FINANCIAL ANALYSIS REPORT OF DOMINOS PIZZA - Free Essay Example

Sample details Pages: 4 Words: 1238 Downloads: 8 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? This provides the portion of the current liability of Dominos Pizza Group which can be settled with its current assets earnings. This shows the ability of Dominos to meet its short-term debt contracts with the available current liability as the fall due. From the above table, Dominos Pizza Group had a current ratio of 0.69 in 2009 as compared to the 1.01 and 0.92 in years 2008 and 2007 respectively. The 0.69 in year 2009 shows that Dominos is not liquid enough to meet its short term debt obligations as at 2009 despite it being better than the SHS Pizza Ltd at 0.18 times in the same year. With its brilliant performance in year 2008 at 1.01times, in 2007 it went slightly below its ability to cover the current liability with its current assets at 0.97 times unlike the SHS Pizza ltd which had a better performance in ratio of 1.29 times in 2007. (Tracy J,2008 P287). Don’t waste time! Our writers will create an original "FINANCIAL ANALYSIS REPORT OF DOMINOS PIZZA" essay for you Create order Liquidity Ratio Company 2009 2008 2007 Dominos Pizza 0.64 0.97 0.85 SHS Pizza Ltd 0.12 0.16 1.17 The ability for Dominos Group to repay short-term creditors out of its available total cash is less than the general threshold of 1.00. In 2007, Dominos had a liquidity ratio of 0.85 and increased to 0.97 in 2008 but fell drastically in 2009. Comparatively, its mirror company, the SHS Pizza limited performed better being able to cover its short term liabilities fully by 1.17x in 2007. However, SHS Pizza ltd also had a drastic fall from 1.17x in 2007 to 0.16x and 0.12x in 2008 and 2009 respectively. (www.advfn.com) Capital Structure and Solvency Gearing (%) Company 2009 2008 2007 Dominos Pizza 413.87 321.59 435.34 SHS Pizza Ltd 988.47 665.44 175.68 From the balance sheet of Dominos plc, it can be seen that it had a long term debt of 18million in 2007 which reduced further to 9million in 2007 and was eventually cleared in 2009. On measuring the amount of capital that is borrowed, the gearing ratio for Dominos Pizza as at 2007 was 435.34% falling slightly to 321.59% and 413.87% in 2008 and 2009 respectively. With this high gearing, it indicates that the proportion of Dominos group borrowed capital is high. However its mirror company, the SHS Pizza ltd had a reasonably lower gearing ratio of 175.68% in 2007 increasing significantly to 988.47% in 2009. These figures show how prone both Dominos Group and SHS pizza ltd is to financial distress. Borrowing is a risk to Dominos because of the associated high interest payables and therefore Dominos will be in a dangerous position if the interest rate increases. (www.bized.co.uk). Interest Cover Company 2009 2008 2007 Dominos Pizza 62.00 30.25 41.72 SHS Pizza Ltd n/a n/a n/a Talking of interest, the interests cover for the Dominos group has improved significantly over the last three years. In 2007 it had 41.72x but dropped to 30.25x in 2008, it later got better in 2009 with a 62x cover. This is a good indicator that Dominos group is able to pay its interest with its available operating profit. This significant improvement could be as a result of effective control of Dominos expenses and the consistent increase in turnover of 92,018 in 2007 to 128,076 in 2009. (www.bized.co.uk). Operating Efficiency Stock Turnover Company 2009 2008 2007 Dominos Pizza 54.99 52.07 44.67 SHS Pizza Ltd n/a n/a n/a As at 2007, Dominos Pizza plc had a stock turnover of 44.67days. It began to increase to 52.07 days in 2008 and again increased further to 54.99 days in 2009. This means that it is holding stock for longer than the previous years and could consequently increase the cost for holding these stocks. It is therefore important that the Dominos Pizza Group improves on its stockholding period so as to reduce its associated costs. All other things being equal, as Dominos products is food and can easily spoil, it is necessary that the stockholding period be reduced to avoid bulk waste of products and as a result material costs. Debtor Collection (days) Company 2009 2008 2007 Dominos Pizza 7.34 11.11 14.71 SHS Pizza Ltd n/a n/a n/a Dominos Pizza was able to get cash from its debtors within 14.71 days in 2007, in 2008 it was able to retrieve 11.11days whereas in 2009 was 7.34 days. From the above table, Dominos Group has been able to maintain a healthy improvement in its debtors collection days from 14.71days in 2007 to 7days in 2009. It is therefore important that customers of Dominos Pizza pay earlier so that this can be used to pay-off it trade creditors on time as well. Creditors Payment (days) Company 2009 2008 2007 Dominos Pizza 23.84 21.54 21.40 SHS Pizza Ltd n/a n/a n/a Dominos Pizza Group has been able to maintain a longer period in paying of its creditors. In 2007, it took about 21.40 days for Dominos Group to pay of its creditors. This further increased to 23.84 days in year 2009. If Dominos is able to get more credit period, it will be able to use the available funds to maintain growth until the payment period is dew. Despite it being a good business practice for Dominos Group to get longer payment period in settling its debt, it is also ethical that it pays it debt on or before time. Profitability Turnover The Dominos Pizza has sustained turnover growth for the past three years rising from 92,018 in 2007 to 128,076 in 2009. The turnover is entirely the sale made from the United Kingdom with a zero sales from oversees for the whole three years. The increase in sales was basically due to a higher demand of Dominos Pizza in the UK whereas the Zero sales in the overseas is as a result of unawareness of the Dominos Pizza in the oversees. Profit Margin (%) Company 2009 2008 2007 Dominos Pizza 24.05 18.43 18.32 SHS Pizza Ltd n/a n/a n/a www.fame.bvdep.com From the table above, the Dominos Pizza has been able to maintain a profit margin of 18.32% in 2007 and growing further to 24.05% in 2009. This is as a result of the efficient control of the cost of sales and other expenses like the administration expenses for the past three years plus an outstanding increase in revenue from 92,018 in 2007 to 128,076 in 2009. (Kimmel PD, etal (2008) Accounting p243). Gross Margin (%) Company 2009 2008 2007 Dominos Pizza 41.05 39.74 39.94 SHS Pizza Ltd n/a n/a n/a Similarly, changes in the gross margin will be as a result of changes in the Dominos Pizza group turnover and cost of goods sold. From the above table and diagram, we can see that the year 2007 had a gross margin percentage of 39.94% slightly dropped to 39.74% in 2008 and later rose to 41.05% in 2009. The cost of sale comprised of 60.6% in sale as at 2007 and a 59% in 2009. In the same period there was no information disclosed for public use for its mirror company, the SHS Pizza. Return on Capital Employed (%) Company 2009 2008 2007 Dominos Pizza 112.58 149.71 418.60 SHS Pizza Ltd n/a n/a n/a In 2007, Dominos Group had a good return on capital employed of around 418.60%. Despite the slight reduction, it continued to maintain a higher than 100% ROCE in the years 2008 and 2009 with 149.71% and 112.58% respectively. However using the ratio pyramid, the product of net assets turnover and the profit margin will give us the Return on Capital Employed. This is depicted in the table below; Calculation of the Return on capital employed 2009 2008 2007 Net Assets Turnover 4.68 8.12 22.85 Profit Margin 24.05 18.43 18.32 Return on Capital Employed 112.55 149.65 418.61 Here, any change on the return on capital employed comes as a result of change in either the net assets turnover or the profit margin. From the above, it is the constant fall in the net assets turnover from the 22.85 in 2007 to 4.68 in 2009 which contributed to the fall in the ROCE from 418.6% in 2007 to 112.5% in 2009. On the other side, the profit margin continued to maintain improvement. The averagely high performance in ROCE indicates that, Dominos make good use of its assets well in profit creation. (Bedward and Strdwick 2004 p53)

