Associated British Foods 1

ASSOCIATED BRITISH FOODS

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 Associated British Foods 2

Executive Summary

Associated British Foods is one of the top 100 companies listed on the London Stock Exchange.
It is a well-diversified company with a presence in multiple geographies. The group has earned
revenue of 15.8 billion pounds with adjusted profits of 1,406 million pounds. It has provided a
dividend of 46.35 pence out of the Earning per share of 137.5 pence. It is also on a growth path
and invested an amount of Pound 837 million. After the analysis of the company's financials and
relevant ratios for the last 4 years, the company shows strength in the financials with a little lag
in the revenues and operating profits of the company. Even considering a lack of growth in the
operating ratios, the company still seems to be worthwhile investment due to its fundamental
strength, presence in the non-cyclical industry, and diversified business.
 Associated British Foods 3

Table of Contents

EXECUTIVE SUMMARY .........................................................................................................................................1

INTRODUCTION TO THE COMPANY .................................................................................................................4

NATURE OF BUSINESS ................................................................................................................................................4

A BRIEF OVERVIEW OF THE FINANCIAL PERFORMANCE OF THE COMPANY ........................................................5
IMPORTANT RATIOS AND ITS RELEVANCE .................................................................................................................5
LIQUIDITY RATIOS .....................................................................................................................................................5
Current Ratio: .......................................................................................................................................................6
Quick Ratio: ..........................................................................................................................................................6
Operating Cash Flow Ratio: .................................................................................................................................6
Net Cash per Debt: ...............................................................................................................................................6
ACTIVITY RATIOS ......................................................................................................................................................7
Asset Turnover Ratio.............................................................................................................................................7
Inventory Turnover Ratio ......................................................................................................................................8
DEBT RATIOS .............................................................................................................................................................8
Debt to Asset Ratio: ..............................................................................................................................................8
Debt Equity Ratio: ................................................................................................................................................9
PROFITABILITY RATIOS ..............................................................................................................................................9
Profit Margin Ratio ............................................................................................................................................ 10
Return on Equity Ratio........................................................................................................................................ 10
Return on Capital Employed ............................................................................................................................... 10
MARKET RATIOS ...................................................................................................................................................... 10
Earnings per Share ............................................................................................................................................. 11
Price Earnings Ratio........................................................................................................................................... 11

COMPARATIVE ANALYSIS WITH COMPETITOR ......................................................................................... 11

TREND ANALYSIS AND COMMENTARY ON THE FINANCIAL PERFORMANCE ................................. 12

COMMENTS FROM AN INVESTOR’S POINT OF VIEW ................................................................................ 12

CONCLUSION & RECOMMENDATIONS .......................................................................................................... 13

LIMITATIONS IN THE ANALYSIS ...................................................................................................................... 13

REFERENCE LIST .................................................................................................................................................. 14

APPENDICES............................................................................................................................................................ 15
 Associated British Foods 4

Introduction to the Company

Associated British Foods, a conglomerate operating out of the UK and based in London, a
company involved in food articles, manufacturing, and other related activities. The company
primarily deals in Retail, agriculture, Ingredients, Sugar, and grocery. A few of its most notable
and widely known brands are Twinings, Ovaltine, Tiptop, Kingsmill, Jordans, and Yumi’s, etc. It
is well-diversified geographically and boasts the presence in 52 countries and mainly in the Asia
Pacific, the Americas, the UK, and Africa, etc. As per an annual report published for 2019, the
company reported group revenue of Euro 15.8 billion and adjusted profit before tax at Euro
1.406 million.

Nature of Business

The company primarily deals in 5 major sections; Grocery, Agriculture Sugar, Ingredients, and
Retail.

1. Grocery: In the grocery department, it has multiple well-recognized brands across nations.
The most popular ones are Twinings, Acetum, AB World Foods, Allied Bakeries, and
Ovaltine. Twining and Ovaltine are the most widespread brands with recognition in
around 100 countries. Other brands and products include Balsamic Vinegar, food
ingredients, cereals, snacks, retail shops, sports nutrition, bread, and baked goods, etc.
(Associated British Foods, 2019).

2. Sugar: It is a leading company in the sugar manufacturing and operates 24 plants

worldwide and employs around 34,000 people (Associated British Foods, 2019).

