Monday, January 27, 2020

Evaluation of Games Workshop and Hornby Businesses

Evaluation of Games Workshop and Hornby Businesses In a company or a business, the owner would want to evaluate his business i.e. whether the business is making a profit or loss and would want to compare it with other companies or its competitors in the same industry. To know the performance of a company, you need to look at more than just easily attainable numbers like sales, profits and total assets. To know the real picture of a company, we must be able to read between the lines of the financial statement. Hence there are many comparative ratios to identify the strengths and weakness of the company. These ratios will help the public (outsiders) to make decisions while investing in companies at the stock market. Ratio analysis helps us to understand the risk we must be taking. The basic source of these ratios is the companys profit and loss account and balance sheet as it contains all important information about the company. Financial ratios are useful indicators of a firm or companys performance and financial situation. The two company ratios we are going to compare are Hornby and Games PLC. Both the companies belong to the same industry. GAMES WORKSHOP Europes foremost professional P.C. and video game retailer is Games group. It is the only company in the gaming sector to be listed on the London Stock Exchange. Outstanding customer service and a specialist offer are at the heart of GAMES Group growth. HORNBY PLC HORNBY PLC is UKs Model Railway manufacturer. Frank Hornby founded the company in 1901 and launched trains until it was bought by his competitor Tri-Ang in 1964. http://en.wikipedia.org/wiki/Hornby_Railways. It is recognised for the construction of its model train sets, hobby (radio controlled cars) and toy production. It is an incorporated limited company, operating in the UK. Return on Capital Employed (ROCE). Return on Capital Employed (ROCE). ROCE = ____PBIT ___(Operating Profit)___ x 100 Capital Employed (FA + CA CL) Ratio on capital employed indicated the productivity and success of a companys capital investment. According to the formula we take operating profit or PBIT and divide it by the capital employed in the business i.e. fixed asset and working capital. In the two companies, the ROCE for Games workshop in the year 2008 was 5.48%, 2009 was 17.26% which was lower compared to 27.98% in the year 2010. This indicates that Games workshops ROCE has increased which is a positive sign as the more the returns of the capital employed, its better for the firm. Whereas Hornby Plc.s ROCE in the year 2010 has decreased from17.67% which was in 2009 and 29.47% in 2008 to 12.65% which is a negative sign as the return on capital employed is lesser than the rate at which the company borrows. Return on Sales (ROS) ROS = _PBIT_ x 100 Sales ROS also known as operating profit margin tell us about the companys operational proficiency. According to the formula, we consider operating profit or PBIT and divide it by the sales in the organisation. In the above two companies Games workshops ROS was 2.31% in 2008, 7.17% in 2009 and has increased to 12.68% in 2010. This indicates that games workshop is growing more efficiently and is more profitability. Whereas in Hornby the ROS for the year2008 was 16.85%, in 2009 was 11.20% and it decreased in 2010 to 9.27%. A decreasing ROS indicates financial trouble for the company. When we compare Hornby and Games workshop together, we get to know that Games workshop has a higher ROS which indicates a profitable organisation compared to Hornby. Asset turnover Asset turnover = ___Revenue____ Capital Employed Asset turnover is the amount of sales generated for every pound that is worth the asset. We consider the revenue of the company and divide it by the capital employed. In the above companies, the asset turnover for both the companies are low but Hornby has a lower asset turnover of 1.36% in 2010 compared to Games workshop thats asset turnover is of 2.20%. This indicates that games workshop has a higher asset turnover which is better. This also indicates pricing strategies which the company undertakes as companies with a low price margin who have a higher asset turnover and vice versa. Current Ratio Current Ratio = _Current Assets_ Current Liabilities Current Ratio comes under the heading of Liquidity ratio. Liquidity means cash a business holds during the financial year. Current Ratio is a liquidity ratio which tells us the ability of the company to pay its short term obligations. Short term obligations are obligations which are under 12 months. The formula tells us that the ability to pay back short term borrowings with its short term assets. In the above case Games workshop has a higher current ratio compared to Hornby, though the difference is not that large, but still Games workshops current ratio in 2010 is 2.03% while Hornby in 2010 is 2.10%. This indicated that Games workshop is capable to pay their