Analysis of financial statements of Alko company (years 2011-2012)

1. Presentation of report analysis
by Alexandra Ilina
(student No 1101111)
ALKO INC.
ANALYSIS OF FINANCIAL STATEMENT

2. What is Alko company?
• Finnish national monopolistic
alcoholic beverage retailer
• Founded in 1932
• Owed by Finnish
State, governed by Ministry of
Social Affairs& Health
• Product range: 4000 different
alcoholic beverages both light &
strong ( > 4.7% Vol.)
• Operating in 350 retail shops
around Finland

3. General overview
Increased
in 2012
Decreased
in 2012
Net sales
Operating
profit
Return on
equity
Income from
ordinary
operations
Non-current
assets
Net sales w/o
alcohol tax
Variable
costs
Fixed costs
Personnel
expenses
Reasons:
• Fall of alcohol consumption
• Change of prices & smaller
sales volume
• Rent costs increased (>
opening of 3 shops, closed 1
shop)
• Increased alcohol beverage
tax by 13.1%
• Salary increases
• Smaller interest earnings and
cash reserves
• Higher total purchase prices
of beverages
•Weaker financial performance

4. 2nd Stage Analysis
• Slightly improved sales revenue
• Lower gross margin due to
increased variable costs
SR
VC
GM
FC
P/L
• Not enough cut in fixed costs ->
dropped down profit
SR
VC
GM
FC
P/L

5. Profitability
• Decreasing trend in all profitability ratios
• Lower net profit due to increased variable
costs
•EBIT index – poor level
•ROI, ROCE – remaining good positions

6. Efficiency
• Improved stock turnover
-> selling and replacing of
inventory became faster
• Decline in stock days -> less
time for Alko to turn its
inventories into sales
• Only 9 debtors days on
average -> good trend as the
company gets paid faster for
what it sold
• Still big number of creditors
days -> better as Alko can
pay its debts during a longer
time

7. Liquidity
• Fair levels of both Current and
Quick ratios -> lower assets
amount
• Weakened working capital rates
due to declines in account
payables & account receivables
Reasonable:
• Improve total assets
• Cut current liabilities

8. Capital Structure
• Fair level of Dept-Equity & Equity
ratios
• Stability in good level of Relative
indebtedness
• Slight declining in all indexes >
ability to pay liabilities, position
remains to be risky
Reasonable:
increase amount of
total assets and
owner’s equity

9. Thank you
for attention!