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Five Year Retrospective Study of the Financial Situation of Northern Foods Plc., United Kingdom

Author

Listed:
  • Louie DACOSTA

    (MBA (Finance) and FCCA, London, England)

  • Charles ADUSEI

    (Garden City University College, Ghana)

Abstract

This study was conducted as a retrospective analysis of Northern Foods Plc., once a major player in FTSE 350 Food Sector, to evaluate its financial situation over a five year period. The ex post factor research design was used for this study. Annual reports and databases on Northern Foods Plc., and Associated British Foods Plc., were used to perform a series of ratio analyses. The results revealed that Northern Foods Plc.’s performance has been declining as evidenced in the profitability ratios calculated. Also, financial strength was weak and working capital has not been effectively managed, hence affecting its cash and profit generation potentials. The company was limited in its ability to grow and expand as it needed to regularly fund its pension deficit, and finance its high levels of debt. The study concludes that Northern Foods was not in a very strong financial position, yet it was not making the required investments to improve, hence its takeover though this paper will not rule out non-financial issues. Furthermore, the study prescribed five generic points to improve the financial health of any organisation.

Suggested Citation

  • Louie DACOSTA & Charles ADUSEI, 2016. "Five Year Retrospective Study of the Financial Situation of Northern Foods Plc., United Kingdom," Expert Journal of Finance, Sprint Investify, vol. 4, pages 19-30.
  • Handle: RePEc:exp:finnce:v:4:y:2016:i::p:19-30
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    Cited by:

    1. Charles ADUSEI & Louie DACOSTA, 2016. "Five Year Retrospective Study of the Financial Situation of Northern Foods Plc., United Kingdom," Expert Journal of Finance, Sprint Investify, vol. 4(1), pages 19-30.

    More about this item

    Keywords

    financial situation; retrospective study; 2003 -2007; Northern Foods Plc.;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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