Swot Analysis : Corporate Finance And Strategy

Aerts and Walton (2013) expressed ratio analysis as connection between two elements of financial statements. According to them, ratios analysis allows to compare the incomparable elements in different companies. In other words, we may say that comparing profit on its own between two companies would not give a reliable conclusion on organisations’ profitability. If would simply ignore profit relationship with other financial elements like cost of goods, which itself affects the proportion of profit. This is where ratio analysis becomes a useful instrument. It allows us to draw the link between two different sales figures and two different cost of goods figures and eventually makes results comparable between two organisations. Lasher (2014) added that ratios are only valuable as a tool when they are compared with the ratios of other companies. To make investment decisions easier, we will compare industry averages later in the report.

Ratio analysis is the most common form of financial analysis. It provides relative measures of the firm's conditions and performance.

Profitability Ratio defines as the ratio which is used in order to calculate the profit or the loss of the company.

Ratio analysis is a very powerful method of analyzing the status of a company by manipulating the audited financial statements. They are a yardstick of doing a performance evaluation of the firm’s financial condition. A deeper understanding of the ratios by an investor offers them more knowledge on the working of the firm and the best investment they can undertake. The financial ratio gives a relationship of two or more accounting variables through arithmetical expressions (Beck, 2009). They offer a standard for comparison of firms’ growth and performance as well as with competitors, more so, they offer the firm a clean bill of health.

SWOT (Strengths, Weaknesses, Opportunities, and Threats) are a way that business managers, owners, and general employees can look at their job, or business. I chose this however, because it is so ubiquitous, while it is often used in the business world it can apply to virtually any situation and this is why it is a great idea and thing to follow. It provides an outline that the individual may choose to follow, this is important because people often are not analytical and objective. This leads to rational decisions such as someone doing something on a whim, or making a choice out of emotion which only works sometimes. If the individual can see the details of SWOT in every scenario or even most it will be beneficial and save time. It is an efficient and very simple way for someone to become analytical which can save a business from going under and failing.

Strategic Management is a set of upper level management decisions and actions that will determines the long term objectives and performance of a corporation. It accomplishes this task by including a variety of tools and analysis techniques, which will implement, evaluate and control the general direction of a company. This is done through strategy formulation which begins with a situational analysis that emphasizes the monitoring and evaluating of external opportunities and threats in light of a corporation´s strengths and weaknesses (Wheelen and Hunger, 2006; Saloner et al., 2001). The objective of this paper is to describe, analyze and discuss advantages and disadvantages of a concept named SWOT, which stands for Strengths, Weaknesses, Opportunities and Threats. These are the concepts that are frequently used as tools for the analyzing of all external environments of an organization including their internal factors that constitutes its structure (Wheelen and Hunger, 2006).

Ratio analysis are useful tools when judging the performance of a company by weighing and evaluating the operating performance (Block-Hirt). There are 13 significant ratios that can separate by four main categories,

Profitability ratios show a company's overall efficiency and performance. To measure the profitability of Polish Fine Foods I will use 3 ratios. First ratio is gross profit margin. The gross profit margin looks at cost of goods sold as a percentage of sales. This ratio looks at how well a company controls the cost of its account and the manufacturing of its products. The larger the gross profit margin, the better for the company. To calculate the gross profit margin I need to divide the gross profit by the sales and then time it by 100 to find the percentage. So, to find the gross profit margin for Polish Fine Foods I have to divide £45900 by £145400 and this would give me the answer £0.3156. To find out the percentage, I now need to multiply it by 100 and the answer is 32%. The gross profit margin for Polish Fine Foods is used to compare how much value is added to an item in between being bought in as stock or materials and being sold by the business. A low gross profit margin could show that there are high stock costs or maybe that retail price is being too low. If the business has a high gross profit margin then

Ratio is the relationship between two variables that is represented by two numbers showing how much larger one variable is than the other. In this report, we used the methodology of ratio analysis to analyze various aspects of the financial statements of Coca Cola Company. It

In 2013 Tesco’s gross profit percentage in sales was at a high of 8.44% however come 2014 it has dropped by 2.13% leaving it at 6.31% in 2014. This goes the same for the net

Ratio analysis are useful tools when judging the performance of a company by weighing and evaluating the operating performance (Block-Hirt). There are 13 significant ratios that can separate by four main categories,

Ratio analysis is a useful tool for analyzing financial statements. Calculating ratios will aid in understanding the company’s strategy and in understanding its strengths and weaknesses relative to other companies and over time. They can sometimes be useful in identifying earnings management and in understanding the effect of accounting choices on the firm’s reported profitability and growth. Finally, the ratios help in obtaining a better understanding of a firm’s current profitability, growth, and risk which can improve forecasts of future profitability and growth and estimates of the cost of capital.

Introducing a new product to the market is a very risky operation. Not only is it risky but it takes time, effort and money. In order for a product to be successful, it had to fully undergo the product life cycle. Kellogg’s has an advantage when it comes to the breakfast market as it holds the biggest market share. After providing the British public with breakfast for years, it most certainly has a larger customer loyalty base. The strong brand makes it easy for product launching as the public are already familiar with the brand. However, introducing a new product comes with its challenges and risks. Looking at the ratios, Kellogg’s has a current ratio to date of 1:1.1 . This in financial terms rings alarm bells as it shows that the company will struggle to pay its short term obligations. Kellogg’s however can operate on a low current test ratio as it has a good long term revenues coming into the business. This means that it is possible to borrow on this basis to meet its current obligation. After calculating the net present value, which gave a positive NPV of £38450million, I move that we go ahead with the introduction of a new product. In traducing a new product is a sign of innovation and growth on the part of the competitors. In order for a new product to be introduced to the market, Kellogg’s will have to spend money on the actual product, the marketing side of

Ratio analysis is generally used by the company to provide some information on how the company has performed during that year, so that the parties involved including shareholders, lenders, investors, government and other users could make some analysis before making any further decision towards that particular company. As mentioned by Gibson (1982a cited in British Accounting Review, 2002 pg. 290) where he believes that the use of ratio analysis is such an effective tool to evaluate the company’s finance, and to predict its future financial state. Ratios are simply divided in several categories; these are the profitability, liquidity, efficiency and gearing.

SWOT stands for strengths, weaknesses, opportunities, and threats (Ferrell and Hartline, 2014, p. 39). A SWOT analysis evaluates both the internal factors (strengths and weaknesses) and external factors (opportunities and threats) that create advantages and disadvantages to a company when serving its customers (p. 39). A SWOT analysis is extremely beneficial in helping a company determine areas of improvement (p. 39). Internal factors examine the actual company being analyzed while external factors examine the external market (customers and competition) (p. 85).