Financial Analysis and Interpretation
Kier Group Plc vs. Barratt Developments Plc
This report is about the financial analysis and interpretation of two construction companies. Analysis and comparison is based upon 4 broad areas: financial performance, financial position, corporate governance and corporate social and environmental reporting.
Mr Gajender, Student ID- 1025087
Word Count- 4,116
Table of Contents
1.1 Introduction to Companies4
1.1.1 Kier group plc……………………………………………………………………………………………………………………4 1.1.2 Barratt developments plc5
2. Financial Performance5
2.1 Barratt development- financial performance5
2.2 Kier group- financial performance6
2.3 Performance ratio analysis, interpretation and comparison7 2.4 Comparison- (profits, revenues, expenses & employees)8 3. Financial Position8
3.3.1 Relation between Stock liquidity and asset liquidity9 3.4 Structure ratios analysis and Interpretation- Kier group and Barratt group9 3.4.1 Current Ratios9
3.4.2 Liquidity Ratios10
3.4.3 Solvency Ratios10
4. Corporate Governance10
4.1 Transparency and accountability11
4.2 Theoretical approach11
4.2.1 Agency Theory11
4.3 Corporate governance mechanisms12
4.3.1 Board of directors12
4.4 UK corporate governance codes12
4.5 Board structure and Disclosure - Kier group and Barratt developments13 4.6 Remuneration – Comparative aspects13
4.6.1 Remuneration distribution and Policies – Barratt and Kier14 5. Corporate social and environmental reporting15
5.1 Theoretical approach15
5.2 Mini case study- Vodafone 15
5.3 Social reporting- Legislation requirements15
5.4 Carbon emission, waste management and carbon disclosure16 5.5 Corporate responsibilities- policies and strategies17 6. Conclusion and Recommendation17
The purpose of this report is to analyse the financial performance and position of two companies and to compare them. Final part of the report would be to make a recommendation on which company performed better financially and socially. In order to analyse and compare both the company’s performances, following broad areas would be discussed. * Financial performance.
* Financial position.
* Corporate Governance.
* Corporate social and Environmental Reporting.
The companies that have been chosen to analyse are written as follows. * Kier group Plc
* Barratt Developments Plc
1.1 Introduction to companies
1.1.1 Kier group Plc is a construction company based in the UK. Apart from construction, Kier group also has strong position in some other businesses such as Kier Services, Kier Property and Strategic frameworks and alliances. Kier services provide other services such as building maintenance, environmental services, energy solutions etc. Company has divided its services in 6 different sectors and they are commercial, defence, education, healthcare, housing and public sector. Kier group also construct out of UK and have civil engineering and mining businesses spread overseas (Caribbean countries, Middle East and Romania) Whereas Kier property buys or hires the property and develop it. This business also builds private houses to sell.
1.1.2 Barratt Development Plc has been in construction business for more than 50 years and having more than 4,000 employees, this company is known as the biggest house builder of the UK. Barratt’s major business is to build houses and sell them to people. Barratt functions two main house building brands to build houses and they are: * Barratt homes
* David Wilson homes
Barratt also runs a strong district brand called ‘Ward homes’ that mainly functions in areas of South-East UK and Kent.
2. Financial Performance
According to Elliott B....
Bibliography: 1. Kier group home (2013) About Kier [online]. Available at: http://www.kier.co.uk/about/default.asp (Accessed: March 02, 2013)
3. Kier group home (2013) Organisational structure [online]. Available at: http://www.kier.co.uk/about/structure.asp (Accessed: March 02, 2013)
5. Barratt developments plc (2013) key performance indicators [online]. Available at: http://www.barrattdevelopments.co.uk/barratt/en/investor/performance/kpi (Accessed: March 02, 2013)
7. E-notes (2013) Financial Ratios (Encyclopedia of Management) [online]. Available at: http://www.enotes.com/financial-ratios-reference/financial-ratios-176738 (Accessed: March 04, 2013)
9. Barratt plc (2012) Board of directors and company secretary [online]. Available at: http://www.barrattdevelopments.co.uk/barratt/reports/ar2012/governance/board-of-directors.html (Accessed: March 05, 2013)
11. Kier group plc (2012) corporate social responsibility report 2012 [online]. Available at: http://www.kier.co.uk/ar2012/document/Kier_Corporate_Responsibility_Report_2012.pdf (Accessed: March 07, 2013)
13. FAME database (2013) learning resources- Databases [online]. Available at: http://lrweb.beds.ac.uk/accounting-and-finance/full-text-digital-databases (Accessed: March 06, 2013)
15. Tricker, R. (2009) principles, policies and practices- corporate governance, oxford university press, pg. 07
17. Kaey, A. (2013) Introduction and background, the enlightened shareholders value principles and corporate governance, 3rd edition, Rout ledge publishers, pg. 9
19. Cadbury, A. (2002) corporate governance and chairmanship: A personal view, oxford university press.
20. Weetman, P. (2011) Financial and management accounting- An introduction, 5th edition, Essex, Pearson education Ltd, pg. 345-347
22. Elliott, B. & Elliott, J. (2012) Financial accounting and reporting, 15th edition, Essex, Pearson education Ltd, pg. 386, 708-714, 805-828, 842-845.
23. Gopalan, R. (2012) asset liquidity and stock liquidity, Journal of financial and quantitative analysis, 47 (2), pg. 333-359 [online]. Available at: Business source premiere (Accessed: March 09, 2013)
25. Unknown (2008) PFI drives Kier profit surge, public private finance , October [online]. Available at: Business source premiere, (Accessed: March 05, 2013)
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