Finance for E-Business (Report) Essay Example | Topics and Well Written Essays - 2750 words

Finance for E-Business (Report) - Essay ExampleBT Group plc is listed on stock exchanges in capital of the United Kingdom and New York. (btplc.com). The group has four (4) principal lines of business BT Global Services Openreach, BT Retail and BT Wholesale. The principal activities of the group acknowledge networked IT services, local, national and international telecommunications services, and higher note value broadband and internet products and services (btplc.com).)The ratios below and an explanation as to their use will indicate to you why this particular companys share whitethorn or may not be recommended. besides, as you will find out, there are limitations to these ratios.Profitability ratios are usually calculated in value to perform vertical analysis or to compare one year with another. These ratios include net profit margin and gross profit margin. Figures are in like manner taken from the balance sheet and used for the calculation of specific ratios to determine how well the fixed assets were utilised. These ratios are known as asset management ratios. These include asset turnover ratios and return on capital employed. Shareholder or investment ratios such as return on equity, earnings per share and damage earnings ratio are some of the other ratios that are useful here. A number of these ratios will be used to assess the financial mathematical process of BT group over the past three (3) years.It is impossible to assess profits or profit growth properly without relating them to the add of funds (capital) that were employed in making the profits. The most important profitability ratio is therefore return on capital employed (ROCE), which states the profit as a percentage of the amount of capital employed (BPP 2009)The figures above show the return on capital employed for the past three (3) years.. ROCE fell sharply from 11.86% in 2008 to 1.5% in 2009. However it increased in 2010 to 11.63%. These