abnormal earnings Discount factor PV of abn earnings Value of abn earnings BVE at start Value of equity Year 1 Year 2 Year 3 Year 4 390,0 429,0 471,9 519,1 108,0 106,7 104,1 99,8 46,8 51,5 56,6 62,3 61,2 55,2 47,4 37,5 0,893 54,6 170,6 390,0 560,6 0,797 44,0 0,712 33,8 0,636 23,9 Year 5 Year 6 Year 7 93,7 75,4 78,0 36,6 14,1 14,6 58,6 22,5 23,3 38,1 14,7 Growth in FCF 15,2 36,6 53,4 3,5% 55,3 628,1 Terminal value 0,567 20,8 0,567 356,4 Year 5 Year 6 571,0 628,1 93,7 75,4 68,5 75,4 Growth in AE 25,2 0,0 3,5% 0,0 Terminal value 0,567 14,3 0,567 0,0 0,452 25,0 3,5% Growth from Year 6 to Year7 £m Income statement Sales NOPAT After tax net int NI Balance sheet (end of year) Net op working capital Net long-term assets Total net assets Debt Shareholders equity Total net capital Return on assets (NOPAT/NA) Return on equity (NI/Equity) Assumptions Initial sales level Sales growth NOPAT Margin interest rate (after tax) working cap/sales assets/sales debt/capital Cost of equity WACC Year ROA Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 1312 170,6 1.354,0 176,0 29,7 146,3 1.376,0 137,6 30,6 107,0 1.354,0 121,9 31,1 90,7 1.436,0 114,9 30,6 84,2 1.439,0 100,7 32,5 68,2 328,0 524,8 852,8 593,6 259,2 852,8 338,5 541,6 880,1 612,6 267,5 880,1 20,6% 56,5% 344,0 550,4 894,4 622,6 271,8 894,4 15,6% 40,0% 338,5 541,6 880,1 612,6 267,5 880,1 13,6% 33,4% 359,0 574,4 933,4 649,7 283,7 933,4 13,1% 31,5% 359,8 575,6 935,4 651,1 284,3 935,4 10,8% 24,1% 10,0% 13% 5% 25% 40% 70% 12% 7,1% 1 10,0% 10% 5% 25% 40% 70% 12% 7,1% 2 10,0% 9% 5% 25% 40% 70% 12% 7,1% 3 10,0% 8% 5% 25% 40% 70% 12% 7,1% 4 10,0% 7% 5% 25% 40% 70% 12% 7,1% 5 1000 13% 5% 25% 40% 70% 12% Free Cash Flows to Equity Year 6 Year 7 Terminal year 1.715,0 100,9 32,6 68,4 1.715,0 120,3 38,8 81,5 428,8 686,0 1114,8 776,0 338,8 1114,8 10,8% 24,1% 428,8 686,0 1114,8 776,0 338,8 1114,8 10,8% 24,1% Net income Change in work. cap. Change in net lt assets Change in net debt FCFE Discount factor PV of FCFE Value of equity Year 1 Year 2 Year 3 Year 4 42,0 46,0 188,0 194,0 10,5 5,5 -5,5 20,5 16,8 8,8 -8,8 32,8 19,0 10,0 -10,0 37,1 33,7 41,7 192,3 177,8 0,893 30,1 1377,0 0,797 33,2 0,712 136,9 0,636 113,0 Discounted Abnormal Earnings 0,0% 5% 25% 40% 70% 12% 7,1% 6 10,8% 0,0% 5% 25% 40% 70% 12% 7,1% 7 10,8% BVE (start of year) NI Charge for equity Abnormal earnings Discount factor PV of abn earnings Value of abn earnings BVE at start Value of equity Year 1 Year 2 Year 3 Year 4 219,0 216,0 229,0 245,0 117,0 189,0 90,7 84,2 26,3 25,9 27,5 29,4 90,7 163,1 63,3 54,8 0,893 81,0 479,7 219,0 698,7 0,797 130,0 0,712 45,0 0,636 34,9 Year 5 Year 6 Year 7 188,0 