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Building analysis

2020-06-24 来源: 51Due教员组 类别: Paper范文

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下下面为大家整理一篇优秀的essay代写范文 -- Building analysis,文章讲述面为大家整理一篇优秀的essay代写范文 -- ,文章讲述Barratt Development PLS是英国的一家大型住宅房地产开发公司,由Greensitt Bros1958年成立,由Lawrie Barratt爵士控制。 (Barratt Development PLS2016年)伯克利集团控股有限公司是英国房地产公司,由Tony PidgleyJim Farrer1976年成立。 (伯克利集团控股有限公司,2016年)。Taylor Wimpey plc是一家大型房屋建筑公司,由弗兰克·泰勒(Frank Taylor)于1921年成立。(Taylor Wimpey plc2016这三家公司都在伦敦证券交易所上市,并且是富时100指数的成分股之一。

 

Building analysis

1. Introduction

Barratt Development PLS is a large residential property development company in the United Kingdom, which was established in 1958 by Greensitt Bros and controlled by Sir Lawrie Barratt. (Barratt Development PLS, 2016)

Berkeley Group Holdings plc is a British property company established in 1976 by Tony Pidgley and Jim Farrer. (Berkeley Group Holdings plc, 2016).

Taylor Wimpey plc is a large house-building company established by Frank Taylor in 1921. (Taylor Wimpey plc, 2016)

The three companies are all listed on the London Stock Exchange and one of constituents of the FTSE 100 Index.

2. Basic Financial Data

The basic financial data for Barratt, Berkeley and Taylor Wimpey are listed as follows. The period is from the year of 2011 to 2015. Overall, the three construction companies’ financial situation is not bad, which is mainly due to the boom and recovery of the property market in the United Kingdom.

Barratt Financial Data

Item / Year

2010

2011

2012

2013

2014

Balance Sheet

Total Assets

5,276.80

4,775.30

4,753.10

4,854.40

5,144.30

Current Assets

3,954.90

3,431.40

3,427.60

3,606.30

3,895.90

Inventory

3,342.30

3,296.80

3,226.60

3,209.80

3,508.60

Current Liabilities

1,038.70

1,038.40

1,014.00

1,196.00

1,160.10

Trade Receivables

66.90

64.40

54.40

79.20

118.00

Income Statement

Turnover

2,035.20

2,035.40

2,323.40

2,606.20

3,157.00

COGS

1,855.20

1,807.60

2,027.20

2,247.00

2,627.60

Gross Profit

180.00

227.80

296.20

359.20

529.40

EBIT

86.20

145.40

197.70

264.90

459.40

Interest Charges

249.10

156.90

97.70

160.10

68.80

Profit Before Tax

-162.90

-11.50

100.00

104.80

390.60

Basic Earnings Per Share

-14.50

-1.40

7.00

7.70

31.20

Annual report of Barratt from 2010 to 2014, Official Website of Barratt

Generally speaking, from 2010 to 2014, the Company is growing continuously. In terms of total assets, turnover, gross profits, profit before tax and basic earnings per share, these indicators are increasing annually, which shows the Company has an upward trend.

Berkeley Financial Data

Item / Year

2010

2011

2012

2013

2014

Balance Sheet

Total Assets

1,728.00

2,090.00

2,153.40

2,496.90

2,950.30

Current Assets

1,660.00

1,976.00

1,969.60

2,260.30

2,770.40

Inventory

1,254.00

1,613.00

1,851.70

2,066.70

3,508.60

Current Liabilities

789.00

1,081.00

1,010.70

1,031.10

2,481.20

Trade Receivables

58.00

97.00

115.20

126.80

159.00

Income Statement

Turnover

615.00

743.00

1,041.10

1,372.60

1,620.60

COGS

449.00

534.00

745.80

969.20

1,111.70

Gross Profit

166.00

209.00

295.30

403.40

508.90

EBIT

115.00

148.00

226.60

280.30

390.30

Interest Charges

5.00

12.00

11.80

9.60

10.30

Profit Before Tax

110.00

136.00

214.80

270.70

380.00

Basic Earnings Per Share

60.00

72.10

121.00

160.00

221.80

Annual report of Berkeley from 2010 to 2014, Official Website of Berkeley

For Berkeley, it also shows an upward trend. From 2010 to 2014, total assets and turnover are increasing year by year. Profit before taxes are all positive and increasing, which shows a strong momentum.

