Ratio Analysis Essay

The aims and objectives of this report are to compare the two companies, Kingfisher Plc. and Home sell Group Plc., using their annual report published for the year 2011. With the help of the financial statements, it will be possible to calculate different ratios that are applicable to the comparison between the two businesses. Through this comments can then be do on the performance of both companies for the year, stating some of the possible factors that could have made affected this. Comparison will be on a year-to-year basis and then between the two companies as a whole.When comparing two companies kindred Kingfisher and the Home Retail Group, there are a few limitations needed to be considered before this is possible. The first would be the different accounting policies that each mint have chosen to adapt to their financial statements this could be in regards of the depreciation or inventory valuation method used for the preparation of relevant statements.a nonher(prenominal) important point to note is that financial statements are based on historical information and therefore this would not be as objective to when we pass off to use them for the comparison. Expanding on this, the closing balances on the statement may make the ratios appear misleading when comparing the two companies for the period, i.e. seasonal sale boost Christmas and forward-looking Year promotion. The main issue that should be considered is the date that they have published their account Kingfisher being 31st January 2011 and Home Retail Group at twenty-eighth February 2011. So it would not be possible to make a more(prenominal) accurate comparison, as the economic conditions may have changed for that one month Kingfisher did not trade.Although it would suggest comparing the two businesses is not ideal, the two companies are somewhat similar. Therefore this should make the approximation more accurate and thus the comparison more meaningful.Kingfisher PLCKingfisher is a company t hat focuses on mainly offering its customers home improvements products for DIY and such likes. Its main retail brand in the UK is B&Q with a market look at of 14% and they are currently top of the market. They are also making a respectable breakthrough in France with their brands, Castorama and Brico Depot taking 21% of the market share with the top place. Moreover they have expanded to Germany, Turkey, Spain, China, Poland and Russia