257,0 81,5 0,8 69,0 0,0 1,2 110,4 0,0 1,4 124,9 Growth in FCF 0,0 187,4 202,5 0,0% 81,5 1687,3 Terminal value 0,567 106,3 0,567 957,4 Year 5 Year 6 245,0 276,0 68,2 68,4 29,4 33,1 Growth in AE 38,8 35,3 0,0% 293,9 Terminal value 0,567 22,0 0,567 166,8 0,452 36,9 -59,7% Growth from Year 6 to Year7 £m Income statement Sales NOPAT After tax net int NI Balance sheet (end of year) Net op working capital Net long-term assets Total net assets Debt Shareholders equity Total net capital Return on assets (NOPAT/NA) Return on equity (NI/Equity) Assumptions Initial sales level Sales growth NOPAT Margin interest rate (after tax) working cap/sales assets/sales debt/capital Cost of equity WACC Year ROA Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 1312 170,6 1.354,0 176,0 29,7 146,3 1.376,0 137,6 30,6 107,0 1.354,0 121,9 31,1 90,7 1.436,0 114,9 30,6 84,2 1.439,0 100,7 32,5 68,2 328,0 524,8 852,8 593,6 259,2 852,8 338,5 541,6 880,1 612,6 267,5 880,1 20,6% 56,5% 344,0 550,4 894,4 622,6 271,8 894,4 15,6% 40,0% 338,5 541,6 880,1 612,6 267,5 880,1 13,6% 33,4% 359,0 574,4 933,4 649,7 283,7 933,4 13,1% 31,5% 359,8 575,6 935,4 651,1 284,3 935,4 10,8% 24,1% 10,0% 13% 5% 25% 40% 70% 12% 7,1% 1 10,0% 10% 5% 25% 40% 70% 12% 7,1% 2 10,0% 9% 5% 25% 40% 70% 12% 7,1% 3 10,0% 8% 5% 25% 40% 70% 12% 7,1% 4 10,0% 7% 5% 25% 40% 70% 12% 7,1% 5 1000 13% 5% 25% 40% 70% 12% Free Cash Flows to Equity Year 6 Year 7 Terminal year 1.715,0 100,9 32,6 68,4 1.715,0 120,3 38,8 81,5 428,8 686,0 1114,8 776,0 338,8 1114,8 10,8% 24,1% 428,8 686,0 1114,8 776,0 338,8 1114,8 10,8% 24,1% Net income Change in work. cap. Change in net lt assets Change in net debt FCFE Discount factor PV of FCFE Value of equity Year 1 Year 2 Year 3 Year 4 42,0 46,0 188,0 194,0 10,5 5,5 -5,5 20,5 16,8 8,8 -8,8 32,8 19,0 10,0 -10,0 37,1 33,7 41,7 192,3 177,8 0,893 30,1 1377,0 0,797 33,2 0,712 136,9 0,636 113,0 Discounted Abnormal Earnings 0,0% 5% 25% 40% 70% 12% 7,1% 6 10,8% 0,0% 5% 25% 40% 70% 12% 7,1% 7 10,8% BVE (start of year) NI Charge for equity Abnormal earnings Discount factor PV of abn earnings Value of abn earnings BVE at start Value of equity Year 1 Year 2 Year 3 Year 4 219,0 216,0 229,0 245,0 146,3 107,0 90,7 84,2 26,3 25,9 27,5 29,4 120,1 81,0 63,3 54,8 0,893 107,2 440,5 219,0 659,5 0,797 64,6 0,712 45,0 0,636 34,9 Year 5 Year 6 Year 7 188,0 257,0 81,5 0,8 69,0 0,0 1,2 110,4 0,0 1,4 124,9 Growth in FCF 0,0 187,4 202,5 0,0% 81,5 1687,3 Terminal value 0,567 106,3 0,567 957,4 Year 5 Year 6 245,0 276,0 68,2 68,4 29,4 33,1 Growth in AE 38,8 35,3 0,0% 293,9 Terminal value 0,567 22,0 0,567 166,8 0,452 36,9 -59,7% Growth from Year 6 to Year7

