ADVANCED FINANCIAL REPORTING

Cermar Plc

Cermar Plc

Introduction

The study is related to the financial analysis of the Cermar Plc which is a UK based retail company. The company deals in the three different segments that are Food, Clothing and Household.

It is observed from the past trends that the Food and Household segments of the company are not showing the encouraging results as there is a lot of competition company is facing in the food sector and in the Household segment, Cermar Plc is incurring the additional cost due to which the profitability situation of the company is getting affected; furthermore, the sales of the company is also declining. However, the positive sign for the Cermar Plc is that the Clothing segment of the company is performing well and it is anticipated that this trend will continue. The clothing segment is situated all over the United Kingdom and also is in the mixed economy areas. In addition to this, Cermar Plc keep its close eye on the competition to make sure that the company match prices with the competitors and keep their stock up to date. They have reduced prices in the current year to encourage customers to buy; hence the Cermar Plc is working on the strategy of price competitiveness due to which the company has bright chances of increasing sales through this segment.

Forecasting of Cermar Plc Financials

These are the forecaseted financials for Cemar PLc. For comprehensive working and calculations, kindly refer to the excel sheet attached.

Cemar Plc

INCOME STATEMENT/STATEMENT OF COMPREHENSIVE INCOME

YEAR ENDED 31 December 2010

£000's

REVENUE

2920.2

COST OF SALES

-1949.7

GROSS PROFIT

970.5

OPERATING EXPENSES

-867.2

OPERATING PROFIT

103.3

FINANCE COSTS

49.2

PROFIT BEFORE TAX

54.1

TAXATION

-2.3

PROFIT FOR THE PERIOD

56.4

OTHER COMPREHENSIVE INCOME

REVALUATION

0.0

TOTAL COMPREHENSIVE INCOME

56.4

Cemar Plc

STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2009

NON CURRENT ASSETS

TANGIBLE

3470.7

 

3470.7

CURRENT ASSETS

INVENTORIES

207.68

TRADE RECIEVABLES

203.16

SHORT TERM DEPOSITS

145.2

CASH

4.3

560.34

TOTAL ASSETS

4031.0

EQUITY

ORDINARY SHARE CAPITAL

1466.3

SHARE PREMIUM ACCOUNT

836.8

REVALUATION RESERVE

328.0

RETAINED EARNINGS

1024.8

3655.9

NON CURRENT LIABILITIES

93.1

CURRENT LIABILITIES

180.62

TOTAL EQUITY AND LIABILITIES

3929.6

Statement of Change in Equity

Ord

Share

Rev

Retained

Total

Shares

Premium

Reserve

Earnings

Opening Balance

1436.3

786.8

328

996.6

1702.4

Share Issue

30.0

50.0

80

Revaluation

0.0

0.0

Profit for year

56.4

56.4

Dividend paid

 

 

 

-28.2

-28.2

Closing Balance

1466.3

836.8

328.0

1024.8

1810.6

Cemar Plc

STATEMENT OF CASH FLOWS

AS AT 31 December 2010

Cash Flows from Operating Activities

Net profit before Tax

54.1

Finance cost

49.2

Depreciation

373.4

Goodwill impair

0.0

Loss on disposal

-25.4

451.3

Inventories

336.0

Recievables

184.5

Payables

-57.2

Accruals

-0.2

Cash Generated from operations

914.4

FINANCE COSTS

-72.6

INCOME TAXES

-72.6

 

INVESTING ACTIVITIES

769.2

CASH FOR PPE

0.0

SALE OF PPE

46.6

CASH FLOW BEFORE FINANCING

46.6

FINANCING ACTIVITIES

815.8

DIVIDENDS

-28.2

SHARE ISSUE

80.0

DEBT REDUCING

-93.2

-41.4

INCREASE IN CASH

AND CASH EQUIVALENTS

774.4

CASH AND CASH EQUIVALENTS AT START OF YEAR

177.1

951.5

CASH AND CASH EQUIVALENTS AT END OF YEAR

149.5

CASH AND CASH EQUIVALENTS AT START OF YEAR

Start

Cash at bank

0.5

Cash Deposit

198.7

Bank overdraft

-22.1

177.1

CASH AND CASH EQUIVALENTS AT START OF YEAR

Cash at bank

4.3

Cash Deposit

145.2

Bank overdraft

0

149.5

Notes and Workings

Cost

Land and

Plants

Equipment

Total

Property

£000's

£000's

£000's

£000's

Opening

2864.6

1080.2

889

4833.8

Additions

0.0

Disposals

-30

-30.0

Revaluation

0.0

 

 

0.0

2864.6

1080.2

859.0

4803.8

Depreciation

Opening

347

290.9

350.6

988.5

Disposals

-28.8

-28.8

Charge for year

16.4

204.5

152.5

373.4

363.4

466.6

503.1

1333.1

NBV

2501.2

613.6

355.9

3470.7

Note 2: Analysis of Current Liabilities

Current Liabilities

£000's

Trade Payables

73.9

Accruals

72.614

Debenture Int

10.1

Taxation

24.0

180.61507

Note 1: Segmental Analysis year ended 31 December 2010

Food

Clothing

House Hold

Total

£000's

£000's

£000's

£000's

Revenue

1100.0

1181.5

638.8

2920.2

Cost of Sales

-679.6

-695.4

-574.7

-1949.7

Operating Expenses

-268.9

-336.6

-261.7

-867.2

Operating Profit

151.5

149.4

-197.7

103.3

Finance

Tax

Opening

-33.5

-98.9

given

Cash

72.6

72.6

Closing

10.1

24

49.2

-2.3

Inventories

Receivables

Payables

Accruals

Opening balance sheet

543.7

387.7

-131.1

72.4

Closing balance sheet

-207.68

-203.16

73.90107

-72.614

336.0

184.5

-57.2

-0.2

Discussion

Financial forecast means a look at the future and predict what will be the financial situation be at any given time. Since something can not be readily and beyond anyway can not be predicted with certainty, it requires a first ever financial planning. Financial planning is the path on the basis of which one can provide a financial forecast. The following steps are considered: The insertion of a target, analyzing the output of the current situation, a prediction regarding the future capital needs and the ...