Financial Report of Ascential PLC (ASCL) Company

Financial Report of Ascential PLC (ASCL) Company

Introduction

Ascential PLC (ASCL), formerly referred to as the EMAP, is a British business to a business media company that deals with the exhibition as well as festivals and information services.  The company is also ranked in the London stock exchange and is also a member of the FTSE 250 firms.  The company has been experiencing financial improvements for the past few years. This has been due to its effective financial management and control.   This report seeks to provide a financial report of the company’s financial management and control for the year 2019.

There are several areas this report will focus on addressing financial management and control of Ascential ASCL.  These areas in the report include an analysis of the company’s revenue structure and cost structure. The report will also carry out a ratio analysis. In detail, their report will also provide some of the themes emerging from this ratio analysis.  The second objective of the paper will be a discussion of a performance measurement system that allows Ascential ASCL to achieve its strategic goals.  Lastly, the report will provide a recommendation on the company’s assessment of the nature and extent of the principal risks facing the company while it is in the process of achieving its strategic objectives.

Analysis of Ascential PLC (ASCL) Company

Ascential PLC is a company that specializes in global and information systems that assist the world’s most ambitious businesses in the globalized world.  The company uses its experiences to provide information, insights, connections, data as well as digital tools to offer a solution to the customers across the world.  There are several products and services the company deals with. The products are categorized into different segments. Product design products include WGSN trend for casting, WGSN lifestyle and interiors and WGSN mindset. Marketing segments involves products such as canes lions, the work (a digital platform on an award-winning creative work), WARC (a digital platform for effectiveness marketing) and media link (digital transformation as well as advisory services for media). The sales lines of products include money 20/20, edge dealing with price and promotion, retail insights, market share and Flywheel digital that deals with managed retail services.   An analysis of the company shows that the company has been performing well for the past few years.

One of the ways through which financial analysis of a company is done is through the revenue analysis of a company. In this case, we need to focus on the net sales of Ascential PLC company since the company mostly uses net sales as the point of reference.  In the year 2017, the company recorded a net sale of £400 million; in 2018, they gained 349 million dollars.  In 2019, the company earned $416 in total sales.  This is quite a significant improvement in the company’s revenue.  Analysis of the company’s financial information further shows diverse information on the company’s performance. For instance, in 2019, the company recorded an operating income of $129 million. This reflects the amount of money earned as profit from the company’s operations after covering the operating expenses of the company operations.  The commendable issue is the fa that the operating income of the company increased to$129 million in 2019 from $102 million in 2018 (Frick, Gergaud and Winter, 2017, pg. 259).

The capital expenditure of the company in 2019 was $18.7 million. Hence the company used a little amount of money for capital expenditure purposes.  The book value per share for 2018 was $137. For the financial year 2019, the book value has not yet been calculated.  Besides, the net income of the company in 2019 was $ 7.90 million. Earnings before interests, tax, depreciation, and amortization (EBITDA) for the year 2019 were $129 million (Ascential PLC company, 2019, n.d.).  This measures the company operating performance.

Ascential PLC Company Ratio Analysis

Ratio analysis is another aspect of any firm’s financial performance. The Ascential PLC company ratio analysis. Just like any other company, Ascential PLC company has several ratio analyses. One of them is the current ratio. The current ratio of Ascential PLC company is 0.98 for the past financial year.   This figure is quite challenging. A current company ratio should be within 1.5 to 3% (Frick, Gergaud, and Winter, 2017, pg. 259).  This shows that Ascential is still struggling when it comes to meeting its financial obligations.  The quick ratio of the company is also 0.96.  This shows that Ascential PLC (ASCL) is in a position to meet its short term financial obligations.  The cash ratio, on the other hand, is 0.43.  This implies that the company’s s liquidity ratio is at a good stake (Easton and Sommers, 2018, pg. n.d.).

The price to earnings ratio is $198.88.  This shows that the company’s current share price relative to its per-share earnings is at a good level.  The price to sales ratio of the company was 3.84 in 2019.  This is a very low level indicating that the company is more attractive to investors.  The operating margin of the Ascential PLC is 14.75.  This operating margin of Ascential PLC suggests that the company indicates that each dollar earned brings revenue of 14 cents in profit (Naqvi, S.A., Sensoriant Inc., 2017, 2019, n.d.).

Ascential PLC Annual Report Financial Ratios

The following is another table showing the comparison of the financial statement of the company for the past three years and also a projection of the year 2021.

Assessment of Performance Measurement System of Ascential PLC

The financial report of a company involves both financial and non-financial aspects. A performance measurement system supports the decision making process through the collection and analysis of data on the performance of the organization. Ascential PLC company also does a performance measurement system on its performance.  The performance measurement system of Ascential PLC company is also based on the financial and non-financial metrics.

Performance metrics

The financial performance measurements are based on analyzing company financial ratios. Some of the common and main financial ratios to consider they include the operating income, the operating margin, the quick ratio, the current ratio, and the price to sales ratio (Harbour, 2017, pg. 22).  For instance, the current ratio of the company 0.98 shows that the company is still struggling in one way or another to meet its financial obligations.  The quick ratio also is 0.96. This also shows that the company is at a good stake of meeting its short term financial obligations (Easton and Sommers, 2018, n.d.).  The company is, however, more attractive to the investment, due to its price to sale ratio of 3.84.  The operating margin of a company also shows the excellent performance of the company.  The company hence earns a considerable income from each dollar as a revenue.

