However, ratios are relative measures and so need some benchmarked (Drake, n. Therefore, one way of dealing with relativity and identifying the company’s strengths and vulnerabilities, is to assess the performance of a company in comparison with the competitors in industry (Evans and Lindsay, 2012). With this background, the report is designed to evaluate the financial performance of Barratt Development Plc (BDEV) with its competitor Bellway Plc (BWY). The report includes the backgrounds of the two companies, the background of the industry and the analysis of the financial ratios for 2014 and 2015.
The purpose of the report is to evaluate the reasons of the differences in the performances of the two companies and identifying future prospects. The Barratt Development Plc began in 1953 and currently operates in the two segments of the house building and the commercial developments in the Britain. The growth of the company is the result of its rapid expansion strategy where the company acquired other players in the industry and launched its own new companies. Today the company has different brands under which different housing and other commercial building projects including Barratt London, Barratt Homes, David Wilson Homes, Ward Homes, Wilson Bowden Developments.
The commercial development is conducted under Wilson Bowden Developments (Barrat London, n. The commercial sector development only accounts for the 1.52% of the total revenue while remaining is contributed by the residential homes (Barratt Developments, 2015a). The selection of the company for the analysis is done based on various factors. In a report related to the construction in the United Kingdom four leading players in the industry included Barratt Developments PLC. The performance of the leading players with respect to the employees, net income, and most importantly revenue basis is presented below: The above analysis provides rationale for the selection of the company.
First, noting the fact that leading player of the industry is running into losses, the BDEV has managed to generate the net income much closer to the second leading player industry. This rise in income is despite of the fact that the resource base of the BDEV in terms of the employees is much lower as compared to the second leading competitor.
Further, the company has acquired the status of third leading player with considerably higher revenue per employees in the market. Last, but not the
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