Financial+Analysis

=Financial Analysis=

Gross Profit/Turnover (Gross Profit Margin)
 Gross Profit Margin tells about the profits a business makes on its cost of sales or cost of goods sold .Figure 17 shows Glasgow registers the highest with 32.99% while Coventry is the lowest with 4%. This indicates that Coventry either under priced their customers or has tremendous overheads, which seriously is an issue.

Gross Profit/Vehicles
Gross Profit/Vehicles shows how much a vehicle is contributing to each region’s profits. Figure 17 shows that Glasgow is the highest with each vehicle contributing over £26 thousand while Coventry is the lowest with less than £3 thousand. Such extreme difference is amazing because both regions have roughly similar amounts of vehicles, staffs and parcels. The conclusion drawn could be because Coventry staffs failed to manage their vehicles due to the vehicle fleet record while at the same time Glasgow has its own integrated system to ease vehicle management.

Gross Profit/Staff
Gross Profit/Staff shows how much a staff is contributing to each region’s profits. Figure 17 shows Glasgow is the highest with contributions well over £12 thousand while Coventry is the lowest with around £1 thousand. Such extreme differences should not be occurring because both regions have roughly similar staffs and parcels. This only explanation could be due to Glasgow’s integrated system, which helps staffs to manage large amount of parcels effectively and efficiently. However, Newton with no integrated systems like Glasgow and has comparable staffs and parcels managed to keep on par. This could be due to good people management or staffs are motivated because of certain perks which Hermes can look into comprehensively and maybe apply to all regions.

Gross Profit/Parcels
<span style="font-family: 'Times New Roman',Times,serif; font-size: 10pt;"> Gross Profit/Parcels shows how much a parcel is contributing to each region’s profits. Figure 17 shows <span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Glasgow is the highest with each parcel generating around £7 while <span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Coventry is the lowest with each parcel generating less than £1. This maybe because <span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Glasgow has an integrated system that helps managing of parcels better while <span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Coventry does not and at the mean time <span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Coventry’s staff maybe frustrated in tracking their vehicles due to the lack of <span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">usability of the vehicle fleet record system.

Turnover/Parcels
<span style="font-family: 'Times New Roman',Times,serif; font-size: 10pt;">Turnover/Parcels here mean how much each parcel is contributing to the total revenue. Figure 17 shows a quite evenly overall pricing (£19 to £21) with <span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Newton the highest while <span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Coventry the lowest. This could mean that <span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Newton’s parcels are heavier, further in distance etc.

Turnover/Vehicle
<span style="font-family: 'Times New Roman',Times,serif; font-size: 10pt;"> Turnover/Vehicle means how much each vehicle is contributing to overall revenue. Figure 17 shows that <span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Glasgow is the highest with £81 thousand while <span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Wakefield is the lowest with about £56 thousand. The possible reason could be that <span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Wakefield has way fewer vehicles and parcels compared to Glasgow. However, their turnover/parcels ration is slightly higher to Glasgow, which suggests their overall business being good.

Turnover/Staff
<span style="font-family: 'Times New Roman',Times,serif; font-size: 10pt;"> Turnover/Staff means how much each staff is contributing to overall revenue. Figure 17 shows that <span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Newton is the highest with about £38 thousand each while <span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Wakefield is the lowest with roughly £24 thousand each. This could indicate that <span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Wakefield has lack of communication between departments because Bridgend with same number of staffs managed to generate more turnovers and has a way higher turnover/staff ratio.

Five Years Business Summary
<span style="font-size: 10pt; font-family: 'Times New Roman',Times,serif;">Figure 18 shows a steep declined in overall percentage (Net Profit/Turnover) to 0.64% in year 2000 from 3.00% in year 1999. This indicates that an <span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">enormous overhead is present. With speculated assumptions, one reason could be lack of <span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">people management since Hermes has increased their staffs from 681 to 757 yet the turnover rates shows little variation between year 1999 and 2000. <span style="font-size: 10pt; font-family: 'Times New Roman',Times,serif;">Another reason could be due to <span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">high sales staff expenses because Hermes is constantly seeking to expand customer base, their sales forces would naturally also travel more frequently which lead to higher overheads. <span style="font-size: 10pt; font-family: 'Times New Roman',Times,serif;">Lastly, the increased in sudden overheads maybe cause by the maintenance of the finance system since it has been upgraded to state-of-the-art recently. It is assumed that the upgrade was done near the end of year 1999 or the beginning of year 2000.