Comparative Ratio Analysis and Investment Assessment of WH Smith and Its Competitor

Main points to be covered

My Company : Wh Smith

Take any Competitor

Comparison of ratios to at least one competitor (teams will choose a relevant competitor themselves)

Need the comparison along with the graphs

RATIO ANALYSIS

I. Profitability Ratio:

1. Return on Capital Employed (ROCE):

2. Return on Equity (ROE):

3. Capital Turnover Ratio:

4. Net Margin Ratio:

5. Cost of Sales Ratio:

II. Efficiency Ratios:

1. Inventory days:

2. Trade Receivable Days

3. Trade Payable Days

4. Asset Turnover Ratio

III. Liquidity Ratios

1. Current Ratio

2. Quick Ratio

IV. Leverage Financial Ratios

1. Debt to Equity Ratio

2. Gearing Ratio

3. Interest Coverage Ratio

V. Investment Ratios

1. Earnings per Share (EPS)

2. Price Earnings Ratio (PE)

3. Dividend Cover Ratio

4. Dividend Yield Ratio

Recommend ONE initiative based on your ratio and comparative analysis that the target company could take in order to improve future profitability. Make whatever assumptions you wish [stating them clearly] and estimate the impact on relevant ratios giving numeric examples.

A client of MWF is considering purchasing 10% of your target company’s shares. Use Book and Market values to estimate how much your target company is worth and then advise the investor how much 10% would cost. Advise the investor [giving at least three strongly justified reasons] whether it is a good investment

YOUR CALCULATIONS – EXCEL SPREADSHEET. THE ORIGINAL SPREADSHEET MUST BE UPLOADED TOGETHER WITH THE REPORT.