Tutor Answer

pergomich
School: UC Berkeley

Attached.

NEXT PLC INCOME STATEMENT
Fiscal year ends in January. GBP in millions except per share data
Revenue
Cost of revenue
Gross profit
Operating expenses
Sales, General and administrative
Other operating expenses
Total operating expenses
Operating income
Interest Expense
Other income (expense)
Income before income taxes
Provision for income taxes
Minority interest
Other income
Net income from continuing operations
Other
Net income
Net income available to common shareholders
Earnings per share
Basic
Diluted
Weighted average shares outstanding
Basic
Diluted
EBITDA

2013-01
$ 3.563,00
$ 2.437,00
$ 1.126,00
$
$
$
$
$
$
$
$
$
$
$
$
$
$

470,00
(1,00)
470,00
656,00
24,00
35,00
666,00
158,00
509,00
509,00
509,00

2014-01
$ 3.740,00
$ 2.500,00
$ 1.240,00
$
$
$
$
$
$
$
$

514,00
(2,00)
511,00
729,00
25,00
(8,00)
695,00
142,00

$

553,00

$
$

553,00
553,00

$
$

1,60 $
1,56 $

1,83
1,78

$
$
$

318,00 $
326,00 $
808,00 $

302,00
311,00
838,00

EMENT
2015-01
$ 4.000,00
$ 2.656,00
$ 1.343,00

2016-01
$ 4.177,00
$ 2.724,00
$ 1.453,00
$
$
$
$
$
$
$
$

581,00
(1,00)
580,00
873,00
32,00
(5,00)
836,00
169,00

2017-01
$ 4.097,00
$ 2.711,00
$ 1.387,00
$
$
$
$
$
$
$
$

560,00
(1,00)
559,00
828,00
38,00
790,00
155,00

TTM
$ 4.045,00
$ 2.689,00
$ 1.357,00

$
$
$
$
$
$
$
$

541,00
(1,00)
540,00
803,00
31,00
22,00
795,00
160,00

$
$
$
$
$
$
$
$

565,00
(1,00)
564,00
792,00
36,00
1,00
758,00
144,00

$

635,00 $

667,00 $

635,00 $

614,00

$
$

635,00 $
635,00 $

667,00 $
667,00 $

635,00 $
635,00 $

614,00
614,00

$
$

2,14 $
2,09 $

2,25 $
2,21 $

2,21 $
2,19 $

2,15
2,14

$
$
$

297,00 $
304,00 $
940,00 $

296,00 $
301,00 $
986,00 $

288,00 $
290,00 $
945,00 $

286,00
287,00
916,00

NEXT PLC BALANCE SHEET
Fiscal year ends in January. GBP in millions except per share data
Assets
Current assets
Cash and cash equivalents
Short-term investments
Total cash
Inventories
Prepaid expenses
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Land
Fixtures and equipment
Other properties
Property and equipment, at cost
Accumulated Depreciation
Property, plant and equipment, net
Goodwill
Intangible assets
Deferred income taxes
Prepaid pension costs
Other long-term assets
Total non-current assets
Total assets
Liabilities and stockholders' equity
Liabilities
Current liabilities
Short-term debt
Capital leases
Accounts payable
Taxes payable
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term debt
Capital leases
Deferred taxes liabilities
Minority interest
Other long-term liabilities
Total non-current liabilities
Total liabilities
Stockholders' equity
Common stock
Additional paid-in capital

2013-01

$ 136,00
$
22,00
$ 158,00
$ 332,00
$
87,00
$ 631,00
$ 1.208,00

2014-01

$ 273,00
$
1,00
$ 274,00
$ 386,00
$
94,00
$ 714,00
$ 1.468,00

$ 1.458,00 $ 1.494,00
$
78,00 $
84,00
$ 1.536,00 $ 1.578,00
$ (999,00) $ (1.069,00)
$ 537,00 $ 509,00
$
42,00 $
42,00
$
2,00 $
2,00
$
27,00
$
66,00 $
70,00
$
38,00 $
26,00
$ 686,00 $ 676,00
$ 1.894,00 $ 2.145,00

$
$
$
$
$
$

93,00
189,00
162,00
371,00
816,00

$
$
$
$
$
$

3,00
195,00
155,00
482,00
834,00

$
$
$

567,00 $ 801,00
$
4,00
$
$ 221,00 $ 223,00
$ 792,00 $ 1.024,00
$ 1.608,00 $ 1.858,00

$

1,00 $

1,00

Retained earnings
Accumulated other comprehensive income
Total stockholders' equity
Total liabilities and stockholders' equity

$ 1.904,00 $ 1.907,00
$ (1.619,00) $ (1.622,00)
$ 286,00 $ 286,00
$ 1.894,00 $ 2.145,00

2015-01

2016-01

$ 276,00
$
67,00
$ 342,00
$ 417,00
$
90,00
$ 767,00
$ 1.616,00

$
66,00
$
39,00
$ 105,00
$ 486,00
$
86,00
$ 964,00
$ 1.642,00

$
$
$
$
$
$
$
$
$
$
$
$
$

$
$
$
$
$
$
$
$
$
$
$
$
$

75,00
1.541,00
9,00
1.626,00
(1.122,00)
503,00
43,00
1,00
13,00
38,00
68,00
666,00
2.282,00

$
$
$
$
$
$

3,00
225,00
148,00
511,00
887,00

$

$

838,00 $

77,00
1.597,00
9,00
1.684,00
(1.147,00)
536,00
43,00
1,00
3,00
46,00
59,00
688,00
2.330,00

