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Financial Analysis for Breedon Group PLC

FINANCIAL ANALYSIS 1
Financial Analysis for Breedon Group PLC
By (Student’s Name)
University Affiliation
Subject Code
(Date)
FINANCIAL ANALYSIS 2
Executive Summary
This analysis looks at the horizontal and the vertical analysis of the financial statements of the
company as compared to the industry performance, and in this case, a similar company by the
name TJ Corporation. Afterwards, the paper looks at the various financial ratios that the
company uses and are comparable to the industry under Breedon Group operates in. Financial
Ratio analysis offers an important insight into how a company’s performance against a number
of key indicators at each given financial year. Having a better and keen understanding of a
company’s performance through looking at the various ratios therefore helps investors, market
analysts, lenders and any other interested parties make informed decisions and judgement before
committing to engage with the company (Gil, 2005). The use of ratio analysis offers a regrouped
data that is given with information that can be easily understood by the users who would
otherwise not be able to digest the available data presented raw from the financial statements.
The financial ratios that the study apply to the analysis to ascertain the soundness or the
weakness of the chosen company are as follows; a) ratios that show the profitability of the
company, b) current ratios, c) liquidity ratios, and Market ratios.
FINANCIAL ANALYSIS 3
Table of Contents
Executive Summary ........................................................................................................................ 2
1.0 Introduction ............................................................................................................................... 4
a) Horizontal Analysis of the Financial Statements .................................................................... 4
b) Vertical Analysis ..................................................................................................................... 6
2.0 Financial Ratio .......................................................................................................................... 8
3.0 Stock Analysis .......................................................................................................................... 9
Reference List ............................................................................................................................... 10
APPENDIX ................................................................................................................................... 11
1. FINANCIALS ....................................................................................................................... 11
2. Financial Statements ............................................................................................................. 16
3. Key Ratios ............................................................................................................................. 17
4. 0 Analysis .............................................................................................................................. 21
5. Stock Analysis ....................................................................................................................... 24
FINANCIAL ANALYSIS 4
1.0 Introduction
Breedon Group PLC is a private company that trades in the production of construction materials
in the UK. The company was formerly known as Breedon Agreegates before changing its name
to Breedon Group PLC. In its operations, the business has a number of plants and terminals that
it operates (Breedongroup, 2017). It has a cement plant together with two cementitious terminals
for imports. It also operates close to sixty quarries within the country. To cement its place as a
giant in the construction industry, the company has three plants for concrete production, thirty
plants for asphalt production and over 200 plants for the production of ready mixed concrete
(Breedongroup, 2017. It produces brands that are sold in the following segments; Breedon
Northern, Breedon Southern as well as the Hope cement brand. In addition, the company
produces cementitious products, sand and gravel, concrete and mortar, crushed rocks among
others (Breedongroup, 2017).
In respect to the company’s operations mainly within the geographical areas of the United
Kingdom and Scotland, the company falls under the medium range companies that are listed
within the London Stock Exchange. This study therefore looks at the financial soundness of the
company through a thorough and in depth analysis of the company’s financial statements (LSE,
2017). The study focuses on the financial strength and weakness within the financial statements
of the company using key indicators and financial ratios compared to prior years’ performances
as well as the industry performance within the sector in which Breedon Group PLC operates.
a) Horizontal Analysis of the Financial Statements
Horizontal analysis tends to focus on the changes and the trends that occur in the items on
financial statements over a period of time. Together with the slight differential in the dollar
values in the statements, the horizontal analysis helps the users of the financial statements to
FINANCIAL ANALYSIS 5
have a wide scope of events that happen over duration of time. Perhaps the users are able to
identify a positive trend or those trends that trouble the company or the industry at large.
The horizontal analysis of Breedon Group PLC and TJ Corporation is used as a comparative
model company in analyzing the performance of Breedon Group PLC. Some very interesting
trends can be noted from the above analysis. The amount of dollar and the percentage of each of
the financial statement can be noted to have slightly dropped for Breedon Group PLC as
compared to the performance of TJ Corporation. In 2013, when the net sales revenue dropped by
1% of the base year, 2012, the net income dipped by a total of 10 % for Breedon GroupPLC.
