Diageo Plc Financial Analysis
Introduction
The objective of this analysts report is to whether or not to invest £1 million in the company “Diageo plc”.
This report is divided into five parts. First, the company profile is introduced. Second, the performance overview of Diageo will be summarized. Third, the financial ratios analysis is presented. Then, I have analysed industry competitors comparing with Diageo. Final, after considering key relevance factors, the conclusion of the investment will be revealed.
“DIAGEO” Company Profile
Diageo plc is the world’s leading premium drinks business with an outstanding collection of beverage alcohol brands across spirits, wines and beer categories. These brands include Johnnie Walker, Guinness, Smirnoff, J&B, Baileys, Tanqueray, Captain Morgan, Crown Royal, Gordon’s, Beaulieu Vineyard and Sterling Vineyards wines. Diageo is still a relatively young company because they have only existed in their current form since 1997, however, the brands business have a rich heritage. Diageo is trading in 180 markets with offices in 80 countries. They also have manufacturing facilities across the globe including Great Britain, Ireland, United States, Canada, Spain, Italy, Africa, Latin America, Australia, India and the Caribbean (Diageo annual report, 2010).
“DIAGEO” Performance Overview
In 2010, Diageo performed a good movement. To begin with, Net sales were increased by 5% from £9311 million to £9780 million. Next, an operating profit was raised 6% from £2418 million to £2574 million. Moreover, a basic earnings per share was going up from 64.6p to 65.5, which is 1% equivalent. A recommend full year dividend per share increased by 5.5% from 36.10p to 38.10p (Diageo annual report, 2010).
Financial Ratios
In this part, the ratio was calculated and compared with the previous period. We will see whether there has been an improvement or deterioration in performance.
Profitability
Ratio/Year | 2010 | 2009 | 2008 | 1. Gross Profit Margin | 58.10% | 58.20% |
The objective of this analysts report is to whether or not to invest £1 million in the company “Diageo plc”.
This report is divided into five parts. First, the company profile is introduced. Second, the performance overview of Diageo will be summarized. Third, the financial ratios analysis is presented. Then, I have analysed industry competitors comparing with Diageo. Final, after considering key relevance factors, the conclusion of the investment will be revealed.
“DIAGEO” Company Profile
Diageo plc is the world’s leading premium drinks business with an outstanding collection of beverage alcohol brands across spirits, wines and beer categories. These brands include Johnnie Walker, Guinness, Smirnoff, J&B, Baileys, Tanqueray, Captain Morgan, Crown Royal, Gordon’s, Beaulieu Vineyard and Sterling Vineyards wines. Diageo is still a relatively young company because they have only existed in their current form since 1997, however, the brands business have a rich heritage. Diageo is trading in 180 markets with offices in 80 countries. They also have manufacturing facilities across the globe including Great Britain, Ireland, United States, Canada, Spain, Italy, Africa, Latin America, Australia, India and the Caribbean (Diageo annual report, 2010).
“DIAGEO” Performance Overview
In 2010, Diageo performed a good movement. To begin with, Net sales were increased by 5% from £9311 million to £9780 million. Next, an operating profit was raised 6% from £2418 million to £2574 million. Moreover, a basic earnings per share was going up from 64.6p to 65.5, which is 1% equivalent. A recommend full year dividend per share increased by 5.5% from 36.10p to 38.10p (Diageo annual report, 2010).
Financial Ratios
In this part, the ratio was calculated and compared with the previous period. We will see whether there has been an improvement or deterioration in performance.
Profitability
Ratio/Year | 2010 | 2009 | 2008 | 1. Gross Profit Margin | 58.10% | 58.20% |