Assignment Question:
- You will be aware that there has been a significant amount of press coverage about how energy companies are increasing their prices to customers. However, energy companies claim that their costs are increasing significantly and so they are forced to increase their prices.
In your assignment, you are asked to investigate this issue. To do this, select an energy generating company that operates in the UK and performs a ratio analysis as detailed below.
2. Using an appropriate financial platform (such Financial Analysis Made Easy - FAME; OSIRIS; Morning Star; Annual Reports etc.), obtain financial relevant information for your chosen company for the last 5 years.
3. Extract the following financial ratios (or the necessary information to calculate the ratios), for your company over a period of 5 years as follows:
- Profitability Ratios [Any 3 ratios]
- Liquidity Ratios [Any 2 ratios]
- Gearing Ratios. [Any number]
- Investment Ratios [Any 2 ratios]
4. Critically examine the performance of the company using the ratios extracted over the period under consideration (use graphs of the ratios extracted to support your analysis). Recommend if the company would be a good investment (with the necessary justifications)
5. What are the main weaknesses associated with such analysis?