## Cadbury Company An Analysis of Financial Statements Essay

This analysis is to analyze the public presentation of Cadbury in 2007 and 2008 from their fiscal statements which are shown below.There is a important betterment in Cadbury ‘s sweet grosss which increased 15 % to & A ; lb ; 5.

We Will Write a Custom Essay about Cadbury Company An Analysis of Financial Statements Essay
For You For Only \$13.90/page!

order now

Ratios provide a good benchmark that makes us easier to compare from one company to another.Here are some ratios about public presentation of Cadbury which all computation is in million lbs. From this ratio, we compare 3 old ages fiscal statements and the ratios are:ProfitablenessEfficiencyInvesting ratios

## Tax return on ordinary stockholders ‘ financess ( ROSF )

In 2007Average stockholders ‘ fund = ( 3696+4173 ) :2 = 3934.5ROSF = ( 407: 3934.5 ) x 100 = 10.

344 %In 2008Average stockholders ‘ fund = ( 4173+3534 ) :2= 3853.5ROSF = ( 366: 3853.5 ) x 100 = 9.5 %

## Tax return on Capital employed ( ROCE )

In 2007Average entire assets less current liabilities = ( 6855 + 6724 ) : 2 = 6789.5ROCE = ( 278: 6789.5 ) x 100 = 4.

095 %In 2008Average entire assets less current liabilities = ( 6724 + 5507 ) : 2 = 6115.5ROCE = ( 388: 6115.5 ) x 100 = 6.345 %

## Operating Net income Margin

In 2007Operating net income = 278Operating net income border = 278: 4699 x 100 = 5.92 %In 2008Operating net income = 388Operating net income border = 388: 5384 x 100 = 7.

21 %

## Gross Profit Margin

In 2007Gross net income border = ( 2195: 4669 ) x 100 = 47.01 %In 2008Gross net income border = ( 2514: 5384 ) x 100 = 46.69 %

## Efficiency

In 2007Ratio = ( 821: 2504 ) x 365 = 119.67 yearss ( 120 yearss )In 2008Ratio = ( 767: 2870 ) x 365 = 97.54 yearss ( 98 yearss )

## Entire plus turnover

In 20072006 = Fixed assets + current plus = 7815 + 2396 + 22 = 102332007 = Fixed assets + current plus = 8667 + 2600 + 71 = 11338Average = ( 10233 + 11338 ) : 2 = 10785.5Ratio = 4699: 10785.

5 = 0.448In 20082007 = Fixed assets + current plus = 8667 + 2600 + 71 = 113382008 = Fixed assets + current plus = 5990 + 2635 + 270 = 8895Average = ( 11338 + 8895 ) : 2 = 10116.5Ratio = 5384: 10116.5 = 0.532

## Net plus turnover

In 2007Average entire assets less current liabilities = ( 6855 + 6724 ) : 2 = 6789.5Ratio = 4699: 6789.5 = 0.688In 2008Average entire assets less current liabilities = ( 6724 + 5507 ) : 2 = 6115.

5Ratio = 5384: 6115.5 = 0.88

## Dividend screen

In 2007Net income available for dividend = 149 + 258 = 407Ratio = 407: 311 = 1.31In 2008Net income available for dividend = 370 + ( -4 ) = 366Ratio = ( 366: 295 ) = 1.24

## Dividend Payment Ratio

In 2007Net income available for dividend = 149 + 258 = 407Ratio = ( 311: 407 ) x 100 % = 76 %In 2008Net income available for dividend = 370 + ( -4 ) = 366Ratio = ( 295: 366 ) x 100 % = 81 %

Based on computation above, we can summarize a few things. There is a relation between profitableness and efficiency, which is ROCE = runing net income border x plus turnoverIn 2007( 278: 6789.5 ) = ( 278: 4699 ) ten ( 4699: 6789.

5 )In 2008( 388: 6115.5 ) = ( 388: 5384 ) ten ( 5384: 6115.5 )It means that to better ROCE, Cadbury has to better their operating borders, from this Cadbury has increased their gross revenues ( increase their monetary value of their merchandise and cut down their cost ) , this method is effectual, that we can see from their bend over which had increased from 4.7 billion lbs to 5.4 billion lbs in 2008.

## Tax return on ordinary stockholders ‘ financess ( ROSF )

ROSF means to compares the net income that available for stockholders with their investing in concern. ROSF uses mean investing in the concern, from the computation of ROSF, we can see that the net income for stockholders had decreased from 2007 to 2008 which was 10.344 % in 2007 and 9.