2017-01

$
50,00
$
34,00
$
84,00
$ 451,00
$
92,00
$ 1.034,00
$ 1.661,00

$ 1.703,00
$
88,00
$ 1.791,00
$ (1.212,00)
$ 579,00
$
44,00
$
(1,00)
$
63,00
$
59,00
$ 744,00
$ 2.405,00

342,00 $

$ 219,00
$ 142,00
$ 467,00
$ 1.171,00

35,00

$
$
$
$

186,00
133,00
370,00
725,00

615,00 $

914,00

$
6,00
$
$ 236,00 $ 233,00 $ 250,00
$ 1.074,00 $ 848,00 $ 1.169,00
$ 1.960,00 $ 2.018,00 $ 1.894,00
$
$

15,00 $
1,00 $

15,00 $
1,00 $

15,00
1,00

$ 1.886,00 $ 1.909,00
$ (1.580,00) $ (1.613,00)
$ 322,00 $ 312,00
$ 2.282,00 $ 2.330,00

$ 2.117,00
$ (1.622,00)
$ 510,00
$ 2.405,00

NEXT PLC Statement of CASH FLOW
Fiscal year ends in January. GBP in millions except per share data.
Cash Flows From Operating Activities
Stock based compensation
Inventory
Other working capital
Other non-cash items
Net cash provided by operating activities
Cash Flows From Investing Activities
Investments in property, plant, and equipment
Property, plant, and equipment reductions
Acquisitions, net
Other investing charges
Net cash used for investing activities
Cash Flows From Financing Activities
Long-term debt issued
Long-term debt repayment
Common stock issued
Repurchases of treasury stock
Cash dividends paid
Other financing activities
Net cash provided by (used for) financing activities
Effect of exchange rate changes
Net change in cash
Cash at beginning of period
Cash at end of period
Free Cash Flow
Operating cash flow
Capital expenditure
Free cash flow

2013-01

2014-01

2015-01

$ 18,00 $ 13,00
$ 40,00 $ (54,00)
$ (14,00) $ (40,00)
$ 615,00 $ 695,00
$ 659,00 $ 615,00

$ 10,00
$ (44,00)
$ 20,00
$ 757,00
$ 743,00

$ (82,00) $ (105,00)
$
5,00 $
$
2,00
$ (11,00) $
2,00
$ (86,00) $ (103,00)

$ (110,00)
$
2,00
$
7,00
$ (5,00)
$ (106,00)

$
$
$
$
$
$
$
$
$

43,00
(365,00)
(148,00)
(22,00)
(491,00)
82,00
49,00
131,00

$
$
$
$
$
$
$
$
$
$
$

250,00
(86,00)
43,00
(393,00)
(165,00)
(21,00)
(372,00)
(1,00)
140,00
131,00
271,00

$
$
$
$
$
$
$
$
$

45,00
(218,00)
(434,00)
(29,00)
(636,00)
1,00
2,00
271,00
273,00

$ 659,00 $ 615,00 $ 743,00
$ (82,00) $ (105,00) $ (114,00)
$ 577,00 $ 510,00 $ 630,00

W
2016-01
$
$
$
$
$

14,00
(57,00)
(185,00)
837,00
608,00

2017-01

TTM

$ 13,00 $ 14,00
$ 35,00 $
1,00
$ (123,00) $ (32,00)
$ 774,00 $ 772,00
$ 700,00 $ 755,00

$ (148,00) $ (157,00) $ (134,00)
$
$
3,00 $
2,00
$
8,00
$
$ (139,00) $ (154,00) $ (132,00)
$ 115,00 $
$
$ 53,00 $
$ (259,00) $
$ (568,00) $
$ (30,00) $
$ (689,00) $
$
$
$ (220,00) $
$ 273,00 $
$ 53,00 $

297,00
(328,00)
30,00
(238,00)
(314,00)
(31,00)
(584,00)
1,00
(38,00)
53,00
14,00

$
$
$
$
$
$
$
$
$
$

(213,00)
22,00
(64,00)
(290,00)
(38,00)
(582,00)
41,00
141,00
182,00

$ 608,00 $ 700,00 $ 755,00
$ (148,00) $ (157,00) $ (134,00)
$ 461,00 $ 542,00 $ 621,00

Growth Profitability and Financial Ratios for N
Financials
TTM
Revenue GBP Mil
Gross Margin %
Operating Income GBP Mil
Operating Margin %
Net Income GBP Mil
Earnings Per Share GBP
Dividends GBP
Payout Ratio % *
Shares Mil
Book Value Per Share * GBP
Operating Cash Flow GBP Mil
Cap Spending GBP Mil
Free Cash Flow GBP Mil
Free Cash Flow Per Share * GBP
Working Capital GBP Mil