3. Agriculture: It provides services and agri-food to various industries. It has a presence in 65

countries and employs around 3,000 individuals (Associated British Foods, 2019).

4. Ingredients: It is a global supplier of yeast, specialty ingredients, and bakery products

across the globe with 52 operating plants along with 7,000 employees.
 Associated British Foods 5

5. Retail: Its retail business is popular for its quality and trendy fashion products. It has 373
operating stores with 78000 employees.

A Brief Overview of the Financial Performance of the Company

The revenue of the company has grown over the years, but the profit for the years has reduced a
tad but seems manageable considering other ratios. The asset is on the regular increase with
debts and other parameters lowering over the years. The company is in a growing phase but
facing some revenue-related issues which could be managed over the years.

Important Ratios and Its Relevance

The following are some ratios important for the analysis of a company. These are divided into
five broad categories;

Liquidity Ratios
It helps in understanding the company’s capacity to pay its debts, and the margin of safety
enjoyed by the company. The most relevant ratios for checking the liquidity position of the
company are as follows:

Particulars 2019 2018 2017 2016

Current Ratio 1.82 1.63 1.65 1.50
Quick Ratio 1.05 0.95 0.98 0.81
Operating Cash Flow
0.49 0.44 0.52 0.44
Ratio

Source: (Associated British Foods, 2019; Associated British Foods, 2018; Associated British
Foods, 2018; Associated British Foods, 2016).
 Associated British Foods 6

Liquidity Ratio
1.82 1.63 1.65
2.00 1.50
1.05 0.95 0.98 0.81
1.00 0.49 0.44 0.52 0.44

0.00
2019 2018 2017 2016

Current Ratio Quick Ratio Operating Cash Flow Ratio

Current Ratio:
The company’s ability to clear off its short-term debt is measured by the current ratio. A current
ratio of one is considered good. As we can see that the company’s current ratio is more than 1.5
which is quite healthy and it is growing on year on year basis which seems very promising.

Quick Ratio:
It goes one step further than the Current Ratio and reflects the company’s strength for paying
short-term obligation with its most liquid assets. It does take into account only near cash assets
and liabilities. Quick Ratio is derived by deducing inventory and prepaid expenses from the
Current Liabilities. The quick ratio generally follows the pattern on the Current Ratio and here
again, the company has shown a ratio of more than one and is growing regularly. It indicates that
the company is well funded to fulfill its immediate requirements.

Operating Cash Flow Ratio:

Above ratio talks about the company’s operating cash flow ability to cover its current liabilities.
A ratio of one or more is considered good and reflects the strength of operating revenues to cover
its liabilities. Operating cash flow should be around 1. But, in this case, the operating cash flow
ranges around .50 which is a little negative as it could mean that the company has a large sale in
a credit or it is unable to get realization from debtors on an efficient basis.

Net Cash per Debt:

This parameter indicates the cash position of the company against the debts raised by it. As
mentioned in the table above, the ratio is growing chronologically, and that reflects a healthy
amount of cash on the books.
 Associated British Foods 7

Activity Ratios

Activity ratios help to gauge in the abilities of the company to employ its assets and resources to
generate revenue. The few most sought after ratios are Asset Turnover Ratio, Inventory Turnover
Ratio, and Accounts Receivable Turnover Ratio.

Particulars 2019 2018 2017 2016

Asset Turnover Ratio 1.15 1.14 1.20 1.18
Inventory Turnover
6.63 7.12 7.31 6.59
Ratio

Source: (Associated British Foods, 2019; Associated British Foods, 2018; Associated British
Foods, 2018; Associated British Foods, 2016).

Activity Ratios
8.00
6.00
4.00
2.00
0.00
2019 2018 2017 2016

Asset Turnover Ratio Inventory Turnover Ratio

Asset Turnover Ratio

It measures the efficiency of the entity to convert assets into the revenue. The higher ratio shows
a better utilization of the resources. The formula stands as Total turnover divided by average
assets over a period. The standard ratio should be more than one and as evident above it has
remained in a similar range over the years. The trend as we can see is sideways and doesn’t
 Associated British Foods 8

reflect a strong trend. But, still, it is a healthy sign that the company can clock revenue to the
tune of assets employed in business.