obligations and vice versa. If the ratio was under 1 it would indicate that the company cannot pay its obligations. Liquidity Ratio (Acid Test Ratio) Liquidity Ratio = Current Assets Stock Current Liabilities Acid test ratio is a severe or a tough ratio which indicates whether the firm has enough short term assets to cover its immediate liability without selling out stock. The acid test ratio for Games workshop in 2008 was 0.9, in 2009 was1.14 whereas it increased in 2010 to 1.48. Hornby has a low acid test ratio in 2009 which was 0.72 but it increased to 1.37 in 2010. This indicates that Games as well as Hornby, both companies can pay off their liabilities as if the acid test ratio was less than 1 then the company has to be warned. Even if the acid test ratio is lower than the working capital ratio, it shows that the company is highly dependent on inventory. Cash Ratio Cash Ratio = Cash_____ Current Liabilities Cash ratio is the companys total cash balance and the cash equivalents to its current liabilities. Cash ratio is helpful to measure the liquidity of a company. In the above case, Games workshop has a much higher cash ratio in both the years i.e. in 2009 0.57 and in 2010 it was 0.92, whereas Hornby has a very low cash ratio from 2008 which was 0.07, in 2009 it decreased to 0.02 but it increased to 0.53 in 2010. This indicates how quickly the company can pay of its creditors. Hence creditors will decide seeing the cash ratio of the company. Stock turnover Stock turnover = _COGS_ Stock Stock turnover ratio shows how many times over the business has sold the value of its stocks during the year. In the above case, Games workshop has a higher stock turnover than Hornby. This is because in the year 2008, Games workshop had 3.24 as its stock turnover, in 2009 it was 3.36 and it decreased I 2010 to 3.02 which is a negative point. Whereas Hornby has a lower stock turnover compared to Games workshop. This indicates higher the stock turnover, the better it is for the company as then money is held up for a lesser time in stocks. Stock Period Stock Period = 365____ Stock turnover Stock period is the number of days where the average money is held up in stocks. It is calculated by dividing stock turnover by 365 days. This gives the actual picture of how many days the stock is in the warehouse. In the above diagram, it shows that in the year 2008 and 2009 Games had a stock period of 113 and 109 days while Hornby had a stock period of 166 and 164 days respectively. In the year 2010 Games workshop had a stock in warehouse for 121 days while Hornby had it for 138 days. This indicates the longer the stock is in warehouse, it is bad for the business as the money is not available to be used elsewhere. Hence Hornbys stock is available for a longer period than Games workshop. Debtor Period Debtor Period = Debtors x 365 Sales Debtor period is the average number of days credit given to customers i.e. how long does it takes the company to get its money. In the above case, the debtor period for Games workshop has decreased from 33 days in 2008 to 29 in 2009 and 2010 respectively. Whereas in Hornby the debtor period has increased compared to 2008 but has decreased to 75 days compared to 2009. This indicates that a lesser number of days are good as the debtors could trust the company. But if the company takes a long time to repay, it is bad, Hence Games workshop is better than Hornby as Games workshop has lesser number of days compared to Hornby. Gearing Ratio Industry Analysis Hornby PLC The toys and games industry has survived in the UK for 70 years but in 2009, model vehicles and outdoor games had a negative growth due to the economic recession. Customers preferred indoor games and activity construction toys since it did not require them to leave their houses, during this period. The economic downturn also caused some companies in the industry to stop business and others were bought by larger companies. There has also been an increase in demand for movie based toys and video games, which are easier to produce than other toys. As such, Hasbro, Mattel and Lego are favoured for this reason. The retail outlets prefer to stock video games as a result of its increase in demand and also because it takes less shelf space. The UK market is dominated presently by Husbro, which has the largest market share, Mattel and Lego. Passport GMID Traditional Toys and Games United Kingdom http://www.portal.euromonitor.com/Portal/ResultsList.aspx HORNBY PLC is UKs Model Railway manufacturer. Frank Hornby founded the company in 1901 and launched trains until it was bought by his competitor Tri-Ang in 1964. http://en.wikipedia.org/wiki/Hornby_Railways. It is recognised for the construction of its model train sets, hobby (radio controlled cars) and toy production. It is an incorporated limited company, operating in the UK. The company has created a niche market (train sets) and deals with suppliers all over the world for different railway products. Property