Measuring the profitability of the company is another financial metrics; the company displays its performance. Operating margin is another financial metric. The company has an operating margin of 14.75%.  This is the amount of earnings before interest and taxes. The net profit margin of Ascential PLC company is 1.90.  This is the amount of profit after all the costs and expenses have been catered for.  However, a 1.90 net profit margin of 1.90 is less, and hence the company needs to do more to increase the margin up to 10%. Moreover, the sales segment of the company improved by 30%, while the product design segment improved by 7% (Ascential PLC Company, 2019, pg. 2).

Moreover, the Ascential PLC company has a strong balance sheet that depicts a good performance of the company. This one is also a significant tool for the performance measurement system. Ascential PLC (ASCL) is using a rigorous capital allocation framework in its financial management and general operations.  A strong balance sheet, as well as focused capital allocation, as evidenced in the recycling of its capital from the disposal of their exhibitions activities done in the year 2018 (Ivanov, Dolgui and Sokolov, 2019, pg. 829).  Through this disposal, the company was able to focus on its strategic priority that allows customers to win in the digital economy. Besides, this strategy has increased the company’s capacity in major marketing segments such as product design, marketing, as well as sales.

Non-performance Metrics

Performance measurement of Ascential PLC company can also be viewed in terms of non-financial metrics. Various non-financial metrics are used to perform a performance measurement system. For instance, Ascential PLC is one of the companies that use the Global Reporting Initiatives (GRI). The GRI Is a framework of internationally accepted guidelines as well as principles that are used by many companies, including Coca Cola and Ascential PLC company (Glavan, 2012, n.d.).   The framework is based on organizing a report on corporate responsibility and sustainability performance (Delhougne, 2018, n.d.).

The company can as well use Balanced Scorecard to identify and improve various internal functions of the business and their resulting external outcomes. This performance management metric helps the organization to measure and provide feedback to the organizational management. To the company, data collection is a crucial aspect for the provision of quantitative results as the accounting department gather and interpret the information, and the management uses it in an organization’s decision making. This strategy reinforces good behavior and isolates areas that need to be analyzed, such as business processes, finance, customers, and growth. Through these analyses, Ascential PLC Company can easily identify factors that hinder business performance and strategic outline changes which are trucked by company’s future scorecards (Delhougne, 2018, n.d.).

Some of the other performance metrics the company can use are the Key Performance Indicators (KPI) and the Balanced scorecard, ISO standards as well as industry dashboards.  There are a number of qualifications that the Ascential company needs to fulfil when it wants to use, for instance, the KPI strategy. First, they need to be closely linked to the top-level goals of the company, the company’s KPIs need to be quantifiable, and they should also be related to aspects of Ascential business environment (Maydanova, Ilin, and Jahn, C., 2019, n.d.). The second performance measurement metrics, the company should use is the balanced scorecard.  A balanced scorecard is a strategic management performance metric that will enable Ascential PLC company to identify and improve its several internal activities and impact external outcomes (Nørreklit, Kure. and Trenca, 2018, pg. 3).

Risk management of Ascential PLC Company

Ascential PLC company is exposed to many risks.  The technology world is full of competition from other firms. Many companies in the digital world are hence facing competition across all sides of the industry.  The risk facing Ascential PLC company is a challenge to the company Pursuit of its strategic goals.  One of the risks the company is facing is risks from new entrants into the market (Giannakis, Papadopoulos, 2016, pg. 457). For a long time, the company has been unable to deal with challenges presented by new entrants into the industry. As a result, the company has lots of small niche in its market. This poses a risk to its marketing area.  The expansion of the company has also been a challenge due to its current organizational structure that is not compatible (Bikkula et al.  2018, n.d.). The lack of investing in technology poses a risk of the company failing to ensure expansion; hence this poses a challenge of facing stiff competition day in day out in the industry (Naqvi, Sensoriant Inc., 2017, pg. 763).  A clear analysis of the company’s monitoring and review of the effectiveness of its risks ha clearly shown the company weakness in these areas.

Conclusion

The digital world is full of competition.  This is because technology is changing every day. However, Accentual PLC company has been able to sustain this pressure in the industry.  Based on an overview of other companies in the industry, it is still one of the leading firms in its industry.  This is because of the numerous strengths that have enabled it to survive in the market. The strengths of the company are drawn from company financial reports and, most importantly, its performance measurement system. Although the company has a few challenges in the market, it has managed to establish itself and achieve many things. From the overview of this report, the company indeed has a strong brand portfolio, a successful track record depicted in its mergers and acquisitions, and, most importantly, a strong return on capital expenditure. However, the company needs to address some of its weaknesses. These weaknesses are posing a threat to the company’s financial and non-financial aspects.

References

Ascential PLC Company, Audited results for the year ended 31 December 2018 Fr Ascential PLC company. (2019).

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Frick, B., Gergaud, O., and Winter, P., 2017. The Revenue Potential of Product Differentiation: Empirical Evidence from the Croatian Restaurant Industry. Journal of Gastronomy and Tourism, 2(4), pp.259-271.

Giannakis, M. and Papadopoulos, T., 2016. Supply chain sustainability: A risk management approach. International Journal of Production Economics, 171, pp.455-470.

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Ivanov, D., Dolgui, A. and Sokolov, B., 2019. The impact of digital technology and Industry 4.0 on the ripple effect and supply chain risk analytics. International Journal of Production Research, 57(3), pp.829-846.

Maydanova, S., Ilin, I. and Jahn, C., 2019, September. Balanced Scorecard for the Digital Transformation of Global Container Shipping Lines. In International Conference on Digital Technologies in Logistics and Infrastructure (ICDTLI 2019). Atlantis Press.

Naqvi, S.A., Sensoriant Inc., 2017. System and method for control and management of resources for consumers of information. U.S. Patent 9,763,023.

Nørreklit, H., Kure, N. and Trenca, M., 2018. Balanced Scorecard. The International Encyclopedia of Strategic Communication, pp.1-6.