Ratio Analysis Essay

The aims and objectives of this report argon to compargon the twain companies, Kingfisher Plc. and Home retail Group Plc., using their annual report publish for the year 2011. With the help of the financial statements, it will be practical to calculate different ratios that are relevant to the comparison between the two businesses. Through this comments can wherefore be made 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 like 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 corporation have chosen to lodge to their financial statements this could be in regards of the depreciation or inventory military rank method customd for the preparation of relevant statem ents.Another important take down to note is that financial statements are based on historical info and therefore this would not be as objective to when we come to use them for the comparison. Expanding on this, the closing balances on the statement may make the ratios erupt misleading when comparing the two companies for the period, i.e. seasonal sale boost Christmas and young 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 28th February 2011. So it would not be possible to make a more absolute comparison, as the economic conditions may have changed for that ane 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 that focuses on generall y offering its customers home improvements products for DIY and such likes. Its main retail brand in the UK is B&Q with a market share of 14% and they are presently make it of the market. They are also making a respectable find 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