Taylor Wimpey Financial Data

Item / Year

2010

2011

2012

2013

2014

Balance Sheet

Total Assets

4,325.20

3,372.80

3,550.30

3,565.10

4,139.80

Current Assets

3,795.60

2,917.70

3,084.90

3,160.50

3,813.30

Inventory

3,342.30

2,686.60

2,788.80

2,928.80

3,490.10

Current Liabilities

1,127.50

844.80

865.70

829.80

958.20

Trade Receivables

252.20

142.80

198.00

229.30

213.70

Income Statement

Turnover

2,603.30

1,808.00

2,019.00

2,295.50

2,686.10

COGS

2,264.20

1,520.30

1,662.70

1,800.60

2,046.50

Gross Profit

339.10

287.70

356.30

494.90

639.60

EBIT

134.90

157.40

231.30

359.40

500.00

Interest Charges

206.20

78.80

23.60

53.20

31.20

Profit Before Tax

-71.30

78.60

207.70

306.20

468.80

Basic Earnings Per Share

8.10

3.10

7.30

8.50

11.60

Annual report of Taylor Wimpey from 2010 to 2014, Official Website of Taylor Wimpey

From 2010 to 2014, the Company has presented a growth trend. All indicators of total assets, turnover and EPS are all increasing by a large margin annually.

It can be inferred from the financial data of the three companies that the householding industry is booming in the United Kingdom.

3. Environment Analysis

3.1 PEST Analysis

For the three companies, they are in the same market in the United Kingdom, so they are facing similar macro environment analysis. PESTE analysis methodology can be applied in this dimension. PEST means the five elements in the aspects of politics, economy, society, technologies and environment. (Wikipedia, 2015)

In the first place, in the political perspective, due to the financial crisis in 2007, the British government has taken some positive and decisive market rescue measures. In addition to the nationalization of the bankruptcy of financial institutions, interest rates and other measures to deal with the liquidity crisis, the government has introduced policies for loan funds to ease the credit crisis and stimulate the housing mortgage loan market which help real estate market stabilized.

The result of the government policies can be inferred from the current ration and liquidity ratio.

Current Ratio

Company / Year

2010

2011

2012

2013

2014

Barratt

   3.81

     3.30

      3.38

      3.02

      3.36

Berkeley

   2.10

     1.83

      1.95

      2.19

      1.12

Taylor Wimpey

   3.37

     3.45

      3.56

      3.81

      3.98

Current ratio can reflect the short-term solvency of enterprises and 2 is a reasonable indicator. From the table, it can be clearly inferred that the three companies’ current ratio is steady in the five years. For Barratt and Taylor Wimpey, the current ratio is larger than 2, which means the liquidity situation is sound in the two companies. For Berkeley, the current ratio is fluctuated around 2, therefore the liquidity situation is also not bad for the Company.

 

Liquidity Ratio (quick ratio or acid test ratio)

Company / Year

2010

2011

2012

2013

2014

Barratt

   0.59

     0.13

      0.20

      0.33

      0.33

Berkeley

   0.51

     0.34

      0.12

      0.19

     -0.30

Taylor Wimpey

   0.40

     0.27

      0.34

      0.28

      0.34

Liquidity ratio can also reflect the short-term solvency of enterprises. From the table, it can be clearly inferred that the three companies’ liquidity ratio is steady in the five years. However, the ratio is below 1, which means the current risk is relatively high and ability to repay to the loan is low.

 

In the second place, in the economic perspective, British real estate developers have diversified financing channels. In addition to indirect financing from banks, bonds and equity financing channels, real estate companies can take a higher risk. On the other hand, from the point of view of the structure of bank loans, the Bank of England prioritizes personal business. Personal business gives priority to individual housing mortgage loans and development loans and corporate loans accounted for a relatively low proportion, which is conducive to the rational distribution of the real estate market risk.

The sound economic situation can be inferred from the gross profit margin and net profit margin.