While in 2016, the same company experienced a reduction of its sales revenue by 0.0004%, the
reduction on the net income also slightly reduced by 2%.
The same cannot be said of TJ Corporation which had a good run in 2013, with a significant
increase by 12% on the base year which subsequently reflected on its net income which
increased by 27% in the same year (LSE, 2017). For the year 2016, the same growth that was
experienced in the previous year was replicated on the performance. The overall net sales
increased by 6% and the general reflection on the sales were an increase by of the net income by
twice the percentage increment (LSE, 2017). Perhaps the reduction in sales for both corporations
for the year between 2013 and 2014 is an indicator of the turbulent trading period that the
industry faced during the period (LSE, 2017).
The horizontal analysis offers the best way to look at the individual aspects of the elements that
contribute to the reduction of the net income across the years (Financial Times, 2017). From the
Horizontal chart above, increment and decrease in such elements like operating expenses and
taxes do indicate what the industry might be undergoing through. For example high operating
expenses and taxes through the period between 2012 and 2016 might inform the users of the
FINANCIAL ANALYSIS 6
financial statements that the government might have increased taxes in between the period
therefore resulting to the huge differences between the years (Financial Times, 2017).
b) Vertical Analysis
Sometimes the Vertical analysis is also called “the common size analysis” since the figures that
are given in the financial statements are all converted into percentages of a major component
within the statements. The Vertical analysis or the common size analysis offers the users of the
financial statements the ability to see the composition within the financial statements and make a
determination whether there is an occurrence of a significant change.
From the vertical analysis of Breedon Group PLC and TJ Corporation indicate stability in the
trend between the year 2012 and 2014 (Financial Times, 2017). Although the trend in Breedon
Group PLC is depicted to have a stagnant growth over the years, the same cannot be said of TJ
Corporation which has recorded a marginal increase in the net income over the three years. The
percentage of gross profit growth for Breedon Group plc seems to have remain the same over the
three years which might as well explain the reasons as to why the net income have also remain
constant over the years (Financial Times, 2017). The analysis depicts that the trend in the
expenses over the total sales revenue have also slightly remained the same over the duration
which might be the cause for the stagnant growth in the net income of the company.
Unlike Breedon Group PLC, the TJ Corporation’s Vertical analysis of the income statement
indicates that although the growth is marginally, the overall net income has experienced growth
in terms of percentage across the three years (Financial Times, 2017). TJ Corporation has
experienced a remarkable marginal reduction in the cost of sales which might also explain the
reason why the company has grown marginally in its net income over the three years.
FINANCIAL ANALYSIS 7
A comparison of the two analyses methods, i.e. the Horizontal and the Vertical analysis method
offer a glaring difference in the operations of the two companies, with TJ Corporation seemingly
fairing on well while Breedon Group PLC having gaps in some of the elements in the financial
statements (Financial Times, 2017). The following findings or observations might be some
symptoms for fraudulent activities happening within the corporation (Financial Times, 2017):
I. Breedon Group PLC revenues decreased by 0.04% in 2014, while inventory increased by
16% in 2014. The decrease in revenues was due to increased competition that saw the
business lose out some of its customers to competitors. Further, inventory increased
because the sales volumes were low, and thus the stock had to be held by the business.
II. Breedon Group PLC revenue decreased by 1% in 2013 and 0.04% in 2014, while account
receivable increased by 13% in 2013 and by 3% in 2014. The revenue decreased
probably due to decreased sales volumes. On the other hand, the account receivable
increased due to recovery of debts.
III. Cost of goods sold has decreased in 2013 by 2%, while inventory increased by 12% in
2013. The cost of goods decreased due to increased sales volumes and stiff competition
in the market. The goods that had been manufactured and failed to be sold account for the
increase in inventory.
