Financial Ratio Analysis for BAE Systems Plc Case Study

Financial Ratio Analysis for BAE Systems Plc - Case Study Example After the September 11 tragedy which shocked the global business environment becomes a grim reminder for nations to improve their defense systems. BAE Systems Plc (BAE) traces its origin to the 7.7 billion merger of Marconi Electronic Systems which is the defense electronics and naval shipbuilding subsidiary of the General Electric Company Plc and British Aerospace which specializes in the manufacture of aircraft, ammunition, and naval systems. Out of these prestigious business organizations, its establishment in 1999 equipped with a unique competitive advantage which enables it to position itself as the third largest global defence company and sixth largest US defense company employing 97, 500 highly skilled people. Financial ratio analysis is a very essential tool in assessing the financial health of a business entity. It enables a financial analyst to spot trends in a business and to compare it with the performance of similar business enterprises within the same industry. This tool is currently utilized by business managers, investors, creditors, suppliers, and other decision makers in order to determine the financial performance and well being of a business organisation. ... These are profitability ratios, financial leverage ratios, liquidity/solvency ratios, and efficiency ratios. In order to get a deeper insight of BAE's financial performance, its computed financial ratios will be benchmarked with its competitor's Cobham Plc. The rationale of choosing these two business organizations is simple. It should be noted that both of them are regarded as important players in the global pharmaceutical industry. Being in the same line of business and the same industry, it is right to assume that BAE and Cobham Plc both face the same challenges and opportunities in the sector under consideration. This assumption justifies the comparability of their financial performance during the fiscal years. 2.1. Profitability Ratios Profitability ratios measure the ability of the company to generate income from its investments less the costs incurred (Fraser & Ormiston 2004). The ratios computed for this category are return on capital employed, sales profit margin, and return on equity. Return on capital employed is a variant of return on investment which measures how well the company is utilizing its capital. The computed sales profit margin, which is the ratio of operating income to sales measures as a percentage of sales, show the excess revenue from sales over cost of normal operation excluding financing. On the other hand, return on equity measures how much wealth is created for the company's stockholders for every shares that they have on hand (Fraser and Ormiston 2006). Logically, higher performance ratios indicate a healthier financial condition. Table 1. Profitability Ratios Comparison Table 1 shows the comparative profitability

Leadership Issues in Ethical Perspective Assignment

Leadership Issues in Ethical Perspective - Assignment Example Different cultures around the world instill various adaptations of those values to the youth as they mature. Some societies place a higher emphasis on certain values than other cultures do (Barnes, 2007). The process of learning wrong from right remains the same through the application of rewards and consequences being associated to the choice. Advancements in travel have allowed people from different cultures around the world to converge and share ideas and values. Many businesses have entered the global market and experienced a plethora of value variations that international competition brings to the organizations. The contrast of prioritized values differs with each culture’s traditions. Exposure to another culture’s values may influence an individual’s beliefs and values and create the need for change or evolution of current opinions and ideals (Barnes, 2007). Learning in Action The idea of learning in action allow for the opportunity to take a look at person al values and decide how those values might fit into different scenarios. The first thing was to find out how personal values were perceived and the quality of each value. This was accomplished by taking a Pre-Self-Evaluation survey to determine strengths and weaknesses. A Post-Self-Evaluation allowed for comparisons between the perception at the beginning of the project and then again at the end. It was noted that some of the value areas had changed. Interviews were the next step in learning about ethical values and social responsibility. The themes that emerged once the analysis was complete allowed for different variations of attitudes and opinions to surface. A priority list of personal values was created with the pre and post evaluations. This list allowed for the comparison between the beginning of the project and the end results. The collection of articles dealing with ethical behavior in business allowed for even more analysis and comparisons to be accomplished. Pre and Post Self-Evaluation Survey When the learning in action assignment was given, the recorded answers for a Pre-Self-Evaluation Survey were carefully considered. Recording the answers for the magnitude of understanding and application of each ethical value would be important later on as the comparisons with a Post-Self-Evaluation could be implemented. The comparison of the two evaluations showed considerable differences as knowledge and practice was incorporated into the project. Some values remained the same and those were ones that could be continually worked on to show improvement in the future. Interviews When setting up the interviews, asking permission to record a person’s answers seem socially responsible. All participants agreed that as long as the answers remained anonymous, each person approved the inclusion of their answers in the final report. Three questions were asked, so during the analysis of the responses, all the answers for question one were combined and the same patter was maintained for questions two and three (see Appendix 5). Twenty individuals were asked to participate in the interview process. Five of them were close friends, five were classmates, five were professors, and five were co-workers. The themes, which emerged from question one were to watch others, follow one’