owners, worldwide, want to engage with Hornby, in awarding license for Hornby products because of its specialisation and popularity . The key focus of the company is to ensure that the model railway business succeeds, by continually dealing with supply chain issues. Research and Development is also an important factor to its success. The following companies are subsidiaries to the group; Hornby Hobbies Ltd UK Hornby America Inc USA Hornby Espana S.A Spain Hornby Italia s.r.l Italy Hornby France S.A.S France Hornby Deutschland GmbH Germany There are individual targets for each subsidiary as regards growth and profit. It is monitored from time to time and based on current circumstances, future adjustments are made. http://www.hornby.com/investor-relations/ Horbys Competitors Tri-Ang Model railway producer Bachmann Europe Plc Model railway producer GraFar Model railway producer Model rail UK Model railway parts builder New railway Modellers Model railway builder Heywood Model Railway Group Model railway producer Hasbro Board (monopoly, scrabble etc), Star Wars movie franchise Mattel Superman, Batman, Harry Potter movie franchise Lego Activity and construction games Fun Collectibles Latest kidscrazes toys and games Wind Designs Flying toys, yo-yos, juggling equipments and kites Map Toys Toys and games Richard Edwards Card based products Revell Model kit toys Cartamundi Card games Ravensburger Puzzles and 3D Action games Cambridge Brainbox Educational Electronic kits Games Workshop Tabletop fantasy and futuristic battle games Thumbs Up Helicopters and AK 47 Guns Rainbow Productions Costume character production http://www.toynews-online.biz/marketplace http://www.holtmodelrailways.com/ http://www.modelrailuk.co.uk/ Home http://www.mcvuk.com/search/news/hornby+plc Customers Games retail stores Children Wholesalers Market Contribution and Share In 2008, there was a fall in interim pre-tax profits from  £2.7m to  £1.8m and this reduced the expected profit by December that year. Suppliers in China were challenged with the increase in labour and raw materials, therefore Hornby increased price by 10% to support China. http://www.ft.com/cms/s/0/65fd8c42-ec57-11dd-a534-0000779fd2ac.html Although sales in Europe fell by 15%, the Chief Executive was confident that Hornby would excel because of its quality hobby brand. On November 7th 2008, Hornbys shares dropped to 118.5p from the initial 300p which it maintained from the beginning of 2007. http://www.ft.com/cms/s/0/f57bef7e-ad34-11dd-971e-000077b07658.html#axzz14clXbHtA Hornby Plc contributes to charity every year. It donated  £15,354 in 2008 and  £21,635 in 2009 Hornbys % Breakdown of Company shares for Toys and Games in the UK COMPANY 2005 2006 2007 2008 2009 2010 Hornby Plc 1.1 1.1 1.1 1.0 Passport GMID Country Report Country Market Insights http://www.portal.euromonitor.com/Portal/Statistics.aspx Future Forecast In order to make profit, since the demand for video games and movie based toys have increased in the UK market, Hornby Plc should study the demand of the customers and work around producing what the customers need. There may be a problem in the future to fund research and development. Hornby Plc should be prepared for economic crisis. In 2010, the group is financially strong after a difficult trading period and there is a continuous increase in the demand for its products. Passport GMID Toys and Games United Kingdom http://www.portal.euromonitor.com/Portal/ResultsList.aspx Hornbys China engine unstuck on dollar strength By David Blackwell and Maggie Urry Published: January 27 2009 10:22 | Last updated: January 27 2009 16:56 http://www.ft.com/cms/s/0/65fd8c42-ec57-11dd-a534-0000779fd2ac.html Hornby sees fall in outsourcing benefits By David Blackwell Published: November 8 2008 02:00 | Last updated: November 8 2008 02:00. Page 26 http://www.ft.com/cms/s/0/f57bef7e-ad34-11dd-971e-000077b07658.html#axzz14clXbHtA http://www.toynews-online.biz/marketplace Games Workshop The Toys and Games industry in the UK is a gradually growing market, mostly due to their largest group of customers, children around 2-10 years of age. Children often want and need toys to entertain and occupy themselves with (Competitive Context-Figure 9). Even with recession, most parents do not necessarily cut down on spending on toys for their child as they are willing to spend what little disposable income they have on their kids and buying toys that they wanted for them (MINTEL-Internal Market Environment-Figure 1). In 2007, the toys and games sector in the UK was valued at around  £2.2 billion, a significant rise of 22% than when in 2003 (MINTEL- Toys and Games-UK-Nov 2008-Market in Brief: A strong market in tougher times). Christmas is usually the cause of the highest booster for sales of toys and games, bringing in half the total number sales in a year (MINTEL-Internal Market Environment-Key Points). Games Workshop PLC In 1975, Games Workshop PLC, was established in London by John Peake, Ian Livingstone, and