IV. Breedon Group PLC revenue decrease by 0.04% in 2014, while cash and cash
equivalents increased by 81% in 2014. Revenue decreased due to decreased sales
volumes, caused by high market competition. Cash and cash equivalents increased due to
increased sales of stock, and recovery of debts.
FINANCIAL ANALYSIS 8
2.0 Financial Ratio
Following the suspicious elements of fraudulent activities that might be happening within
Breedon Group PLC financial statements, the following ratios were performed:
Liquidity Ratios i.e. The Current Ratios
Solvency Ratios i.e. Debt to Total Asset Ratio
Evaluation: The current ratio shows an increasing trend. As a result, Breedon Group PLC has
enough current assets to meet current liabilities. For every GBP 1 in current liabilities, Breedon
Group PLC holds about GBP 1.93 in current assets for the period. TJ max has 1.72 for 2014,
1.52 for 2013, and 1.68 for 2012.
The debt to total assets ratio passes above 50% over the last three years, which becomes a
concern. Breedon Group PLC overall liability has been increasing in relationship to assets. This
was caused by increased borrowing due to support the expansion of the business. For 2014, for
every $ 1 of assets, debt holders carry nearly 58 cents. TJ Maxx Corporation on the other hand
has also experienced an increase on its debt to Asset ratio between 2013 and 2014 (Financial
Times, 2017). This is presented in Appendix 4.
The two corporations indicate a steady growth in their revenues over the last three years although
as for Breedon Group plc, the growth is at a diminishing trend. The performances of TJ Maxx on
all the financial gauges indicate a steady corporation that investors will be confident in. On the
other hand, investors looking to get into Breedon Group’s would need more level of assurance
especially in terms of revenue generation activities of the company in order to be more confident
with the company.
FINANCIAL ANALYSIS 9
3.0 Stock Analysis
These tables are presented in Appendix 5. The graph shows the performance of Breedon Group’s
stock over the period between 11/July/2016 and 29/July/2016. This is a day by day tracking of
the changes noted in the market and a reason as to what might have caused the changes. There
was no change in observed in the closing price of the stock. However, across the market indices
there were some changes observed. The DJIA had a slight price increase of 0.36%, The S&P 500
observed a price increase of 0.25% as which was similar to that of NASDAQ. The lack of
adjustment in the stock price may have been as a result of the market being responsive. There
was a huge jump observed in the closing price of the stock. The stock increased by a margin of
3.15%. This was in contrast to the market trend, since the market indices showed slight increase
in their closing quotes. The DJIA had a slight price increase of 0.48%. The S&P 500 observed a
price increase of 0.25% as which was similar to that of NASDAQ. The lack of adjustment in the
stock price may have been as a result of the market being responsive.
FINANCIAL ANALYSIS 10
Reference List
Breedongroup. 2017. Breedongroupcom. [Online]. [20 October 2017]. Available from:
https://www.breedongroup.com/about-us
Drake, P. P., & Fabozzi, F. J. 2012. Financial Ratio Analysis. Encyclopedia of Financial
Models. doi:10.1002/9781118182635.efm0074.
Financial Times. 2017. Breedon Group PLC, BREE:LSE Directors and Dealings - FT.com.
Available from: https://markets.ft.com/data/equities/tearsheet/directors?s=BREE:LSE
Gil, L. 2005. Fuzzy Logic in Financial Analysis. Springer.
LSE. 2017. BREEDON Share Price (BREE) - London Stock Exchange. Retrieved from
http://www.londonstockexchange.com/exchange/prices-and-
markets/stocks/summary/company-summary/JE00B2419D89JEGBXAIM.html
Morley, M. 2013. Ratio Analysis. Published for the Institute of Chartered Accountants of
Scotland by Gee & Co.
Vance, D. E. 2003. Financial analysis & decision making: Tools and techniques to solve
financial problems and make effective business decisions. New York: McGraw-Hill.
