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1、Q1Financial analysis can provide exact information of the enterprises financial position and operating results to the information users, and also provide information about the future. The information users are including the business managers, owners, creditors, government agencies, etc. Managers can
2、 determine the management state of a company, carry out various business decisions through the enterprise financial analysis.The summary financial statements are the comprehensive report of the companys financial situation, operating performance and development trend. We can get a thorough understan
3、ding about the past and the future of the operating conditions of the business. We can also get different information in accordance with the different analysis. Then we can use these information in a variety of decision-making, the management of the company take advantage of the results of these ana
4、lyzes for a variety of operating decisions.The following I make an analysis about the Titanic Plc, including the profitability, capital operation ability and development capacity. In the process of analysis, I take the macro economic environment and government policies into consideration. I make a d
5、etail analysis about the problems of the Titanic Plc business. The purpose is to solve the Titanic Plc business go from bad to worse state, to a certain extent, improve the companys operating efficiency, and point out the direction of future development of the company. In the following analysis the
6、Du Pont financial analysis system will be used.Titanic plc, a publicly quoted company, operates a chain of bars and public houses throughout the Midlands and Northern England. It has 30 outlets in 20 different towns and cities, which serve a range of beers, spirits and soft drinks. None of the compa
7、nys outlets serve food. (1) Profitability AnalysisProfitability of the business refers to the ability of enterprises to make profit, the purpose of the profitability analysis is different company by different people. Enterprise managers use profitability indicators to evaluate the companys performan
8、ce, and found the problem that exists in management. In 2012, Titanic Plc achieved the business income is 43.6 m. There has been a 30 percent decline compared with the year of 2011, the downward trend is very obvious. The companys profitability has declined in the last two years. We can see from the
9、 summary comprehensive income statement the cost of sales of 2012 decline 9 m compared to the year of 2011, the drop of the percentage 25 percent. The distribution and the cost of the administration is 16.2 m in the year of 2012, there is only less than eight percent decline compared with 2011. So w
10、e can clearly see that the decline of the revenue is higher than the decline of the cost items, and this is the main reason of the situation of the decline of the profit.Figure 1: The Pie Chart of the Item of Titanic Plcs Income Statement in 2012Figure 2: The histogram of the Item of Titanic Plcs In
11、come Statement in 2010-2012 Figure 3: The ratio of Titanic Plcs profitability in 2010-2012 201220112010Return on equity (ROE)0.89%24.66%32.83%Net profit margin0.46%8.91%10.92%Return on investment(ROI)0.46%26.44%11.88%Return on equity (ROE) = Profit for the period / Total equityThis ratio tells us th
12、e earning power on shareholders book value investment, and is frequently used in comparing two or more firms in an industry. A high return on equity often reflects the firms acceptance of strong investment opportunities and effective expense management. Titanic Plcs ROE is 32.83% in 2010, but this r
13、atio is only 0.89% in the year of 2012，which suggests that the profitability of the Titanic Plc is lower than before.Net profit margin= Profit for the period / RevenueThe net profit margin is a measure of the firms profitability of sales after account of all expenses and income taxes. It can tell us
14、 a firms net income per pound of sales. For Titanic Plc the ratio is 0.45 percent out of every sales pound constitute after-tax profit in 2012，and in 2010 this ratio is at the level of 10.92%, we can see that there is a obvious drop in the ratio. We know that if the net profit margin is falls, it me
15、ans that the cost of sales has increased. This occurrence, in return, may be due to lower price or lower operating efficiency in relation to volume.Return on investment (ROI) = Profit for the period / Total assets Return on investment is also a profitability ratio that relates to the profits to inve
16、stment. We can see that in 2010 the ratio is 11.88%, which is relatively higher than the average level at the industry, but in 2012 this ratio is 0.46%. There is a 10 percent download in ROI, so the directors of Titanic should find the reason of this phenomenon.(2) Operating Capacity Analysis Figure 3: The ratio of Titanic Plcs operating capacity in 2010-2012201220112010I