4.045
33,5
792
19,6
614
2,14
1,02
47,6
287
2,08
754
-134
621

2017-01 2016-01 2015-01
4.097
4.176
4.000
33,8
34,8
33,6
828
867
812
20,2
20,8
20,3
635
666
634
2,19
2,21
2,09
0,78
1,97
1,41
62,2
73,6
290
301
304
0,79
1,46
700
608
743
-157
-148
-114
543
461
630
2,03
2,65
936
472
729

Key Ratios

P

Margins % of Sales
Revenue
COGS
Gross Margin
SG&A
R&D
Other
Operating Margin
Net Int Inc & Other
EBT Margin

TTM

Profitability
Tax Rate %
Net Margin %
Asset Turnover (Average)
Return on Assets %
Financial Leverage (Average)
Return on Equity %
Return on Invested Capital %
Interest Coverage

TTM

100
66,46
33,54
13,97
-0,02
19,59
-0,86
18,73

18,94
15,18
1,6
24,42
5,95
199,45
47,84
21,93

2017-01 2016-01 2015-01
100
100
100
66,16
65,22
66,41
33,84
34,78
33,59
13,67
13,91
13,53
-0,02
20,2
-0,92
19,29

-0,02
20,76
-0,74
20,02

-0,02
20,3
-0,43
19,87

2017-01 2016-01 2015-01
19,6
20,25
20,12
15,51
15,96
15,87
1,73
1,81
1,8
26,83
28,91
28,68
4,71
7,47
7,09
154,52
210,41
208,75
48,78
56,89
58,47
21,9
27,21
26,97

Key Ratios
Revenue %
Year over Year
3-Year Average
5-Year Average

Latest Qtr 2017-01 2016-01 2015-01
-1,91
4,43
6,95
3,09
5,44
5,14
3,55
4,84
3,26

10-Year Average
Operating Income %
Year over Year
3-Year Average
5-Year Average
10-Year Average
Net Income %
Year over Year
3-Year Average
5-Year Average
10-Year Average
EPS %
Year over Year
3-Year Average
5-Year Average
10-Year Average
Key Ratios
Cash Flow Ratios
Operating Cash Flow Growth % YOY
Free Cash Flow Growth % YOY
Cap Ex as a % of Sales
Free Cash Flow/Sales %
Free Cash Flow/Net Income
Key Ratios
Balance Sheet Items (in %)
Cash & Short-Term Investments
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Net PP&E
Intangibles
Other Long-Term Assets
Total Assets
Accounts Payable
Short-Term Debt
Taxes Payable
Accrued Liabilities
Other Short-Term Liabilities
Total Current Liabilities
Long-Term Debt
Other Long-Term Liabilities
Total Liabilities
Total Stockholders' Equity
Total Liabilities & Equity

TTM

2,24

3,01

3,42

-4,55
4,62
6,58
5,01

6,78
7,65
8,88
6,3

12,35
10,51
8,92
6,26

-4,72
4,72
5,99
6,72

5,02
9,44
10,7
7,84

14,77
10,16
11,76
7,59

-1,11
7,2
9,75
11,75

6,01
12,43
15,4
13,41

17,52
14,95
17,62
13,44

2017-01

3,31
15,35
1,01

3,83
13,24
0,85

2016-01

3,53
11,03
0,69

2015-01

2,84
15,74
0,99

Fin
Latest Qtr 2017-01 2016-01 2015-01
7,28
3,48
4,51
14,99
41,66
39,98
31,22
19,24
18,76
20,88
18,26
43,97
5,16
5,1
6,33
70,49
69,05
70,48
70,81
22,25
24,06
23,02
22,05
1,68
1,8
1,88
1,93
5,58
5,09
4,63
5,21
100
100
100
100
24,79
7,74
9,4
9,85
0,13
1,47
14,69
0,12
3,21
5,54
6,09
6,48
9,46
37,59
35,78
9,83
83,2
16,8
100

15,4
30,15
37,99
10,64
78,77
21,23
100

20,05
50,24
26,39
9,99
86,62
13,38
100

22,39
38,85
36,73
10,32
85,89
14,11
100

Liquidity/Financial Health
Current Ratio
Quick Ratio
Financial Leverage
Debt/Equity

Latest Qtr 2017-01 2016-01 2015-01
1,88
2,29
1,4
1,82
1,36
1,54
0,91
1,24
5,95
4,71
7,47
7,09
2,13
1,79
1,97
2,6
Key Ratios