Gross Profit Margin

Company / Year

2010

2011

2012

2013

2014

Barratt

8.84%

11.19%

12.75%

13.78%

16.77%

Berkeley

26.99%

28.13%

28.36%

29.39%

31.40%

Taylor Wimpey

13.03%

15.91%

17.65%

21.56%

23.81%

 

Net Profit Margin (Operating Profit Margin)

Company / Year

2010

2011

2012

2013

2014

Barratt

4.24%

7.14%

8.51%

10.16%

14.55%

Berkeley

18.70%

19.92%

21.77%

20.42%

24.08%

Taylor Wimpey

5.18%

8.71%

11.46%

15.66%

18.61%

 

After calculation of the gross profit margin and net profit margin, it can be clearly noticed that the margin demonstrate a upward tendency. For all three companies, they margin has been increased by a large proportion, which shows the increase of revenue and the increase of the cost of sales. Especially in the year of 2013 and 2014, the gross profit margin surged by a large percentage, which demonstrates the sound performance of British property market.

In the third place, in the social perspective, Britain's population structure makes the demand for housing has a certain guarantee. And the lack of structural supply of housing supports the prices of housing market. At the same time, with the aging of the population and the increasing trend of the new immigrant population, the demand for real estate has continued to grow. Barratt is taken as an example to shows the situation of large demand of properties in the United Kingdom.

Number of Housing Completed

Company / Year

2010

2011

2012

2013

2014

Barratt

10,000

11,000

125,000

13,663

14,838

It can be inferred that the number of housing completed is increasing annual for Barratt in order to meet the demand of the market in the United Kingdom.

Accident Incident Rate

Company / Year

2010

2011

2012

2013

2014

Berkeley

3.83

3.63

2.69

2.99

4.12

It can be noticed from the table that the accident incident rate has a downward tendency, which means the workers are safer than before.

In the fourth place, in the technological perspective, low-carbon housing has stimulated the market. In the low carbon market, low carbon real estate enterprises can makes profit, making up the loss during the initial stage of carbonization and research and development. The property companies can control the cost in the consumer acceptable range. Low carbon real estate price can be regulated by the market regulation, thus affecting the supply and demand and the whole society of low carbon concept.

The low-carbon industry is demonstrated in three aspects. Firstly, carbon trading market has been established, promoting low carbon real estate enterprises get the profits with the carbon emission reduction and constrain enterprises of exceeded carbon emissions to pay the price for the high emissions. Secondly, environmental information disclosure system has been established. The environmental factors, as the main study object, have been released to the public, supervising the enterprises to reduce carbon emissions. Thirdly, the green capital market access system has been implemented to help low carbon financing for real estate enterprises, providing more convenient financial support for low-carbon development.

Stock Turnover Period

Stock turnover period is a good way to demonstrate the less frequency of shopping in the supermarket. This ratio indicates the average number of days that items of stock are held for.  Although it can only provide an approximation, it is useful to identify the trend from year to year.

Company / Year

2010

2011

2012

2013

2014

Barratt

 657.58

   670.30

    587.27

    522.76

    466.63

Berkeley

1,019.40

   979.83

    847.82

    737.83

    915.26

Taylor Wimpey

 538.79

   723.72

    600.99

    579.51

    572.42

From the table, it can be clearly identified that the stock turnover period is shortened with the time passed. For the property market, the stock turnover day is relative long. This means that the houses are held in hands for a long time. However, for the three companies, the stock turnover rate is relative stable and has a downward trend.

3.2 Five-forces Analysis

For strategic environmental analysis, Michael Porter's Five Forces Model can be applied to carry out the analysis. According to Michael Porter's Five Forces Model, there are five forces in the industry: threat of potential entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitutes and industry rivalry. (ME Porter, 2009) For the three companies, they are all in the same market in the United Kingdoms.

For the potential entrants, due to the high barriers to entry, product differentiation, high capital requirements and the government policy restrictions, the threat of new entrants is relative small. For Barratt, Berkeley and Taylor Wimpey, they have formed a strong basis to face the new entrants. Due to the characteristics of the industry, they don’t have worried about the new entrants.

For the bargaining power of suppliers, for these three companies, there is no substitute for the real estate market, so there is only one supplier and the bargaining power of suppliers can be improved. In the United Kingdom, real estate supplier's bargaining power is relatively strong. In the face of their threat of raising prices and lowering the quality of products, customers often have no way but to compromise.