Inventory Turnover Ratio

The inventory turnover ratio indicates the times at which an organization could convert its
underlying inventory in the sales. The higher ratio is considered better because it shows the
smoother flow of sales and lesser inventory stocking. This is derived by dividing the total
turnover of the inventory of the company. A lower ratio implies efficient utilization of inventory
in hand along with faster turnout cycles. So, given the data above, it is growing a tad over the
years. But still, it is in the manageable range.

Debt Ratios

Particulars 2019 2018 2017 2016

Debt to Asset Ratio 0.05 0.05 0.06 0.07
Debt Equity Ratio 0.45 0.48 0.53 0.60

Source: (Associated British Foods, 2019; Associated British Foods, 2018; Associated British
Foods, 2018; Associated British Foods, 2016).

Debt Ratios
1.00

0.50

0.00
2019 2018 2017 2016

Debt Ratios Debt Equity Ratio

Debt to Asset Ratio:

It is one of the prime indicators for considerations of an asset as per unit of debt. The ratio is
considered better as lower. The company has seen lower ratios over the year and that indicates a
good sign of financial performance.
 Associated British Foods 9

Debt Equity Ratio:

Equity is the owner's funds and debt has to be paid in case of liquidation of the company. So, the
optimal ratio is 2:1. The company has managed to reduce its debt to equity ratio lower as the
years passed by. It indicates a reduction in the total debt of the company. It is a positive
indicator.

Profitability Ratios
These ratios are one of the most looked after parameters from the investor’s point of view. This
ratio checks the company for profit it will be generated from its resources. A few important
profitability ratios are Profit Margin Ratio, Return on Equity, and Return on Capital Employed.

2019 2018 2017 2016

Profit Margin 5.66% 6.56% 7.89% 6.13%
Return on Equity 12.41% 13.89% 18.90% 14.77%
Return on Capital
13% 14% 20% 15%
Employed

Source: (Associated British Foods, 2019; Associated British Foods, 2018; Associated British
Foods, 2018; Associated British Foods, 2016).

Profitability Ratios
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2019 2018 2017 2016

Profit Margin Return on Equity Return on Capital Employed

 Associated British Foods 10

Profit Margin Ratio

It indicates the fraction of the revenue converted as a net profit to the company. It is much
relevant measure to understand the trend in the profitability of the company over the years. Profit
margins are considered better if it increases on a gradual level. As visible from the above table, it
seems like dipping and that is considered as a negative.

Return on Equity Ratio

It indicates the percentage a company earns in the way of return on the capital employed by the
company. A higher return indicates the better-earning capacity of an organization. The return of
Equity should be higher but not because of the push of external borrowings. Here the ROE is
also moving towards the pit which is also a negative factor.

Return on Capital Employed

This measure checks the company’s profit-generating capability on its capital employed i.e.
Share capital, retained earnings, and long-term borrowings. It means a company how effectively
earns for its equity and debt holders. Return on capital is in the range of 18%-20% and that is
quite healthy. There is no specific trend in this ratio but still, it is healthy.

Market Ratios

These ratios are generally used by investors for the companies listed in the stock markets. Few
noted parameters are as follows:

Particulars 2019 2018 2017 2016

EPS 111.10 127.50 151.60 103.40
PE Ratio 21.00 17.65 21.04 26.29

Source: (Associated British Foods, 2019; Associated British Foods, 2018; Associated British
Foods, 2018; Associated British Foods, 2016).
 Associated British Foods 11

Market Ratios
200.00
150.00
100.00
50.00
0.00
2019 2018 2017 2016

EPS PE Ratio

Earnings per Share

It is the total earnings or profits after tax deducted by other relevant expenses such as preference
dividends and all further divided by the total outstanding shares of the company. EPS of the
company is in the denomination of pence and it has lowered in comparison to the previous years.
This is one of the most important metrics considered by investors.

Price Earnings Ratio

This ratio denotes the times of which a stock is being traded-in concerning its earnings. It is used
to compare multiple companies in similar industries. A higher PE ratio indicates that the
company is trading expensive in the market. But, good companies with strong financials
generally trade higher in the market. A gradual increase in the PE ratio is an indication of lower
earnings per share or higher price of the company.