FINANCIAL ANALYSIS 11
APPENDIX
1. FINANCIALS
Financials
2015
2014
2013
2012
Revenue (GBP Mil)
318
270
225
173
Gross Margin %
33.6
29.9
27
27.1
Operating Income GBP Mil
34
25
15
10
Operating Margin %
10.7
9.1
6.5
5.8
Net Income GBP Mil
25
17
9
5
Earnings Per Share GBP
0.02
0.02
0.01
0.01
Dividends GBP
Payout Ratio % *
Shares Mil
1,107
1,091
944
704
Book Value Per Share * GBP
0.16
0.15
0.14
0.12
Operating Cash Flow GBP Mil
54
37
21
11
Cap Spending GBP Mil
-14
-12
-13
-7
Free Cash Flow GBP Mil
40
25
9
3
Free Cash Flow Per Share * GBP
0.03
0.02
Working Capital GBP Mil
21
24
30
14
Key Ratios -> Profitability
Margins % of Sales
2015
2014
2013
2012
FINANCIAL ANALYSIS 12
Revenue
100
100
100
100
COGS
66.38
70.13
72.95
72.89
Gross Margin
33.62
29.87
27.05
27.11
SG&A
21.98
21.16
21.16
21.91
R&D
Other
0.95
-0.43
-0.62
-0.6
Operating Margin
10.69
9.14
6.51
5.8
Net Int Inc & Other
-0.86
-1.22
-1.61
-2.46
EBT Margin
9.82
7.92
4.9
3.34
Profitability
2015
2014
2013
2012
Tax Rate %
20.19
19.72
14.73
8.75
Net Margin %
7.82
6.33
4.16
3.03
Asset Turnover (Average)
0.96
0.89
0.94
0.88
Return on Assets %
7.52
5.62
3.93
2.66
Financial Leverage (Average)
1.43
1.97
1.87
2.49
Return on Equity %
12.45
10.81
8.2
7.61
Return on Invested Capital %
10.75
8.21
6.39
5.65
Interest Coverage
15.28
8.61
4.37
2.45
Key Ratios -> Growth
2015
2014
2013
2012
Revenue %
FINANCIAL ANALYSIS 13
Year over Year
18.1
20.09
29.45
2.71
3-Year Average
22.45
16.88
73.93
5-Year Average
49.47
10-Year Average
Operating Income %
Year over Year
38.09
68.57
45.19
61.73
3-Year Average
50.07
58.19
5-Year Average
10-Year Average
Net Income %
Year over Year
45.93
82.6
77.85
347.32
3-Year Average
67.97
144
5-Year Average
10-Year Average
EPS %
Year over Year
44.23
57.58
32
275
3-Year Average
44.23
98.32
5-Year Average
10-Year Average
Key Ratios -> Cash Flow
Cash Flow Ratios
2015
2014
2013
2012
Operating Cash Flow Growth % YOY
46.55
72.3
102.11
30.68
FINANCIAL ANALYSIS 14
Free Cash Flow Growth % YOY
58.16
181.6
170.55
132.72
Cap Ex as a % of Sales
4.54
4.39
5.59
4.22
Free Cash Flow/Sales %
12.49
9.32
3.98
1.9
Free Cash Flow/Net Income
1.6
1.47
0.96
0.63
Key Ratios -> Financial Health
Balance Sheet Items (in %)
2015
2014
2013
2012
Cash & Short-Term Investments
7.06
4.79
6.29
2.55
Accounts Receivable
14.98
16.65
Inventory
3.77
3.95
4.04
4.07
Other Current Assets
17.63
19.09
2.73
1.8
Total Current Assets
28.46
27.84
28.04
25.07
Net PP&E
63.25
63.01
66.05
73.32
Intangibles
6.76
6.85
5.43
1.16
Other Long-Term Assets
1.52
2.3
0.48
0.45
Total Assets
100
100
100
100
Accounts Payable
12.02
11.59
9.49
8.96
Short-Term Debt
