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Swot Analysis Of Persimmon

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Swot Analysis Of Persimmon
Profitability ratios

Net profit margin of Barratt was 2.87% in 2013 and 9.67% in 2014 respectively. It means that in 2013 the company managed to transform 2.87% of its sales into net income and in 2014 it managed to transform already 9.67% of its sales into net income. In other words, in 2013 the company gained 2.87 pounds of net income per 100 pounds of revenue. In 2014 this number significantly increased and became 9.67 pounds of net income per 100 pounds of revenue. Persimmon had a higher net profit margin in 2013 and 2014 than Barratt and it was 12.33% and 14.45% respectively. So Persimmon earned 12.33 pounds of net income per 100 pounds of revenue in 2013 and 14.45 pounds of net income per 100 pounds of revenue in 2014.

ROE of Barratt …show more content…
In 2013 each pound of capital employed generated 6.91 pounds of profit. In 2014 there were 10.31 pounds of profit for each pound of capital employed. There was an increase in ROCE in 2014 which is favourable for the company. ROCE of Persimmon was higher than this ratio of Barratt both in 2013 and 2014. In 2013 Persimmon ROCE was 14.93% and each pound of the capital employed generated 14.93 pounds of profit for the company. In 2014 this indicator increased and became 18.44% which is significantly higher than ROCE of Barratt Development in 2014 which was 10.31%.

Liquidity ratios

Current ratio of Barratt was 3.02 in 2013 and 3.36 in 2014 respectively. The current ratio was high in both 2013 and 2014 and the company was able to pay off its current liabilities very easily. The company's current assets were several times more than the current liabilities both in 2013 and 2014. The company used its current assets efficiently both in 2013 and 2014. The current ratio of Persimmon was similar to the ratio of Barratt during that period and it was 3.35 in 2013 and 3.42 in 2014. So Persimmon would have paid off its obligations if they had come due in 2013 and 2014.

Quick ratio of Barratt was 0.33 in 2013 and 2014 and this ratio of Persimmon was 0.39 in 2013 and 0.53 in 2014. It means that in 2013 and 2014 both companies couldn’t pay off its current liabilities with quick assets
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