Steve Jackson. It was listed in the London Stock Exchange in 1994. The company has since moved its headquarters to Nottingham. Games Workshop is mainly involved in producing and retailing games and toys (miniatures). The company started off with producing board games made of wood (eg. Backgammon), moved on to importing role-playing games (RPGs) from the United States and finally to where it is today, a toy and games producer, publisher and retailer. Games Workshop is well-known in the market for its collectible miniatures (toy soldiers) used in its role-playing and table-top wargames (WIKIPEDIA). Its specialty and focus is on collectible toy models targeting toy collectors and hobbyist whose favourite pastime is collecting toy models. Games Workshop has several subsidiaries, they include: BL Publishing Publishes literature and gaming materials Citadel Miniatures Produces toy miniatures collections for collectors and hobbyist Forge World Produces higher quality models for their role-playing and table-top wargames Sabertooth Games Produces card games related to their role-playing and table-top wargames produced (Wiki: Games Workshop http://warhammeronline.wikia.com/wiki/Games_Workshop#Subsidiaries) Competitors Hasbro U.K. Limited Vivid Toy Group Limited Vivid Imaginations Limited Games Workshop Limited Hornby PLC Flair Leisure Products PLC Hornby Hobbies Limited Datel Electronics Limited Rockstar North Limited Hardy Greys Limited From FAME (https://fame.bvdep.com/version-2010823/cgi/template.dll?checkathens=1kick=1 product=1user=lingd%40coventry.ac.ukpw=D341XryjGFEL77TgmOwhnA%3d%3d) Customers Collectors Hobbyist of their miniature games collection Teenagers Young Adults Global customers Market Contribution Share In 2009, Games Workshop wanted to cut cost and initiated a move to use plastic instead of metal for the production of their toy and games miniatures. It was an apparently well-accepted change by their customers as sales rose from  £110.3m to  £113.9m in 2009. http://www.ft.com/cms/s/0/719b6d28-7bbb-11de-9772-00144feabdc0.html In 2009, Games Workshop opened 10 new stores in the UK which are run by a single staff, making it easier for them to expand to smaller towns and hence more accessible to their teenage fans. These additional stores will boost Games Workshops market presence. As at January 2010, Games Workshop has expanded operations overseas to Europe, North America, Japan and Australia. However, market analysts believe that the company has potential to expand to other untapped markets. In January 2010, when Games Workshop revealed that its profit before tax achieved would surpass expectations by at least 50 percent, shares increased by 30 per cent to 333.85p. Profit before tax was initially estimated to be around  £9m as at 30 May 2010 but in January 2010, it was expected to grow by another  £5m or more by May 2010. Games Workshops gross margins have increased as a result of their cost cutting measures undertaken in 2009. http://www.ft.com/cms/s/0/afb932a0-fade-11de-94d8-00144feab49a,s01=1.html Future Forecast Games Workshop PLC should try to be more creative and innovative, launching new products constantly over the year, in order to increase sales and spread sales more evenly over the year than garnering the majority of sales only during the Christmas season. As mentioned earlier, market analyst believe that Games Workshop has the potential and capability required to further expand overseas, probably to untapped markets, such as Asia (with the exception of Japan where they already have expanded to). Furthermore, the market for toys and games are continuously increasing and expected to carry on growing in the future (internal market environment-is childhood getting shorter?). Sales recorded for toys and games have also been rising over the years and expected to continue doing so. (Market Re-forecasts-Household-UK-March 2009-Toys and Games). In the case of Games Workshop, although there was a slight drop in sales for the company in 2007, it has since been steadily increasing over the last couple of years. This could be due to the fact that Games Workshop builds up customer loyalty by offering collectibles that interested customers can only buy from the company if they want the complete collection. The excellent after-sales service provided by the company could be another factor that enabled them to earn loyalty from their customers. This is an invaluable asset to the Games Workshop as no matter what new products they offer, most of their loyal customers will support them by purcha sing their products. As long as the company continues to successfully retain its customer loyalty, it will go a long way. It is crucial for Games Workshop to constantly update themselves on the current trends and threats faced by the toys and games industry, and act accordingly by coming up with suitable strategies to ensure that the business stays profitable and hopefully gain a larger market share. Conclusion and Recommendations:

Sunday, January 19, 2020

India: Land of Diversity Essay

The western culture has always been known for its progressive nature. It has given its followers a lot of freedom and openness. But there are times when the freedom gets on to you. This is when one starts feeling the void and the emptiness and starts craving for some sort of support or someone to look upto as a guiding force. Since many decades, the westerners have been looking towards India to save their fizzing hearts and morality by its spiritualism. This is because India is the land of sages and great thinks and reformers who have reached far and wide spreading the true message of god. Their sayings and preaches have been guiding all of us since ages to listen to the voice inside us and lead a meaningful life. The growing impetus of spiritualism in the world was born in India and it has been the flag bearer of all this since ages. India is a land where many different religions and practices live together in complete conglomerate, side by side. India has always been open to visitors. There has been an old famous saying in India which says: â€Å"Atithi Devo Bhava† which literally translates to say that guest is god. The Indians have lived by this thought since the very beginning and still practice it. This is the reason why when any foreigner came to India (with whatever motives in mind, India was there with arms wide open to welcome them. It started with the Aryans, then came the Persians, Mughals, British French and many more. All were welcomed in India with equal gratitude. The humbleness and hospitality has also been prevalent till now. It welcomed the Dalai Lama when he escaped from Tibet after the Chinese agression.This is another example of the nobility that India has been Famous for. India and its have also been famous for helping out others. It helped Bangladesh to win freedom and independence from the erstwhile Pakistan. The practices of helpfulness and aid have been carried out like a tradition since ages, transferred from one generation to another. India has become the land where cultures and thoughts intermingle to provide an altogether new way of living to the people. Since being a home to people from different cultures, the residents have learned how to respect all the various cultures and traditions. Come to India-the only country in the world  where you shall find a Hindu temple, a church and a mosque adjoining each other and followers of any of them visiting each. This is the best part of the underlying Indian thought – tolerance and respect for everyone. So whatever be your culture, beliefs, religious practice, India can surely make you feel at home. India is truly a land of great cultural heritage and enriched traditions. The influence of various cultures on each other is evident from the architecture styles, language as well as the practices in various parts of the country. This innate mixture of features of various cultures and traditions gives India the place and the reputation of being the most tolerant and patient country in the world.