Taxes Payable
3.42
3.67
2.93
2.62
Accrued Liabilities
Other Short-Term Liabilities
6.77
5.14
4.88
6.62
Total Current Liabilities
22.21
20.4
17.29
18.2
Long-Term Debt
0.11
20.97
21.53
31.79
FINANCIAL ANALYSIS 15
Other Long-Term Liabilities
7.77
7.93
7.6
9.93
Total Liabilities
30.08
49.31
46.43
59.92
Total Stockholders' Equity
69.92
50.69
53.57
40.08
Total Liabilities & Equity
100
100
100
100
Liquidity/Financial Health
2015
2014
2013
2012
Current Ratio
1.28
1.36
1.62
1.38
Quick Ratio
1.11
1.17
1.38
1.15
Financial Leverage
1.43
1.97
1.87
2.49
Debt/Equity
0.03
0.46
0.45
0.94
Key Ratios -> Efficiency Ratios
Efficiency
2015
2014
2013
2012
Days Sales Outstanding
69.74
70.75
60.57
67.94
Days Inventory
22.1
23.41
21.48
23.17
Payables Period
67.56
62.31
49.11
51.81
Cash Conversion Cycle
24.27
31.84
32.93
39.3
Receivables Turnover
5.23
5.16
6.03
5.37
Inventory Turnover
16.52
15.59
16.99
15.76
Fixed Assets Turnover
1.52
1.38
1.37
1.17
Asset Turnover
0.96
0.89
0.94
0.88
FINANCIAL ANALYSIS 16
2. Financial Statements
BREEDON GROUP PLC (BREE) CashFlowFlag
INCOME STATEMENT
Fiscal year ends in December. In millions except
per share data.
2016
2015
2014
2013
2012
Revenue
455
318
270
225
173
Cost of revenue
279
211
189
164
126
Gross profit
176
107
81
61
47
Operating expenses
Sales, General and administrative
118
74
57
48
38
Restructuring, merger and acquisition
8
Other operating expenses
-1
-1
-1
-1
-1
Total operating expenses
125
73
56
46
37
Operating income
51
34
25
15
10
Interest Expense
3
2
3
3
4
Other income (expense)
-1
-1
0
0
0
Income before taxes
47
31
21
11
6
Provision for income taxes
10
6
4
2
1
Net income from continuing operations
37
25
17
9
5
Other
0
0
0
0
0
Net income
37
25
17
9
5
Net income available to common shareholders
37
25
17
9
5
Earnings per share
FINANCIAL ANALYSIS 17
Basic
0.03
0.02
0.02
0.01
0.01
Diluted
0.03
0.02
0.02
0.01
0.01
Weighted average shares outstanding
Basic
1258
1070
1013
865
620
Diluted
1300
1107
1091
944
704
EBITDA
76
51
40
28
21
3. Key Ratios
Growth Profitability and Financial Ratios for TJX Companies Inc
Financials
2008-
01
2009-
01
2010-
01
2011-
01
2012-
01
2013-
01
2014-01
2015-01
2016-01
2017-01
TTM
Revenue USD Mil
18,337
19,000
20,288
21,942
23,191
25,878
27,423
29,078
30,945
33,184
34,372
Gross Margin %
24.5
24.1
26.2
26.9
27.3
28.4
28.5
28.5
28.8
29
28.9
Operating Income USD Mil
1,258
1,451
1,991
2,203
2,447
3,107
3,351
3,607
3,704
3,850
3,875
Operating Margin %
6.9
7.6
9.8
10
10.6
12
12.2
12.4
12
11.6
11.3
Net Income USD Mil
772
881
1,214
1,343
1,496
1,907
2,137
2,215
2,278
2,298
2,408
Earnings Per Share USD
0.83
1
1.42
1.65
