Itv Plc Financial Ratios

1614 Words Jan 8th, 2013 7 Pages
ITV Plc is a company on UK london Stock Exchange. This report calculates it important financial ratios to give a pitcure of its financial position in the market comparing by comaparing it to its industry average.
From Annual report of year 2011 of ITV Plc .
Financial Performance Analysis:
This section aims to reflect the financial performance of the ITV Plc by analysing a range of financial ratios from the last two years. A comprehensive evaluation is provided of the significant ratios and later it is compared with its peers and sector ratios.
Liquidity Ratios
Basically the liquidity ratios are used to determine a company’s ability to cover its short term obligations when are in financial distress and these obligations are due.
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It can be seen that operating profit margin has increased from 2010 to 0.19% in 2011. In other words £0.19 is operating profit is earned on every pound of sales. There is a huge difference in numbers when compared to the industry average. There is a need of introducing new sales strategies to improve sales and profit and make their position better in the industry. To attract potential investors operating profit margin needs to be improved.

Total Asset Turnover
This ratio is useful to determine the amount sales that are generated from each pound of assets. It can be seen that ITV has increased its total asset turnover compare to 2010. This is an improvement and it is also close to the industry average. Basically ITV is generating £0.74 in sales for every pound invested in assets.
Fixed Asset Turnover
This ratio shows what portion of sales is generated from fixed assets investment. It basically tells how well the company uses its fixed assets to generate revenue. In other words this means that £0.015 of sales is generated for every pound investment in fixed assets. It can be seen that ITV is generating less from the other in the industry. It needs to improve its sales from fixed assets and get close to the industry average.
Financial Strength Ratios Financial Strength | Ratios | Formula | 2011 | 2010 | Peer Average | Sector |
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