Friday, January 10, 2020

Benefits of Going Holidays

What is the psychological benefit of going on holiday? For most of us life involves the constant routine of work, whether at home with the family or within a business. Household duties, shopping, cooking, and looking after our families, watching television and whatever other hobbies or activities we engage in keep our minds active and occupied day in day out. If we interpret our situation to be stressful, forced, without choice or robotic then the constant engagement in life can wear us down and leave us feeling less than enthusiastic.If we feel unhappy about our situation and yet do not see a way to change it to what we would rather have, life can become a chore rather than exhilarating and exciting. It’s not always easy to change a job we do not enjoy or feel suitably challenging. It’s not always appropriate, financially or emotionally realistic to leave difficult relationships or stressful family situations, therefore we endure our current lifestyles, regardless.Read more in Holidays  « Four Leaf Clover Brings Luck? Guest Country and Republic Day  » How can we get away from an unchanging routine? In the same way you would take a break from over-involvement in a demanding task to clear your mind and gain new perspective before returning to recreate new ideas, you can take a holiday in order to refresh your mind from the prolonged identity with sameness, stress, fatigue or monotony.Obviously our lives do not have to be troubled or stressful to appreciate a holiday but no matter what we engage in daily, there is routine of some sort, therefore a change of scenery and new exciting stimulation for our minds is advisable in order to remind ourselves there is more to life than the ongoing routine of our current situations. Some people experience a sense of freedom the moment they lock the front door to their house, and their holiday has begun. Everyday life is left behind. For others it’s being on the aeroplane, physically identifying with having left their country or even just their county behind.For others it’s a few days into their holiday when they can identify and appreciate several days off together, which they normally do not experience in working life. Whatever it is for you, when it hits home you are free to do exactly as you wish; eat when you like, relax and read a book or go for a walk, engage in water sports, soak up the scenery, admire the architecture, rekindle romance, have fun with the children – you can completely relax and give your entire mind and body a well deserved holiday.Engaging in the freedom of not having to worry about time or deadlines or even family demands is extremely beneficial to our well-being. Life without tasks can be boring and uneventful but in order to appreciate what we have and identify with our own self worth and admiration of all that we do in life – it is advisable to take time out and experience the opposite as we enjoy complete relaxation without any demands.Choose a holiday in line with your idea of relaxation, which for an individual could be anything from a camping holiday to relaxing on a cruise ship or sightseeing in Barcelona. There is no point going on holiday to do more of what you do not want to do. Our minds need a break from ongoing concentration just as much as our bodies do if they are working continuously on an arduous task. Have a change of scenery and enjoy the contrast between complete choice in the moment and the scheduled routine of home and work life.

Thursday, January 2, 2020

Analysis Of `` Forgiving My Father And `` A Rose For Emily ``

Lucille Clifton’s and William Faulkner’s characters in â€Å"Forgiving my Father† and â€Å"A Rose for Emily† demonstrate sections of the authors personal lives and their past experiences, and the works give insight into the styles along with the flow that the authors use when they write pieces like these. The authors characters in the stories are also similarly written, being that some of the problems that they face in the stories. The way that Clifton and Faulkner write pieces like these can often leave them open to interpretation to the people that read them. Clifton and Faulkner are also known for writing from personal standpoints whenever they write a poem or other form of literature, this helps them connect with readers on personal levels which are why they are well known. Even though the authors have similarities they also have differences in some of the topics that they write about, these two works are key to showing that they can be similar at the time. When Faulkner writes a story he usually uses his past environments as the setting, but changes the names of the places and people in which these events occur. Faulkner is also known for using people in his family as characters for some stories, but changing their names. In the F section of Twentieth Century American literature, there is a brief summary of Faulkner’s life that informs him about parts of his childhood and leads into his adulthood, but also tells us that in his later years his stories can be related back toShow MoreRelatedMarketing Mistakes and Successes175322 Words   |  702 Pagesthis 11th edition. Who would have thought that interest in mistakes would be so enduring? Many of you are past users, a few even for decades. I hope you will find this new edition a worthy successor to earlier editions. I think this may even be my best book. The new Google and Starbucks cases should arouse keen student interest, and may even inspire another generation of entrepreneurs. A fair number of the older cases have faced significant changes in the last few years, for better or for