1.93
2.55
2.94
3.15
3.33
3.46
3.7
Dividends USD
0.18
0.17
0.23
0.28
0.46
0.34
0.55
0.67
0.81
1.25
1.15
Payout Ratio % *
21.7
19.4
14.1
17.2
23.6
22.8
13.6
21.2
23.5
27.6
30.9
Shares Mil
936
885
855
813
774
748
726
704
683
664
651
Book Value Per Share * USD
2.49
2.58
3.59
3.98
4.3
4.75
5.8
6.39
6.56
6.7
7.35
Operating Cash Flow USD Mil
1,361
1,155
2,272
1,976
1,916
3,046
2,590
3,008
2,937
3,602
3,419
Cap Spending USD Mil
-527
-583
-429
-707
-803
-978
-947
-912
-889
-1,025
-1,085
FINANCIAL ANALYSIS 18
Free Cash Flow USD Mil
834
572
1,843
1,269
1,113
2,067
1,644
2,097
2,048
2,577
2,334
Free Cash Flow Per Share *
USD
0.89
1.06
1.46
1.56
1.43
2.98
2.24
2.64
2.88
3.53
Working Capital USD Mil
1,231
858
1,909
1,966
2,069
1,951
2,550
2,785
2,370
2,993
Key Ratios -> Profitability
Margins % of Sales
2008-
01
2009-
01
2010-
01
2011-
01
2012-
01
2013-
01
2014-01
2015-01
2016-01
2017-01
TTM
Revenue
100
100
100
100
100
100
100
100
100
100
100
COGS
75.49
75.95
73.78
73.1
72.67
71.57
71.49
71.45
71.21
71.02
71.1
Gross Margin
24.51
24.05
26.22
26.9
27.33
28.43
28.51
28.55
28.79
28.98
28.9
SG&A
17.65
16.5
16.41
16.91
16.77
16.42
16.29
16.15
16.82
17.38
17.62
R&D
Other
-0.09
-0.05
Operating Margin
6.86
7.64
9.81
10.04
10.55
12
12.22
12.4
11.97
11.6
11.27
Net Int Inc & Other
0.01
-0.19
-0.18
-0.15
-0.11
-0.11
-0.19
-0.15
-0.38
-0.11
EBT Margin
6.87
7.64
9.62
9.86
10.4
11.89
12.1
12.21
11.82
11.22
11.17
Profitability
2008-
01
2009-
01
2010-
01
2011-
01
2012-
01
2013-
01
2014-01
2015-01
2016-01
2017-01
TTM
Tax Rate %
37.9
36.95
37.82
38.1
37.96
38.04
35.61
37.6
37.74
38.27
37.24
Net Margin %
4.14
4.63
5.98
6.12
6.45
7.37
7.79
7.62
7.36
6.93
7.01
Asset Turnover (Average)
2.94
2.97
2.97
2.84
2.85
2.91
2.78
2.73
2.74
2.72
2.57
Return on Assets %
12.17
13.78
17.79
17.4
18.41
21.43
21.69
20.77
20.13
18.85
18.01
Financial Leverage (Average)
3.1
2.89
2.58
2.57
2.58
2.59
2.41
2.61
2.67
2.86
2.99
Return on Equity %
34.91
41.29
48.31
44.85
47.43
55.47
54.14
52.16
53.15
52.13
53.67
Return on Invested Capital %
25.33
30.16
37.55
36.12
38.5
45.62
43.39
39.12
38.55
35.96
36.21
Interest Coverage
76.37
73.02
65.1
61.7
61.37
61.42
FINANCIAL ANALYSIS 19
Key Ratios -> Growth
2008-
01
2009-
01
2010-
01
2011-
01
2012-
01
2013-
01
2014-01
2015-01
2016-01
2017-01
Latest
Qtr
Revenue %
Year over Year
7.14
1.89
6.78
8.15
5.69
11.59
5.97
6.04
6.42
7.23
5.67
3-Year Average
7.73
5.77
5.24
5.57
6.87
8.45
7.72
7.83
6.14
6.56
5-Year Average
9.25
7.35
6.35
6.44
5.91
6.77
7.62
7.46
7.12
7.43
10-Year Average
9.7
9.1
8.72
8.64
8.03
8
7.48
6.91
6.78
6.67
Operating Income %
Year over Year
-1.69
18.06
33.19
