- August 11, 2017 at 7:10 am
Normally they must be audited so Mar 2016. Just ensure they weren’t out by 31 July 2017 as that is the cut off date. The day after the date auditors sign the accounts is usually taken as the publishing date.August 13, 2017 at 3:43 pm
thank you, would apportion as you advisedAugust 13, 2017 at 3:54 pm
I’m thinking of choosing General Mills Inc.(main) and Conagra Brands Inc.(comparator), could you kindly confirm if these two are comparable as General mills is more focused on cereals and snacks and Conagra makes canned, frozen,preserved foods and bakery items.
FurqanAugust 17, 2017 at 8:28 am
Probably. I think it is always going to be difficult to find a perfect match within the same country as companies tend to have slightly different products to appeal to a different market as this is easier than competing head-to -head in the same market with another established company. So go for it and bring out the differences in their products and operations in the Limitations section and in your analysis and evaluationAugust 17, 2017 at 4:11 pm
Ok thanks,yes i was facing the same issue as in food producers no one is focusing on a single area and everyone has diversified into a lot of different marketsAugust 22, 2017 at 6:16 am
Can I compare marriott international(the group) vs hilton worldwide(the group)?and will I be able to get sufficient data for hotels?I’m worried that the hotels industry might not have sufficient research material available.
Best Regards.August 22, 2017 at 7:51 am
Marriott and Hilton were discussed on the first page of this thread so refer to that. As to whether their is sufficient material available that is not something you will know until you start researching but I would have thought for these two there would be sufficientAugust 22, 2017 at 10:11 am
can i choose 2 food companies for topic 8 food sector with 90% same brands but huge difference in size e.g one company has 7bn of total assets and other company has 1.5bn of total assets..August 24, 2017 at 3:00 pm
I want to choose aerospace as my industry for the report. Can I choose Airbus and Boeing?August 27, 2017 at 8:22 am
I am facing some issues if you could kindly help me with them.
1)Where can i find a detailed breakdown of the figures found in the the financial statements of the annual report.
2) The figure of cost reimbursement is being shown in the FS of marriott and this figure has been added in revenue and then the same is deducted as cost too.I’m not sure how to interpret this as this figure makes up 90% of the cost and revenue.
Cost Reimbursements: We recognize cost reimbursements from managed, franchised, and licensed properties when we incur the related reimbursable costs. These costs primarily consist of payroll and related expenses at managed properties where we are the employer and also include certain operational and administrative costs as provided for in our contracts with the owners. As these costs have no added markup, the revenue and related expense have no impact on either our operating or net income.
3) Also should i base my RAP on the US sector or the whole group and if i base it on the US sector alone so should I include the the whole group figures or just the US sector .The annual report contains figures of the whole marriott group.
Best Regards.August 27, 2017 at 7:30 pm
@usama somail – i don’t understand how the brands are 90 %the same if they are manufacturers as brands are unique to companies though common to retailers. Or do you mean types of products? If both are manufacturers then yes you can use these in spite of size -ratios allow you to make comparisons and you can cover the size difference in the Limitations section.August 27, 2017 at 7:38 pm
@aynskyfighter -yes these would make good companies to compare as they both produce commercial airliners and compete head to head. ( Don’t worry about the currencies being different as ratios obviate the need to translate currencies )August 27, 2017 at 11:53 pm
First of all thank you so much for helping so many students like us. Really, I think you should be getting blessings from all around the world!
I have two questions regarding the companies I chose.
1. The main company has a revenue 3 times as much as its competitor and hence is a much bigger company, is this an issue?
2. The main company has approximately 1/5 of its revenue on property sales and 4/5 on hotels. I’m aware business on properties is not among the industry sectors for period 35. However considering that it is a minor sector of its main business (the main business being Hotels), can i continue with this company?
Thanks a lotSeptember 3, 2017 at 8:01 am
@nzeadall -apologies for the delay in responding
1. Just the usual mention of this in limitations for both of these factors .possibly also in places the size will have effected results e.g. economies of scale and larger companies can often dictate more favourable terms for themselves with suppliers (e.g. 60 -120 days payment terms whereas small companies will rarely get much of an extension beyond 30-45 days)’
2. Try to see if there is any segmental analysis for this. Depending on whether these are outright property sales you may need to consider how this element has affected the results. Often larger chains with resorts do ‘time share’ sales, which in terms of maintenance will incur similar costs to the rest but can be passed on as charges to the ‘owners’ . See what information is available as there may possibly be a special accounting treatment whereby with the actual sale of a time share a portion of the sale is held in reserves and only transferred as income to the income statement over the life of the time share.
Once again I must stress that my knowledge and experience of this industry mainly relates to personal social experience rather than having any actual experience of the hotel trader’s financial working practices.September 4, 2017 at 10:52 am
So you guys think I can compare AIRBUS with BOEING for November submissions? Plus, what if I compare different years of AIRBUS and BOEING and compare its performance?September 4, 2017 at 10:03 pm
Thanks a lot for your reply. I’ll take note of the points you mentioned.
I forgot to mention that my main company X is a subsidiary of another bigger company Y. Can I use strictly company X as my main company because the parent company Y deals in other sectors. To be noted that I have the detailed financial reports of company X separately.