Comparative Analysis with Competitor

Associated British Foods is diversified in various segments and a heavyweight company. It could
be compared with a similar company named Sainsbury’s plc. It also has a strong presence in the
retail departments, and grocery segment. Again, it also has some unrelated segments such as
Property and Financial Services. The Sainsbury’s net profit margin trend is lowering year on
year, Asset Turnover-1.27, Return on Equity-2.53, current ratio – 0.66, Quick Ratio-0.49, Debt-
Equity- 0.13, Assets Turnover- 1.27, The asset turnover ratio is similar in comparison to the
company which is stable over the years. The ROE is quite more than Sainsbury’s but it gets
 Associated British Foods 12

lower over the years. Current Ratio of the company is quite better and performed consistently in
comparison

Trend Analysis and Commentary on the Financial Performance

The company is facing some issues in the revenue and profitability front, these could be
managed in a longer period as every stock seems to have some cyclicity involved. The main
parameters of the company are the financial and balance sheet strength where the excels. Over
the years, almost all the parameters have shown positive growth which is a healthy sign. Below
given trend analysis is showing the way the company is performing in terms of revenue and
profit.

Trend Analysis

16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2019 2018 2017 2018

Revenue Operating profit Profit for the period

Comments from an Investor’s Point of View

The company stands a good pick under the ratios and financials mentioned above. The company
has consistent in clocking the good return on the investments made in the company and that is
visible through its ROCE and ROE ratios. A regular dividend-paying stock is a hot favorite of
investors, but it sees some lags in EPS. The PE of the stock is also on a lower trend and given the
strong fundamental footing of the company, it appears lucrative.
 Associated British Foods 13

Conclusion & Recommendations

If we consider the company based on the quantitative analysis, the company has certain
advantages such as strong presence across geographies, recognizable brands, diversified product
portfolio, consistent expansion policies, etc. These factors are considered very important for a
long-term investor because issues of the short term would be easily taken care of if the holding
horizon is high.

On the qualitative front, the company excels too. It has performed well in various parameters or
ratios as described above. The financial strength of the company is judged by the liquidity ratios
and it has scored well in the current ratio, quick ratio, and net cash to debt ratio. In the operating
cash flow indices, it has performed averagely and that could be taken up in the coming years. A
strong liquidity position gives an assurance towards liquidation and default situations. Other
ratios such as activity and profitability ratio are also considered good. It has boasted a good asset
turnover ratio indicating the optimum utilization of resources. With an increase in the
macroeconomic factors, most probably the company would achieve its earlier feat. The economic
struggle would be cleared due to its strong fundamentals and stronghold over the clients is a
positive factor fueling the growth in the future.

Limitations in the Analysis

Financial Analysis is based on past data and there is no guarantee that the company would be
able to perform as in earlier years. The UK is facing economic issues as businesses are facing
headwinds. Also, the reduction in Primark's revenue is also a big concern. It generates
approximately 50% of the revenue and 60% of the sales. But the management has assured that it
is ready to face challenges, and any such issues won’t affect the company much.
 Associated British Foods 14

References

Associated British Foods, 2016. Annual Reports and Accounts 2017, London: Associated British
Foods.[Online] Available at;
https://www.abf.co.uk/documents/pdfs/ar_cr_2016/2016_annual_report.pdf (( accessed
on 11/01/2020)

Associated British Foods, 2017. Annual Reports and Accounts 2018, London: Associated British
Foods. Available at; https://www.abf.co.uk/documents/pdfs/arcr-2017/abf_ar_2017.pdf (
accessed on 11/01/2020)

Associated British Foods, 2018. Annual Reports and Accounts 2019, London: Associated British
Foods.[Online] Available at;
https://www.abf.co.uk/documents/pdfs/2018/abf_ar18_web.pdf ( accessed on
11/01/2020)

Associated British Foods.,2019. Annual Reports and Accounts 2016, London: Associated British
Foods. Available at; https://www.abf.co.uk/documents/pdfs/2019/ar2019/ar2019.pdf
(accessed on 11/01/2020)
 Associated British Foods 15

Appendices
The calculation of ratios mentioned above has been taken from the information mentioned
below. The financial statements are taken from the Annual Reports for the year 2019, 2018,
2017, and 2016 of Associated British Foods.