12.9
9.45
28.83
7.86
7.64
2.72
3.91
4.34
3-Year Average
3.93
12.14
15.63
21.08
18.07
16.76
15
14.36
6.05
4.74
5-Year Average
5.2
5.99
12.04
16.22
13.82
20.14
17.99
13.07
10.95
9.81
10-Year Average
8.95
7.58
8.52
9.51
10.36
12.42
11.83
12.55
13.56
11.79
Net Income %
Year over Year
4.57
14.11
37.81
10.68
11.39
27.44
12.1
3.64
2.82
0.9
3-Year Average
5.13
8.45
18.03
20.29
19.32
16.25
16.75
13.98
6.11
2.45
5-Year Average
5.94
5.99
12.81
14.24
15.18
19.83
19.4
12.79
11.14
8.97
10-Year Average
9.74
7.58
8.81
9.58
11.57
12.67
12.5
12.8
12.68
12.03
EPS %
Year over Year
7.1
20.48
42
16.2
16.97
32.12
15.29
7.14
5.71
3.9
20.48
3-Year Average
8.49
12.36
22.37
25.74
24.5
21.55
21.23
17.74
9.3
5.58
5-Year Average
8.78
9.34
16.92
18.54
20.02
25.17
24.07
17.27
15.08
12.38
10-Year Average
14.33
12.16
13.16
13.5
15.67
16.68
16.47
17.1
16.8
16.14
Key Ratios -> Cash Flow
Cash Flow Ratios
2008-
01
2009-
01
2010-
01
2011-
01
2012-
01
2013-
01
2014-01
2015-01
2016-01
2017-01
TTM
Operating Cash Flow Growth % YOY
-306
-236
FINANCIAL ANALYSIS 20
Free Cash Flow Growth % YOY
209
-233
Cap Ex as a % of Sales
2.87
3.07
2.12
3.22
3.46
3.78
3.45
3.13
2.87
3.09
3.16
Free Cash Flow/Sales %
4.55
3.01
9.08
5.78
4.8
7.99
5.99
7.21
6.62
7.77
6.79
Free Cash Flow/Net Income
1.08
0.65
1.52
0.95
0.74
1.08
0.77
0.95
0.9
1.12
0.97
Key Ratios -> Financial Health
Balance Sheet Items (in %)
2008-
01
2009-
01
2010-
01
2011-
01
2012-
01
2013-
01
2014-01
2015-01
2016-01
2017-01
Latest
Qtr
Cash & Short-Term Investments
11.1
7.34
23.38
22.81
19.34
21.53
23.96
24.95
21.29
26.96
20.72
Accounts Receivable
2.17
2.32
1.98
2.51
2.47
2.34
2.06
2.03
2.17
2.01
2.63
Inventory
41.48
42.4
33.93
34.69
35.63
31.69
29.08
28.92
32.13
28.29
34.05
Other Current Assets
5.74
6.63
5.07
3.96
4.54
4.49
4.38
4.44
3.31
2.9
3.05
Total Current Assets
60.49
58.69
64.36
63.97
61.98
60.05
59.48
60.34
58.89
60.16
60.46
Net PP&E
33.87
35.63
30.64
30.87
32.79
33.89
35.24
34.76
35.98
35.18
35.01
Intangibles
2.75
2.91
2.41
2.26
2.17
3.32
3.07
2.78
2.99
1.52
1.41
Other Long-Term Assets
2.89
2.77
2.59
2.9
3.07
2.74
2.21
2.11
2.14
3.14
3.12
Total Assets
100
100
100
100
100
100
100
100
100
100
100
Accounts Payable
22.98
20.65
20.2
21.12
19.87
20.3
17.36
18.04
19.16
17.32
21.52
Short-Term Debt
0.03
6.39
Taxes Payable
1.83
1.24
0.61
2.88
1.64
4.05
2.3
3.15
0.87
Accrued Liabilities
13.93
12.24
16.72
16.91
16.48
9.9
9.48
7.18
11.16
10.89
17.02
Other Short-Term Liabilities
4.89
5.52
0.03
0.03
0.04
6.46
6
6.05
5.67
5.57
Total Current Liabilities
41.83
44.8
38.79
39.3
36.99
39.54
34.49
35.31
38.28
36.93
39.4
Long-Term Debt
12.62
5.92
10.37
9.71
