Assess the financial performance of William Hill over the last 4 years Essay

Assess the financial performance of William Hill over the last 4 years and discuss how management accounting can assist a service providing business like William Hill - Essay Example o assess the financial performance of William Hills is its profitability assessment over the last four years and the satisfaction of investors in terms of returns on their investments. The tool of ratio analysis is used for assessing such financial performances of William Hills. In order to assess the profitability the ratios that are considered for the four year performance are operating margin, net margin, return on total assets (ROA), and return on common equity (ROE). Let us start with operating profits. â€Å"Operating profit margin measures the percentage of each sales dollar remaining after all costs and expenses other than interest, taxes, and preferred stock dividend are deducted. It represents the pure profits earned on each sales dollar. Operating profits are pure because they measure the profits earned on operations and ignore interest, taxes, and preferred stock dividends.†(Lawrence J Gitman, page 67)i The assessment of operating margin ratios of William Hills suggests that profitability performance is sliding down since 2006. The operating profit margin was 32.68% in 2006, 30.7% in 2007, 28.91% in 2008, and then down to 25.31% in 2009. One of the reasons for this sliding performance is poor response to newly introduced online gambling business. In fact â€Å"the online business of William Hills has tarnished the group’s reputation for management excellence by mismanaging the online sports book technology project.†(B etting Market, Viewed on 19th May 2009)ii The analysis of profitability on basis of net profit margin is also very interesting because â€Å"the net profit margin is indicative of management’s ability to operate the business with sufficient success not only to recover from revenues of the period, the cost of merchandise or services, the expense of operating the business (including depreciation) and the cost of borrowed funds, but also to leave a margin of reasonable compensation to the owners for providing their capital at risk. The ratio

Review of Movie 'Inside Job' Example | Topics and Well Written Essays - 750 words

Of 'Inside Job' - Movie Review Example Loan companies and banks became more free to gamble with the money of the depositors, borrow much more money and to offer the investors highly complex financial structures. They offered financial instruments which had streams of income from different bundled up debts this included the high interest home loans that the high risk borrowers were offered. Theses sub-prime markets offered abnormally high returns. A legal analysis of the film documents the fraud perpetrated by investment banks and their role in causing the 2008 global financial meltdown (Ferguson). Fraud refers to a false representation of a factual matter whether by conduct or words, by misleading or false allegations or by hiding of what should have been revealed. Fraud is prevalent in the buying or selling of intangible property such as stocks, copyrights, and bonds. Fraud is proved though five stages; a falsified statement of a material fact. Secondly, the knowledge on the defendants part that the statement is untrue. Third, intent on the defendant’s part to deceive the victim. Fourth, the victim’s justifiable reliance on the falsified statement and the final stage is injury to the victim. The film ‘inside job’ reveals instances of Fraud as discussed in the paragraph below. The film ‘inside job’ reveals that Goldman Sachs, an investment company, was guilty of fraud. The company recommended their customers to go for the Timberwolf mortgages claiming that they were backed with securities. They highly recommended the customers to take the deal yet they aware of the loopholes. They secretly discussed that Timberwolf was a lame deal but this was after they sold the securities to them. When selling the securities they lied about the expected performances and the securities and failed to disclose and provide accurate and timely information about the real value of the said securities. The company was betting against