Finance analysis of Whitbread Financial Ratios Assignment

Finance analysis of Whitbread Financial Ratios - Assignment Example Ratio analysis is one of the methods used to carry out a company financial analysis to determine the performance of the company in question in relation to other companies in the industry in which such a company operates and also in relation to its own operations over time. The past performance of the company as shown by the ratio analysis as well as other methods that can be used in the company financial analysis can be used as an indicator of the company’s future performance in terms of the company’s liquidity, profitability, working capital management, asset management, efficiency of the company’s management, cash management as well as investor valuation ratios in order to help in planning and assessment of the company’s strategies as well as for use by investors to make a decision on whether to invest in the company or not.... evaluate the company’s performance against one of its competitors which is called Restaurants Group Plc and finally offer a recommendation on the company’s performance over the two year period between year 2010 and year 2011 and also in relation to the competitor Restaurants Group Plc. Description of the industry The United Kingdom Restaurant industry has been very vibrant over the last three years despite the recession that greatly affected the global markets within the period between year 2008 and year 2010 and the debt crisis in the Euro Zone in year 2011. Based on Oxford Writers, restaurants are a very vital part of the culture of the people of the United Kingdom (Oxford Writers 2012). The industry is comprised of hotel operators, restaurants, pubs and pub restaurants among other services that go hand in hand with the food business. The industry is mostly affected by the seasonal food business due to the fact that the agricultural produce in most of the agricultural areas in the United Kingdom is seasonal in nature. In addition to this, the guests in these restaurants are also seasonal. For instance more people eat out during summer that during winter therefore indicating that hotel business will boom in summer and decline in winter. On the other hand, holidays such as Christmas, Easter etc also increase the number of customers in restaurants therefore increasing profitability. As at 27th April 2012, Whitbread Plc was the largest company in the restaurants industry by market capitalization with a market capitalization of ?3.39 billion followed by Greene King Plc with a market capitalization of ?1.1 billion, followed by Mitchells & Butlers Plc with a market capitalization of ?1.08 billion, followed by Domino’s Pizza UK & Ireland Plc with a market