9.35
8.14
12.49
14.59
14.12
17.29
16.07
Other Long-Term Liabilities
13.25
14.73
12.13
12.1
14.91
13.78
11.56
11.78
10.14
10.77
11.06
Total Liabilities
67.71
65.45
61.29
61.11
61.25
61.46
58.53
61.68
62.55
64.99
66.52
Total Stockholders' Equity
32.29
34.55
38.71
38.89
38.75
38.54
41.47
38.32
37.45
35.01
33.48
Total Liabilities & Equity
100
100
100
100
100
100
100
100
100
100
100
FINANCIAL ANALYSIS 21
4. 0 Analysis
Liquidity Analysis
Current ratio
the current ratio is computed as Current assets/ Current liabilities
Breedon Group
Current assets
Current
Current ratio
Liquidity/Financial Health
2008-
01
2009-
01
2010-
01
2011-
01
2012-
01
2013-
01
2014-01
2015-01
2016-01
2017-01
Latest
Qtr
Current Ratio
1.44
1.31
1.66
1.63
1.68
1.52
1.72
1.71
1.54
1.63
1.53
Quick Ratio
0.32
0.22
0.65
0.64
0.59
0.6
0.75
0.76
0.61
0.78
0.59
Financial Leverage
3.1
2.89
2.58
2.57
2.58
2.59
2.41
2.61
2.67
2.86
2.99
Debt/Equity
0.4
0.18
0.27
0.25
0.24
0.21
0.3
0.4
0.4
0.53
0.48
Key Ratios -> Efficiency Ratios
Efficiency
2008-
01
2009-
01
2010-
01
2011-
01
2012-
01
2013-
01
2014-01
2015-01
2016-01
2017-01
TTM
Days Sales Outstanding
2.53
2.75
2.62
2.9
3.18
3.01
2.88
2.66
2.67
2.73
3.46
Days Inventory
68.94
67.91
62.81
60.28
61.89
58.77
55.67
54.32
57.26
56.84
68.03
Payables Period
37.44
35.41
33.94
36.31
36.05
35.23
34.46
33.19
34.87
34.34
42.36
Cash Conversion Cycle
34.02
35.26
31.49
26.86
29.03
26.55
24.09
23.79
25.05
25.24
29.13
Receivables Turnover
144.25
132.5
139.14
126.01
114.68
121.18
126.7
137.19
136.95
133.56
105.39
Inventory Turnover
5.29
5.37
5.81
6.06
5.9
6.21
6.56
6.72
6.37
6.42
5.37
Fixed Assets Turnover
8.73
8.57
9.04
9.24
8.96
8.72
8.04
7.79
7.73
7.65
7.49
Asset Turnover
2.94
2.97
2.97
2.84
2.85
2.91
2.78
2.73
2.74
2.72
2.57
FINANCIAL ANALYSIS 22
plc
liabilities
2014
5,314
2,758
1.93
2013
4,719
2,535
1.86
2012
4,829
2,607
1.85
TJ Maxx
Current assets
Current
liabilities
Current ratio
2014
6,067,998
3,517,843
1.72
2013
5,711,543
3,760,596
1.52
2012
5,132,632
3,063,423
1.68
Solvency Analysis
Debt to total assets
Computed as Total liabilities/ Total assets
Breedon Group plc
FINANCIAL ANALYSIS 23
Breeon Group
plc
Total liabilities
Total assets
2014
8,379
14,357
58.362%
2013
7,857
13,903
56.513%
2012
7,640
14,148
54.001%
TJ Maxx
Total liabilities
Total assets
2014
5,971,129
10,201,022
59%
2013
5,845,918
9,511,855
61%
2012
5,072,315
8,281,605
61%
FINANCIAL ANALYSIS 24
5. Stock Analysis
a) A comparative Analysis of the performance of Breedon Group Plc Stock
b) Trend analysis for stock performance over the last 5 years

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