ThanksSeptember 5, 2017 at 2:09 pm
Should be ok as the more you are comparing like with like the better and more valid the comparisons. So if by using X you are managing to eliminate the property sales business this makes the two companies more on an equal footing in terms of market and subsequent analysis.
Possibly though one of its strengths may be as part of the bigger group as it probably makes borrowing capital cheaper and there may be some benefits in terms of favourable intercompany cash flows it can call on if required.September 5, 2017 at 6:18 pm
Thank you for your valuable answer. I would be most grateful if you could clarify the following:
My main company deals in several countries in the world but reports in pounds. The issue is I have comparative figures both in CONSTANT currency and REPORTED currency. Under CONSTANT currency, they made a reduction in profit and under REPORTED currency (due to depreciation of the pound), they have an increase in profit.
Do I need to submit ratios for both figures? if yes do i need to make a dual analysis? One for CONSTANT currency and another for REPORTED currency? (Note that the absolute figures are different under each of them). I’m worried especially for key ratios like profit, and REVPAR figures.
On the other hand, I searched for a simpler company ( food sector this time) which deals only in one country, but i have a problem with it;s competitor.
My competitor’s annual report 2016 is 01 Jan 2016 – 31 Dec 2016, however the 2015 report is 01 july 2015 – 31 dec 2015 (6 months only!) because it changed its year end. However, it also includes comparative figures for 01 july 2014 -30 june 2015.
Do I need to pro-rate 01 Jan 2015 – 30 june 2015 in the comparative figures (6 months) and then add in the given figures in the report 01 july 2015 – 31 dec 2015 so that i then have a full year 01 Jan 2015 – 31 dec 2015 ?
Is it compulsory to show a 3 year analysis for our competitor, or does the latest financial statements (competitor) suffice for evaluation of the main company?
Thank you very muchSeptember 8, 2017 at 8:27 am
So you guys think I can compare AIRBUS with BOEING for November submissions? Plus, what if I compare different years of AIRBUS and BOEING and compare its performance? I am sorry that I am posting this again but its important.September 8, 2017 at 12:55 pm
@salman – sorry for not answering your query. Yes Boeing and Airbus would be suitable comparators. Don’t worry about the different currencies as using ratios obviates the need to translate currencies (which are not a good idea in the case of drawing comparisons as it introduces an artificial dimension that is not controllable by a company as currency fluctuations are dependent on international currency demands and complicated economic factors. Currency differences may influence company strategies but that is a separate issue to drawing comparisons)
@nzeadall – I’ll answer your detailed query with respect to (1) when I have a spare moment. I have addressed (2) elsewhere on the forum – so please see the query from Chenjerai towards the top of Page 2 and my reply further down.
With (3) if you only do 1 year’s worth of comparisons you are unlikely to get a grade higher than a C. The main company must always be 3 yearsSeptember 8, 2017 at 3:04 pm
Thank you very much for question 2. If I understood correctly your reply, then i think my proposal sounds reasonable.
Regarding Question 3, i meant one year comparison for the competitor only. For my main company, I’ll certainly do 3 years analysis. What i meant is evaluating main company A
Yr 1, Yr 2 and Yr 3 versus competitor B, yr 3 only or should it be main company A
Yr 1, Yr 2 and Yr 3 versus competitor B, Yr 1, Yr 2 and Yr 3.
For Question 1, I’ll wait for your response.
Once again thanks a lot for your precious assistance.September 9, 2017 at 3:42 pm
In Part 2 of RAP, I’ll be mentioning ratio analysis under accounting techniques used.
There are various categories of ratios such as profitability ratios, liquidity ratios, etc and each category has got many kinds of rations such as profit margin, ROCE, etc.
Which ratios do I choose, to briefly comment on?
Also when stating limitations, do I mention them in general for Ratio Analysis or specifically for each ratio?
Please note I’ve chosen the Hotel Industry.September 10, 2017 at 7:57 am
@nzeadall – if the annual report is in GBP use those figures. Trying to deal with differences in currency treatment would (a) over complicate things and (b) mean that you are focusing too much on figures and percentages. What you need to do is look at the bigger picture.
By this I mean spend time doing a good PEST and SWOT. Go over the CEO and directors’ reports for all 3 years and also the year before your analysis period starts. See what major decisions and policies have been implemented and how these relate to PEST and SWOT factors. This should enable you to do a better analysis.
Yes I understood you meant one year only of analysis for the competitor -hence my comment “if you only do 1 year’s worth of comparisons you are unlikely to get a grade higher than a C”. If you hope to get a higher grade then more analytical depth is required including comparing the performances (as opposed to just financial results) for the 2 companies over a full 3 yearsSeptember 10, 2017 at 8:09 am
@accastudentofoman – This is quite basic stuff and I would have thought that if you had a decent mentor this would have been discussed between you??
You need to consider the most important ratios: gross profit and net/operating profit being key and you also along with some liquidity ratios need to look at gearing. There should also be some discussion of investors returns and ratios. I have however always stressed the work is not just about calculating figures and percentages – it is also about explaining what has driven performance (so see the answer immediately above). For the hotel trade you should also consider room occupancy rates,and other KPIs used in the industry. Read the written part of the annual report that precedes the financial statements to find theseSeptember 10, 2017 at 8:57 am
Thanks a ton for your guidance!
You must be logged in to reply to this topic.