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  • Rolls-Royce SWOT and Financial Analysis

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    Chidam C
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    U Superior brand equity es Perception of being an expensive product in relation to its product offering. U Failing to deliver consistent aftermarket services Declining trend in R&D spend product release with quality issues (a380 engines) Exposure to multiple economies working capital fluctuations R&D to revenue Risk Gearing Click to edit Master subtitle style Liability 2011 2010 36. % 40.11% 35. % 17.55% 0. 55. -9. 0. 0. 3. Current ratio efficiency Debtors Age 131. 129. Credit

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    FANA_Group2-SWOT_Analysis[1]

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    U Superior brand equity es Perception of being an expensive product in relation to its product offering. U Failing to deliver consistent aftermarket services Declining trend in R&D spend product release with quality issues (a380 engines) Exposure to multiple economies working capital fluctuations R&D to revenue Risk Gearing Click to edit Master subtitle style Liability 2011 2010 36. % 40.11% 35. % 17.55% 0. 55. -9. 0. 0. 3. Current ratio efficiency Debtors Age 131. 129. Credit

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    11 views5 pages

    Rolls-Royce SWOT and Financial Analysis

    Uploaded by

    Chidam C
    U Superior brand equity es Perception of being an expensive product in relation to its product offering. U Failing to deliver consistent aftermarket services Declining trend in R&D spend product release with quality issues (a380 engines) Exposure to multiple economies working capital fluctuations R&D to revenue Risk Gearing Click to edit Master subtitle style Liability 2011 2010 36. % 40.11% 35. % 17.55% 0. 55. -9. 0. 0. 3. Current ratio efficiency Debtors Age 131. 129. Credit

    Copyright:

    Attribution Non-Commercial (BY-NC)
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    of 5

    Project Group 2

    Terence Bok 76496230 Raju N Click to edit Master subtitle style 7785940 Chidambaram C 7411631 Amal Pravin 7793839

    Effendy Ibrahim 7784557 5/25/12

    Strength

    SWOT Analysis Weakness

    Superior brand equity

    es Perception of being an expensive product in relation to its


    product offering

    Comprehensive aftermarket services Rolls-Royce places high importance to R&D (Innovation)


    Failing to deliver consistent aftermarket services Declining trend in R&D spend Product release with quality issues (A380 engines) Exposure to multiple economies Working capital fluctuations

    Continued product improvements / innovations through R&D investments


    Strong global presence and network Bargaining power with suppliers

    products

    Opportunities Master subtitle Threat Click to edit style To create brand equity through delivering high quality s

    Consistently maintaining the quality of the product Poor aftermarket services affecting new engine sales

    Differentiate with efficient product support

    Develop fuel efficient products / invest in new technologies

    Rising fuel prices and regulatory pressures (Environmental / Fuel efficiency)

    Business opportunities in Emerging Markets / Diversification of product portfolio

    Economic uncertainty / Reduction in Govt spending / Dependence on Airline industry


    Vertical integration 5/25/12

    Fluctuation in raw material prices

    Key Financial Issues


    Is the earnings growth rate sustainable in view of competition ? Does the dividend policy support the required R&D investments ?
    Click to edit Master subtitle style

    Is the order book healthy and growing? How is the working capital managed to mitigate material price escalations? What is the revenue mix between product portfolios? 5/25/12

    PERL Analysis
    Performance
    ROE ROCE Gross Margin Operating Margin ex. R&D R&D to Revenue

    2011

    2010

    Risk
    Gearing

    Click to edit Master subtitle style Liability 2011 2010


    36.54 % 40.11% 35.65 % 17.55% 0.92 55.25 -9.23 0.37 0.98 3.13 Current ratio

    18.77 % 13.65% 11.62 % 7.75% 13.81 % 13.20% 68.00 % 66.00% 0.37 % .39%

    Efficiency

    2011

    2010

    Debtors Age 131.5 129.8 Creditor Age 262.3 242.8 Stock turnover (days) 105.0 99.8 CER 0.97 1.01 SGA/ OB 0.05 0.11 in Dividend / in 0.003 OM 7 0.0014

    2011

    2010

    120.23 136.86 % %

    Interest Cover Beaver Failure ratio Short term Debt cover ratio Forex fluctuation ratio

    5/25/12

    Acid Test 81.88% 99.54% Cash exhaustion ratio (days) 24.64 486.95 OCF to Current Liabilities 18.88% 19.20% Cash over Current assets 15.75% 29.10%

    Is the earnings growth rate sustainable in view of competition ? - ROE increased from 13.65% to 18.77% with strong Order book however the CER reduced. Does the dividend policy support the required R&D investments ? Spending more dividend on generating operating profit Is the order book healthy and growing? - Order book 5% for 2011 What is the revenue mix between product portfolios? - Civil/Defense Aerospace 69%, Marine 20%, Energy 11%
    5/25/12 Click to edit Master subtitle style

    Key Financial Issues

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