5 % in 2008, this was happened because in 2008 there was loss because discontinued operation which has explained from above.

## Gross Profit Margin and Operating Profit Margin

Gross net income border calculates about the difference between cost of fabrication and the merchandising monetary value, from that we have calculated on above, there is a somewhat lessening from 2007 to 2008 which was 47.01 % in 2007 and it was decreased to 46.69 % . for runing border, it calculates about operating net income that Cadbury received in every 100 lbs of gross revenues, in Cadbury ‘s fiscal statement, we can see that there is an addition from 5.92 in 2007 to 7.21 in 2008, which means that in 2007 Cadbury received 5.92 % as operating net income and 94.

08 % traveling in cost, and besides in 2008.

## Entire plus turnover and Net plus turnover

Entire plus turnover of Cadbury PLC in 2007 and 2008 were 0.448 and 0.532, whereas their net plus turnover in 2007 and 2008 were 0.688 and 0.88. Entire plus turnover is based on entire assets while net plus turnover is based on entire assets less current liabilities. Harmonizing to informations in 2008, it showed that Cadbury got & A ; lb ; 0.532 for every & A ; lb ; 1 of their assets and got & A ; lb ; 0.

88 for every & A ; lb ; 1 of their net assets. This state of affairs indicated that Cadbury had loss & A ; lb ; 0.468 per & A ; lb ; 1 of their assets and had loss & A ; lb ; 0.12 per & A ; lb ; 1 of their net assets.

## Dividend screen and Dividend payment ratio

Both of those ratios have same intent which is to cognize how much money that the stockholders received from the net income of the company. In 2007, the dividend screen and dividend payment ratio were 1.

31 and 76 % while the dividend screen and dividend payment ratio in 2008 were 1.24 and 81 % . It expressed that Cadbury got some net income which is & A ; lb ; 1.31 per & A ; lb ; 1 that Cadbury paid out as dividend in 2007 and they got & A ; lb ; 1.

24 in 2008. Those per centums expressed the sum of net income that is allocated to pay the stockholders as dividend, so 76 % and 81 % of their net income has been paid out as dividend.

## The Analysis of Financial Statements of Cadbury Competitor

Cadbury has several rivals in confectionary concern which are Nestle, Mars, etc.

In this instance, we would wish to compare Cadbury with Nestle because Nestle is the largest nutrient and drink company in the universe. Nestle besides produces cocoa, gum, and confect same as Cadbury. The tabular arraies of fiscal statements of Nestle are shown below.Harmonizing to tabular array that is shown supra, we can analyse the fiscal statements of Nestle.

There are several ratios that we can cipher which are:Profitableness

## Tax return on ordinary stockholders ‘ financess ( ROSF )

In 2007= 20.79 %In 2008= 37.92 %

## Tax return on capital employed ( ROCE )

In 2007= 20.08 %In 2008= 34.58 %

## Operating net income border

In 2007= 13.42 %In 2008= 20.91 %

## Gross net income border

In 2007= 58.13 %In 2008= 56.

93 %Efficiency

## Entire assets turnover

In 2007= 0.98In 2008= 1.09

## Net assets turnover

In 2007= 1.50In 2008= 1.65Efficiency

## Acid trial ratio

In 2007= 0.

61In 2008= 0.71Investing ratios

## Dividend screen

In 2007= 2.49 timesIn 2008= 3.72 timesIn 2008, turnover of Cadbury and Nestle were & A ; lb ; 5,384 1000000s and & A ; lb ; 55,174.6988 1000000s, whereas the net net income of Cadbury and Nestle were & A ; lb ; 366 1000000s and & A ; lb ; 9,563.

75502 1000000s. From those informations, we can compare both of their public presentation in 2008.Cadbury= = 0.068 = 6.8 %Nestle= = 0.173 = 17.

3 %Based on those consequences, it looks Nestle has a better public presentation than Cadbury. Nestle has a batch of assortment of merchandises that they have sold and Nestle company is besides has wider market than Cadbury. The classs of Nestle merchandises are baby nutrients, breakfast cereals, cocoa and confectionery, drinks, bottled H2O, dairy merchandises, ice pick, prepared nutrients, foodservice, and pet attention. ( ANSWERS.COM hypertext transfer protocol: //www.answers.

com/topic/nestl-sa ) .That ground is the 1 of many grounds that is doing Nestle public presentation is better than Cadbury.However, if we observe in one class such as cocoa and confectionary, Cadbury has a good market instead than Nestle. Cadbury is the 2nd largest confect mill in the universe after Mars and the 2nd largest gum mill in the universe after Wrigley.