Financial Analysis - 2604 Words

financial analysis By: andreas ioannides E-mail: TABLE OF CONTENTS. INTRODUCTION. PROCEDURE. FINDINGS. 1.0 INVESTMENT RATIOS - MEASURES OF EFFICIENCY. 1.1 Earnings per Share. 1.2 P/E Ratio or Price / Earnings Ratio 1.3 Dividend Yield. 1.4 Dividend Cover. 2.0 PRIMARY OPERATING RATIOS - MEASURES OF EFFICIENCY. 2.1 Return on Capital Employed 2.2 Debtors Turnover Ratio 2.3 Creditors Turnover Ratio 2.4 Return on Shareholders Fund 3.0 PRIMARY FINANCIAL RATIOS - GEARING AND LIQUITY. 3.1 Gearing Ratio 3.2 Liquidity Ratio 3.2.1 Current Ratio†¦show more content†¦On 5th of February 1998, the shareholders approved a share consolidation to reflect this return of value. As a consequence, 1,718 billion new ordinary shares of 11 pence each, a reduction of 15 per cent in the total number of ordinary shares in issue. 1.4 Dividend Cover. Dividend Cover compares net profit with dividends to show how many times over the dividends could be paid and how safe this annual yield is. With other words, the dividend cover shows how many times a dividend covered by earnings after tax profit. Earnings per share Dividend Cover = Net dividend per share The recommenced final divided of 7.24 pence net per ordinary share, with the interim dividend of 4,83 pence net paid on 17th of February 1998, brings the total ordinary dividend for the year to 12.07 pence net per ordinary share. This represents an increase of 8.4 per cent over 1996/97. Dividend cover, excluding the exceptional profit relating to Energis was 1.6 times. 2.0 PRIMARY OPERATING RATIOS - MEASURES OF EFFICIENCY. 2.1 Return on Capital Employed (ROCE). The ROCE is a fundamental measure of the profitability of a company. 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