FINANCIAL REPORTING Assignment Example | Topics and Well Written Essays - 3500 words

FINANCIAL REPORTING - Assignment Example The paper presents the financial evaluation of the company and for this particular purpose, the most effective tool of ratio analysis has been utilized. The financial ratios are usually divided into various sub categories such as profitability, gearing and liquidity, each put emphasis on a different area of the financial outlook of the organization. These analyses form an integral part of the financial statement analysis, especially from the investor’s point of view, which are always looking for avenues to invest in countries having strengthened and stabilized financial ratios and representing an upward trend. In addition to the financial evaluation, for the purpose of risk assessment, several risks has been identified and assessed such as firm related risks, currency risks, capital structure risks and market risks. The Kerry Group PLC actively follows the corporate governance directives issued by the government for the corporation registered in the Ireland. Being a premium co mpany listed on the stock exchange, the company is required to follow the directives of the corporate governance requirements. ... Market and Industry Risk and competitor analysis The company operates in a highly competitive market where its competitors are continuously devising methods through which their profitability and market share can be increased. The company is exposed to a risk where its competitors can introduce a major change in their production process through introducing a state of the art technology. This can not only enhance the efficiency of their production, but it can significantly provide them with the cost leadership as well. In order to analyze market competitive forces, Porter gave a five forces model which analyzes the competitive forces acting in the market which a corporation has to manage in order for it to obtain competitive advantage. 3.2 Porter Five Forces Model Analysis Porter’s five forces model is an effective tool in exploring the competitive forces of the environment in which the organization operates. It allows the business to critically analyze its current business stra tegy and formulate one which can allow it to achieve a competitive position in the market. With the advancement in Information Technology, it has been prominently observed that the businesses are now focusing more and more on implementing information system in order to make the best use of their resources. In the mentioned case, KERRY GROUP PLC has several functional units carrying out activities related to the manufacturing and delivering of food merchandise. By integrating these units using information system, KERRY GROUP PLC can gain competitive advantage in the market which can by analyzed in the light of Porter’s five forces model. The first competitive force according to the model is the entry of new competitors