International Standards for Financial Reporting Case Study

International Standards for Financial Reporting - Case Study ExampleLooking first to Profit Ratios, the investment analyst would take interest in the return on invested capital that is a measure of kales earned on the capital that is invested in the company. The profit ratios would inform an investor about the reliability of the company in the use of its resources. The more reliable and efficient a company the more profitable it will be. ROIC is of comfort as a benchmark for Morrisons or other investors to compare the company to compete in the marketplace, as well as to compare subsidiary companies that Morrisons envelopes (Hill and Jones C3). all over time, profit ratios can show if a companys performance is improving or declining. There are many types of profit ratios, for Morrisons, the Return on Investment Capital ratio (ROIC) will be analyzed ROIC = Net profit/Invested capital = 93.4 million (over 25 weeks)/ 3, 662.4 million Thus, profits were down, before tax cosmos 61 .5 million. Although the overall financial result was disappointing for Morrisons in 2006, achievements were made so it was a period of dramatic changes. Benchmarking has had a strong focus at Morrisons over the past financial year, and a range of company labeled products has been adapted and extended to meet market demands. Also, the retraining of almost 90, 000 Safeway employees has led to climb on in the contributions of experience, skills, competencies, and knowledge that are of deemed value to the Morrisons team (Morrisons Annual Report 5). Annual Report 5). It appears from the Annual Report published by Morrisons, that ROIC weaknesses are being buffered by a