STRATEGIC FINANCIAL MANAGEMENT

Strategic Financial Management

Strategic Financial Management

Part I

In today's time, not only are companies and organizations associated with their current performance, but are also able to tap into the development and the establishment of a strong and constructive outcome by viewing and changing the necessary results and outcomes that would not only add to the company, but would also make way for adding to the community at large with the progress paving underway for long-term prosperity ahead.

Considering the issues and the problems and the situations that have come across in front of us, it becomes evident that the financial performance of the company is a hybrid and an output of multiple factors that play their role in order to create and develop the necessary results and outcomes for both the company and the investors that are associated with the organization (Weygandt, Kieso & Kell, 1996, p. 800).

Before interpreting ratios, it requires understanding the forces that are at play. To begin, the nature of business that is being established implies the corresponding performance that has been intended requires a detailed analysis and interpretation. The portfolio of a company located in the telecom industry would be vastly and completely different from a company that is ruling and running the energy industry.

The second most important factor implies the size of the company. Portfolio and capital structure are essential characteristic which shall defined and identify the necessary results and outcomes which not only would provide for the creation of analyzing a company's performance and also their contribution towards the growth of the industry.

However, apart from the characteristics and traits above, financial performances are being judged and monitored through a defined set of ratios and mathematical formulae that not only would be able to yield first-hand knowledge regarding the company performance, but that analysts and researchers are also able to assess the strengths and the capacities of the company and its ability to sustain in the long-run (Williams, Haka, Bettner & Carcello, 2008, p. 266).

For this paper, our focus and analysis revolves around Balfour Beatty PLC, which not only would help us develop our analysis, but would also provide for the creation and the establishment of a strong and constructive outcome, yielding insight into company performance. Our prime motivation and objective is to cover maximum ratios and make way for assessing and analyzing company from all possible perspectives.

Profit & Loss Ratios

 

2008(366)

2009(365)

2010(365)

2011(365)

2012*

Margin

%

1.49

1.16

1.47

1.58

Dividend per Share (DPS) Growth

%

22.48

10.04

6.52

5.71

8.88

Dividend Cover

x

2.62

2.17

2.13

2.11

2.57

Norm EPS Growth

%

-28.35

-8.82

4.75

4.46

32.64

Reported EPS Growth

%

-75.66

To begin with, we begin with the most basic set of ratios, symbolizing profit and loss. These would help us understand the trends and make way for us to interpret the current position and situation of the company.

Through the interpretation of the reported negative EPS, it clearly shows the company is losing money and real fast. To look at the statistics, even though the company displays dividend cover in a positive direction, but the normal trends prevalent in the negative EPS provide for ample evidence, preferably due to the smash of the year of financial meltdown ...