Essay on aALCOHOL SHOULD BE BANNED - 569 Words

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Parallels Between the United States of America and Canada

There are many parallel between the United States of America and Canada. For instance they were both former possessions of the British crown, they speak mostly English, and they both had to deal with Native Americans. But one important difference is how they treated their native population during Western expansion. The Americans treated the Natives Americans like they were below them. The made treaties with the natives only to ultimately break them, the engaged in open war with the natives, and generally didn’t respect them. While, in direct contrast, the Canadians honored treaties, generally did not engage in war with the natives, and respected them as individuals. According to Keith Walden, who is a history professor at Trent†¦show more content†¦Another important factor during Western expansion was the role of the American sheriff. This person was responsible for upholding the law and keeping order. The sheriff was sometimes elected but more often than not he was put into place by the elite who were in charge of the local municipality. This often led to incompetence and corruption. Consequently, this meant that Indian relations suffered. Indians were not treated with the respect that they deserved, and were often taken advantage of. On the other side of the 49th parallel this was a vastly different story. In Canada the North West Mounted Police, a British tradition, and former Indian relations seemed to be the major reasons that the Indians were treated differently. The North West Mounted Police, or the Mounties, had a similar role to that of the American Sheriff. They were in charge of maintaining law and order, but they were also responsible in maintain the border between the United States and Canada. This was a physical geographic border, but also a border, or different identity, between what it meant to be Canadian and what it meant to be American. 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Complexities Directly Related to the Crucifixion of Jesus...