Efficiency
Days Sales Outstanding
Days Inventory
Payables Period
Cash Conversion Cycle
Receivables Turnover
Inventory Turnover
Fixed Assets Turnover
Asset Turnover

Effi
TTM
99,38
66,76
85,96
80,18
3,67
5,47
7,19
1,6

2017-01 2016-01 2015-01
86,12
71,84
63,63
63,12
60,51
55,13
27,27
29,74
28,83
121,97
102,61
89,92
4,24
5,08
5,74
5,78
6,03
6,62
7,35
8,03
7,9
1,73
1,81
1,8

ncial Ratios for Next PLC
2014-01 2013-01 2012-01 2011-01 2010-01 2009-01 2008-01
3.740
3.563
3.441
3.297
3.407
3.272
3.329
33,2
31,6
30,4
29,3
29,3
27,8
28,5
722
695
601
566
529
478
537
19,3
19,5
17,5
17,2
15,6
14,6
16,1
553
508
474
401
364
302
354
1,78
1,56
1,38
1,08
0,93
0,78
0,83
0,5
0,42
0,36
311

326

345

371

392

388

425

614
-105
510

659
-81
577

525
-126
400

452
-144
307

572
-98
472

449
-120
328

477
-179
298

634

392

398

234

283

360

123

Profitability
2014-01 2013-01 2012-01 2011-01 2010-01 2009-01 2008-01
100
100
100
100
100
100
100
66,84
68,4
69,62
70,73
70,74
72,23
71,49
33,16
31,6
30,38
29,27
29,26
27,77
28,51
13,74
13,21
12,99
6,77
7,93
7,16
7,08
-0,07
19,33
-0,74
18,59

-0,02
19,51
-0,8
18,71

-0,04
17,49
-0,65
16,84

5,48
17,19
-0,71
16,48

5,55
15,55
-0,72
14,83

5,87
14,62
-1,51
13,11

5,97
16,13
-1,17
14,96

2014-01 2013-01 2012-01 2011-01 2010-01 2009-01 2008-01
20,43
23,69
25,07
27,66
27,96
29,5
28,95
14,79
14,28
13,8
12,16
10,69
9,24
10,64
1,85
1,9
1,89
1,89
1,97
1,93
2,08
27,4
27,15
26,05
23,01
21,08
17,84
22,12
7,49
6,63
8,33
7,72
12,68
12,52
193,43
200,12
208,75
219,24
265,57
985,02
643,23
56,27
57,65
57,13
55,97
51,41
43,76
52,86
28,48
28,32
23,99
25,15
19,37
9,73
12,94
Growth
2014-01 2013-01 2012-01 2011-01 2010-01 2009-01 2008-01
4,97
3,54
4,35
-3,19
4,13
-1,73
4,28
1,51
1,7
-0,32
1,23
1,74
2,71
1,37
0,94
1,2
3,57
5,39

4,04

4,93

6,28

7,58

9,1

10,2

3,99
8,44
8,61
6,77

15,5
9,47
5,29
8,71

6,18
7,96
3,47
8,81

6,98
1,81
3,79
10,45

10,77
1,44
3,67
11,54

-10,95
0,54
4,96
11,72

8,75
11,31
12,84
8,26

7,12
11,79
7,51
9,22

18,4
16,24
7,45
9,61

10,16
4,24
5,05
9,79

20,4
3,18
3,58
10,01

-14,6
-1,19
3,87
9,33

14,08
17,99
17,96
14,35

13,3
18,86
13,35
16,43

27,07
20,89
13,77
16,99

16,65
9,13
11,45
16,65

19,2
8,75
9,41
17,22

-6,54
7,34
10,86
16,57

Cash Flow
2014-01 2013-01 2012-01
-671
2,82
13,62
0,92

2,29
16,21
1,14

3,66
11,62
0,84

2011-01

4,38
9,33
0,77

2010-01

2,89
13,88
1,3

2009-01 2008-01
-599
3,69
10,03
1,09

5,39
8,95
0,84

Financial Health
2014-01 2013-01 2012-01 2011-01 2010-01 2009-01 2008-01
12,8
8,34
3,72
2,98
6,83
7,51
4,21
31,8
31,74
32,2
29,76
30,72
27,99
29,37
17,98
17,52
20,06
20,55
18,25
18,1
19,57
5,88
6,18
5,51
6,27
5,69
7,38
6,91
68,46
63,78
61,48
59,55
61,48
60,99
60,06
23,74
28,37
31,38
33,05
34,08
34,81
37,45
2,07
2,37
2,46
2,59
2,8
3,15
2,22
5,73
5,48
4,68
4,8
1,64
1,06
0,27
100
100
100
100
100
100
100
9,08
9,99
10,41
10,91
10,33
11,63
10,73
0,12
4,91
0,42
7
0,3
6,91
14,91
7,22
8,57
5,54
6,05
6,47
4,88
5,67
22,49
38,91
37,34
10,4
86,65
13,35
100