Number of Employees

Company / Year

2010

2011

2012

2013

2014

Barratt

3,500

4,000

4,500

5,003

5,755

It can be noticed that the number of employees is increasing every year due to the boom of the property market.

For the bargaining power of buyers, the buyers are in the negative position. In the United Kingdom, the market demand surpasses the market supply, so the buyers have to accept the prices. On this point, the buyers are in a disadvantageous position.

For threat of substitutes, due to the characteristics of the houses, there are fewer substitutes. In order to obtain the living space, the buyers have no choice but to accept the prices of the developers and buy the houses.

For industry rivalry, they have to face the fierce competition from the rivals in the same market in the United Kingdom. They have to compete with each other and face the challenges from different rivals like Bovis Homes. With the development of low-carbon houses, they have to face more challenges.

4. Other Financial Ratios

1. Return on Capital Employed

Profit before interest and taxation   x  100

Total assets minus current liabilities

Company / Year

2010

2011

2012

2013

2014

Barratt

2.03%

3.89%

5.29%

7.24%

11.53%

Berkeley

12.25%

14.67%

19.83%

19.12%

83.20%

Taylor Wimpey

4.22%

6.23%

8.62%

13.14%

15.72%

From the table, it can be clearly inferred that three companies’ return on capital employed is increasing every year, especially in the year of 2015. This means that the yield rate of capital is sound and the industry is in a strong-momentum situation.

 

2. Interest Cover

Profit before interest and tax

     Interest charges

Company / Year

2010

2011

2012

2013

2014

Barratt

   0.35

     0.93

      2.02

      1.65

      6.68

Berkeley

  23.00

    12.33

     19.20

     29.20

     37.89

Taylor Wimpey

   0.65

     2.00

      9.80

      6.76

     16.03

Interest cover is ratio used to measure the ability to pay interest of a loan. From the table, it can be clearly inferred that the three companies’ interest cover is increasing every year, especially in the year of 2015. Therefore, the risk of interest repayment is quite low.

 

3. Debt Collection Period

Average trade receivables      x 365

       Credit Sales

Company / Year

2010

2011

2012

2013

2014

Barratt

  12.00

    11.77

      9.33

      9.36

     11.40

Berkeley

  34.42

    38.07

     37.20

     32.18

     32.18

Taylor Wimpey

  35.36

    39.87

     30.81

     33.97

     30.10

This ratio represents the speed of the collectiveness of trade receivables. The smaller the ratio is, the better the ability of the collectiveness is. From the table, it can be inferred that the debt collection period is relative long, which is due to the characteristics of the property market. However, there is a trend that the period is decreasing annually.

4. Earnings Per Share (EPS)

Company / Year

2010

2011

2012

2013

2014

Barratt

 -14.50

    -1.40

      7.00

      7.70

     31.20

Berkeley

  60.00

    72.10

    121.00

    160.00

    221.80

Taylor Wimpey

   8.10

     3.10

      7.30

      8.50

     11.60

This data reflects the yield of per share. From the table, it can be clearly noticed that the three companies’ share yield is in a growth performance due to the sound business operations and prosperity of the property market.

 

5. Dividend Yield

Dividends per share   x 100

 Current market price of the share

Company / Year

2010

2011

2012

2013

2014

Barratt

0.43%

-

1.91%

3.23%

1.5%

This data reflects the dividend payment situation. From the table, it can be inferred that dividend yield of Barratt is increasing annually.

 

5. Conclusion

In a nutshell, the three companies are in a promising industry with a strong momentum. After analyzing the financial ratio and non-financial indicators, it can be inferred that the Company are well performed in many perspectives like EPS, total assets, total revenue and profits.

 

 

Reference

Barratt Development PLS. (2016). “About Us”. Website.

 

Berkeley Group Holdings plc. (2016). “About Us”. Website.

 

Taylor Wimpey plc. (2016). “About Us”. Website.

 

Annual report of TESCO from 2010 to 2014, (2015), Official Website of Barratt Development PLS.

 

Annual report of Morrisons from 2010 to 2014, (2015), Official Website of Berkeley Group Holdings plc.

 

Annual report of Sainsbury's from 2010 to 2014, (2015), Official Website of Taylor Wimpey plc.

 

ME Porter. (2009). Porter's five forces model. Harvard Business Review, 34:50-55

 

 

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