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Henrik Ibsen s A Doll House - 799 Words

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Interest Rates and Bond Valuation free essay sample

As a consumer, the effective annual rate is the more important rate since it represents the rate actually paid or earned. Â  110. You are considering two annuities, both of which make total annuity payments of $10,000 over their life. Which would be worth more today: annuity A, which pays $1,000 at the end of each year for the next 10 years, or annuity B, which pays $775 at the end of the first year, but the annuity payment grows by $50 each year, reaching $1,225 at the end of year 10? Are there any circumstances in which the two would be equal? Explain. The second annuity weights its payments more toward the back of the period, rather than the front, making it less valuable unless the discount rate is zero. Some students may get tripped up by the fact that the two annuities have the same total payments. This would clearly demonstrate a lack of understanding of the time value of money. We will write a custom essay sample on Interest Rates and Bond Valuation or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page There are three factors that affect the present value of an annuity. Explain what these three factors are and discuss how an increase in each will impact the present value of the annuity. The factors are the interest rate, payment amount, and number of payments. An increase in the payment and number of payments will increase the present value, while an increase in the interest rate will decrease the present value. There are three factors that affect the future value of an annuity. Explain what these three factors are and discuss how an increase in each will impact the future value of the annuity. The factors are the interest rate, payment amount, and number of payments. An increase in any of these three will increase the future value of the annuity. Should lending laws be changed to require lenders to report the effective annual rate rather than the annual percentage rate? Explain the reasoning for your answer. It would be more meaningful for consumers to know the effective annual rate rather than the annual percentage rate. The effective annual rate is slightly more difficult to calculate and also more difficult to explain, and may add confusion to the loan process. However, regardless of the costs, it would appear that consumers would benefit from learning what the effective annual rate is as opposed to the annual percentage rate. Annuity A makes annual payments of $813. 73 for each of the next 10 years, while annuity B makes annual payments of $500 per year forever. At what interest rate would you be indifferent between the two? At interest rates above this break-even rate, which annuity would you choose? How about at interest rates below the break-even rate? This requires the students to actually use the present value formulas, setting the present value annuity equal to the present value of a perpetuity and solving for the interest rate that makes the two equivalent. The first step is recognizing that the indifference point occurs when the two present values are equal. The break-even rate is 10 percent: below that rate, the perpetuity is better, while above that rate, the 10-year annuity is preferred. Â  A friend who owns a perpetuity that promises to pay $1,000 at the end of each year, forever, comes to you and offers to sell you all of the payments to be received after the 25th year for a price of $1,000. At an interest rate of 10 percent, should you pay the $1,000 today to receive payment numbers 26 and onwards? What does this suggest to you about the value of perpetual payments? The present value of the perpetuity is $10,000, and the present value of the first 25 payments is $9,077. 04, thus you should be willing to pay only $922. 96 for payments 26 and onwards. This suggests that the value of a perpetuity is derived primarily from the payments received early in its life, and the payments to be received later have little worth today

Kidney Stone Ncp free essay sample

Kidney Stone Care Plan Admitting Diagnoses: Client not being admitted at this time Current Diagnosis: Ureteral Calculi Other Medical Diagnoses: HTN, Hyperlipidemia, Kidney stones, Smokes Tobacco, Tonsillectomy-child age yrs. Pathophysiology: Urinary calculi are solid particles in the urinary system. They may cause pain, nausea, vomiting, hematuria, and, possibly, chills and fever due to secondary infection. Diagnosis is based on urinalysis and radiologic imaging, usually noncontrast helical CT. Treatment is with analgesics, antibiotics for infection, and, sometimes, shock wave lithotripsy or endoscopic procedures. About 1/1000 adults in the US is hospitalized annually because of urinary calculi, which are also found in about 1% of all autopsies. Up to 12% of men and 5% of women will develop a urinary calculus by age 70. Calculi vary from microscopic crystalline foci to calculi several centimeters in diameter. A large calculus, called a staghorn calculus, can fill an entire renal calyceal system. About 85% of calculi in the US are composed of Ca, mainly Ca oxalate. We will write a custom essay sample on Kidney Stone Ncp or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Composition of urinary calculi; 10% are uric acid; 2% are cystine; most of the remainder are Mg ammonium phosphate (struvite). General risk factors include disorders that increase urinary salt concentration, either by increased excretion of Ca or uric acid salts, or by decreased excretion of urine or citrate. Urinary calculi may remain within the renal parenchyma or renal pelvis or be passed into the ureter and bladder. During passage, calculi may irritate the ureter and may become lodged, obstructing urine flow and causing hydroureter and sometimes hydronephrosis. (Preminger, MD, 2012) Common areas of lodgment include the ureteropelvic junction, the distal ureter, and the ureterovesical junction. Larger calculi are more likely to become lodged. Typically, a calculus must have a diameter gt; 5 mm to become lodged. Calculi ? 5 mm are likely to pass spontaneously. Even partial obstruction causes decreased glomerular filtration, which may persist briefly after the calculus has passed. With hydronephrosis and elevated glomerular pressure, renal blood flow declines, further worsening renal function. Generally, however, in the absence of infection, permanent renal dysfunction occurs only after about 28 days of complete obstruction. Secondary infection can occur with long-standing obstruction, but most patients with Ca-containing calculi do not have infected urine. Preminger, MD, G. M. (n. d. ). Nephrolithiasis; stones; urolithiasis. Retrieved from http://www. merckmanuals. com/professional/genitourinary_disorders/urinary_calculi/urinary_calculi. html Textbook clinical symptoms: The major manifestation of stones is severe pain, commonly called renal colic. Flank pain suggests the stone is located in the kidney or upper ureter. Flank pain that extends toward the abdomen or to the scrotum and testes or the vulva suggests that stones are in the ureters or bladder.