19,62
43,09
29,93
11,89
84,91
15,09
100

23,67
40,04
35,17
12,78
87,99
12,01
100

22,52
46,47
26,29
14,28
87,04
12,96
100

27,66
44,77
30,79
16,55
92,11
7,89
100

17,1
40,53
32,31
19,17
92,01
7,99
100

21,23
52,55
33,19
19,12
104,86
-4,86
100

2014-01 2013-01 2012-01 2011-01 2010-01 2009-01 2008-01
1,76
1,48
1,54
1,28
1,37
1,5
1,14
1,18
0,97
0,91
0,72
0,85
0,92
0,66
7,49
6,63
8,33
7,72
12,68
12,52
2,8
1,98
2,93
2,03
3,9
4,05
Efficiency Ratios
2014-01 2013-01 2012-01 2011-01 2010-01 2009-01 2008-01
62,61
61,37
59,95
58,3
54,27
54,19
51,93
52,37
52,7
56,38
52,99
47,54
49,26
46,08
28,03
28,63
29,6
28,99
28,77
29,33
26,78
86,95
85,43
86,72
82,31
73,04
74,12
71,22
5,83
5,95
6,09
6,26
6,73
6,73
7,03
6,97
6,93
6,47
6,89
7,68
7,41
7,92
7,15
6,37
5,86
5,64
5,73
5,35
5,76
1,85
1,9
1,89
1,89
1,97
1,93
2,08


Running head: NEXT PLC COMPANY FINANCIAL STATEMENT ANALYSIS

Next PLC Company Financial Statement
Analysis
Student’s Name
Institution Affiliation

NEXT PLC COMPANY FINANCIAL STATEMENT ANALYSIS

1

Table of Contents
Executive Summary .................................................................................................................................. 2
Next PLC Company Financial Statement Analysis ...................................................................................... 3
Introduction ............................................................................................................................................... 3
Strategic Capabilities and Overview of Management ............................................................................... 3
Strategies and Objectives ...................................................................................................................... 3
Sales and Profitability ........................................................................................................................... 4
Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis ................................................... 5
Strengths ............................................................................................................................................... 5
Weaknesses ........................................................................................................................................... 6
Opportunities......................................................................................................................................... 6
Threats................................................................................................................................................... 7
The Quality of Next PLC Company’s Management ................................................................................. 7
Next PLC Company Cash Flow Analysis ................................................................................................. 7
Cash Flow Generated from Operating Activities .................................................................................. 8
Cash Flow used in Investing Activities................................................................................................. 8
Cash Flow used in Financing Activities ............................................................................................... 9
Next PLC Company’s Capital Structure (Gearing and Share Ownership) ............................................... 9
NEXT PLC Financials and Forecasts ..................................................................................................... 11
Share price and earnings history forecast............................................................................................ 11
Share Price Performance of the Company .......................................................................................... 12
Next PLC Company valuation and justification of assumptions based on the performed analysis ........ 12
Recommendations ................................................................................................................................... 13
Conclusion .............................................................................................................................................. 14
References ............................................................................................................................................... 15

NEXT PLC COMPANY FINANCIAL STATEMENT ANALYSIS

2

Executive Summary
The preparation of financial statements is the work of accountants and financial officers. The
statements are always presented to the public for a publicly traded company without any manual
on the interpretation of the figures and terms used within the financial statements. A conduct of a
financial analysis is the interpretation and understanding of the presented financial statements of
an organization or company. The users of the financial statements include the shareholders of
Next PLC Company, the public to act as a guide in the purchase of shares, and the tax collection
agency in ascertaining whether accounting standards and policies are followed as required when
the books of accounts are generated and the preparation of financial statements. The report
contained in this paper offers a deep analysis of Next PLC Company financials and the use of
various figures as represented in the various reports. When a company is analyzed using its
financial statements, the performance in terms of share price and profitability becomes a major
concern of the stakeholders during an annual general meeting. This report will analyze the
various corporate operations conducted by Next PLC Company and its position. The major focus
will be on clothing that is Next PLC Company’s major objective and product line. A brief history
and background of Next PLC Company will also be provided alongside the prevailing market
conditions.

NEXT PLC COMPANY FINANCIAL STATEMENT ANALYSIS

3

Next PLC Company Financial Statement Analysis
Introduction
Next PLC Company was founded in 1864 by Joseph Hepworth and registered as a
tailoring business. The main products and market for Next PLC Company has maintained to be
clothing. On this report the main focus will be an analysis of Next PLC Company’s clothing
products being the company’s major brand in the market. Despite Next PLC Company starting as
a small tailoring business venture that was started in 1864, the company now stands and is an
affiliate of the FTSSE 100 index and generates an average annual net profit of $550 million.
Having a unique set of attributes has helped Next PLC Company navigate towards its success
that indicate both a good market share structure and a promising future. Conversely, Next PLC
Company performs its operations under the uncertainty of clothing strategies that have been hard
hit by new fashions created by competitors. As a result, NEXT PLC has experienced a decline in
clothing prices and less demand than the past periods. The financial statements analysis will
create a level ground to understand operations and transactions taking place at NEXT PLC as it
will offer detailed and exact opinions based on the historical data and forecasts that give a picture
for the future NEXT PLC.
Strategic Capabilities and Overview of Management
Strategies and Objectives
Strategies and sets of methods used by any company or organization in the performance
of its operations and execution of duties. Objective are the aims that must be met within a set
period of being in operation. A major objective to Next PLC Company is the delivery of longterm returns to the stakeholders of the company using better growth earnings methods in
earnings per share and the disbursement of dividends on a higher rate that keeps growing with

NEXT PLC COMPANY FINANCIAL STATEMENT ANALYSIS

4

time due to better strategies formation and good managerial skills deployment (Thompson, &
McLarney, 2017). Some of the strategies applied by Next PLC Company include:
✓ Making developments on the range of products to increase sales revenue
✓ Checking on profitability issues to maintain and increase the current retail space in
selling. The set stores appraisals must be able to meet the set financial demand criteria
before setting up any investment.
✓ The NEXT directory clients to be increased in accordance with their spending behaviors
within the United Kingdom and the global sector. The global sales increase can be done
through social media marketing and purchasing of products online through a launch of ecommerce platform that can help to capture many clients across the world where
shipment of order can be arranged by Next PLC Company through the available and
economical cargo transportation companies.
✓ The sourcing of efficient products must be performed to help Next PLC Company
increase its gross and net margins through a better control over cost and the management.
✓ Customer care services should be improved to offer a 24/7 service all the days because of
the expansion to the international market where people will need to shop using their
computers, laptops, and other android gadgets in adding items to their carts and goods
delivered at their desired destinations of convenience.
✓ Making use of a secure financing structure and preparation of efficient balance sheets that
can offer s better financial position of the Next PLC Company.
Sales and Profitability
The general performance of NEXT PLC Company can be viewed on a quick note and
determined to be doing well in terms of revenue. Sales have shown a stable revenue collection

NEXT PLC COMPANY FINANCIAL STATEMENT ANALYSIS

5

that is constant since 2015 through to 2017. Such a stable income indicates customers are
retained and treated well to keep coming back in doing business with NEXT PLC. The
profitability of NEXT PLC has been performing well in the same manner revenue has been
maintained since 2015 through to 2017. The constant figure shoe a strong management team and
strict policies of running the company. Considering the large number of staff and clients to serve,
the use of key performance indexes (KPIs) has helped in controlling and managing operations
(Key note publications Ltd, 2000). Delegated tasks must be performed and results shown and
reported to the responsible authority.

Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis
Strengths
Next PLC Company targets a top end mass market with its brand. However, some of the
advantages NEXT will utilize in achieving their target in capturing more clients in the market
will require a fast knowledge of the market and understanding of customer needs. The evaluated

NEXT PLC COMPANY FINANCIAL STATEMENT ANALYSIS

6

strengths available for NEXT to take advantage of in the market include its VALUE for money,
personal STYLE and good QUALITY (NEXT Annual Report, 2000). The facilitating factor to
NEXT having such a strength in the market is through designing of unique products and selling
them in the market under NEXT PLC Company’s label. Due to the advantage of having an
extended market overview, NEXT PLC Company enjoys the ability to make recognitions of
customer behavior and wishes on various products and implements change to meet customer
needs. The quick adaptation of changes in the market offers NEXT PLC Company an invaluable
advantage and saves time.
Weaknesses
In some instance, the regular and frequent clients to NEXT PLC Company get obliged to
stopping and making purchases at the stores of NEXT PLC competitors. An investigation onto
this act was done and found to be the incompleteness of product ranges that NEXT offers ...

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Review

Anonymous
Excellent job

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