2019 2018 2017 2018

Continuing operations
£m £m £m £m
Revenue 15,824 15,574 15,357 13,399
- - - -
Operating costs before exceptional items
14,524 14,290 14,090 12,364
Exceptional items -79 –
Share of profit after tax from joint ventures and 1,221 1,284 1,267 1,035
associates 57 54 63 57
Profits less losses on disposal of non-current
4 6 6 11
assets
Operating profit 1,282 1,344 1,336 1,103

Adjusted operating profit 1,421 1,404 1,363 1,118

Profits less losses on disposal of non-current
4 6 6 11
assets
Amortization of non-operating intangibles -47 -41 -28 -21
Acquired inventory fair value adjustments -15 -23
Transaction costs -2 -2 -5 -5
Exceptional items -79 –
Profits less losses on sale and closure of
-94 -34 293 -14
businesses
Profit before interest 1,188 1,310 1,629 1,089
Finance income 15 15 9 6
Finance expense -42 -50 -59 -56
 Associated British Foods 16

Other financial income 12 4 -3 3

Profit before taxation 1,173 1,279 1,576 1,042

Adjusted profit before taxation 1,406 1,373 1,310 1,071

Profits less losses on disposal of non-current
4 6 6 11
assets
Amortization of non-operating intangibles -47 -41 -28 -21
Acquired inventory fair value adjustments -15 -23
Transaction costs -2 -2 -5 -5
Exceptional items -79 –
Profits less losses on sale and closure of
-94 -34 293 -14
businesses
Taxation – UK (excluding tax on exceptional
-75 -105 -62 -73
items)
– UK (on exceptional items) 12 –
– Overseas -214 -152 -303 -148
-277 -257 -365 -221
Profit for the period 896 1,022 1,211 821
Attributable to
Equity shareholders 878 1,007 1,198 818
Non-controlling interests 18 15 13 3
Profit for the period 896 1,022 1,211 821
Basic and diluted earnings per ordinary share
111.1 127.5 151.6 103.4
(pence)
Dividends per share paid and proposed for the
46.35 45 41 36.75
period (pence)
Source: (Associated British Foods, 2019; Associated British Foods, 2018; Associated British
Foods, 2018; Associated British Foods, 2016).
 Associated British Foods 17

Balance Sheet for Last Four Years

2019 2018 2017 2016

£m £m £m £m
Non-current assets
Intangible assets 1,681 1,632 1,414 1,348
Property, plant and
5,769 5,747 5,470 5,145
equipment
Investments in joint
225 219 210 221
ventures
Investments in associates 50 47 44 39
Employee benefits assets 228 579 285 6
Deferred tax assets 160 133 143 139
Other receivables 51 50 54 41
Total non-current assets 8,164 8,407 7,620 6,939
Current assets
Assets classified as held
43 – – 312
for sale
Inventories 2,386 2,187
Biological assets 84 84 2,101 2,033
Trade and other
1,436 1,436 90 86
receivables
Derivative assets 99 132 1,342 1,337
Current asset investments 29 30 79 105
Income tax 24 54 28 9
Cash and cash equivalents 1,495 1,362 1,550 555
Total current assets 5,596 5,285 5,190 4,437
Total assets 13,760 13,692 12,810 11,376
Current liabilities
Liabilities classified as
-6 – – -75
held for sale
 Associated British Foods 18

Loans and overdrafts -227 -419 -265 -245

Trade and other payables -2,556 -2,529 -2,500 -2,366
Derivative liabilities -52 -52 -113 -73
Income tax -163 -160 -170 -147
Provisions -64 -88 -105 -54
Total current liabilities -3,068 -3,248 -3,153 -2,960
Non-current liabilities
Loans -361 -359 -612 -640
Other payables -271 -269 -216 -185
Provisions -54 -52 -27 -34
Deferred tax liabilities -261 -324 -231 -139
Employee benefits
-195 -144 -159 -296
liabilities
Total non-current
-1,142 -1,148 -1,245 -1,294
liabilities
Total liabilities -4,210 -4,396 -4,398 -4,254
Net assets 9,550 9,296 8,412 7,122
Equity
Issued capital 45 45 45 45
Other reserves 175 175 175 175
Translation reserve 409 363 456 433
Hedging reserve -9 13 -31 -22
Retained earnings 8,832 8,615 7,694 6,423
Total equity attributable
9,452 9,211 8,339 7,054
to equity shareholders
Non-controlling interests 98 85 73 68
Total equity 9,550 9,296 8,412 7,122
 Associated British Foods 19

Cash Flow Statement

2019 2018 2017 2016

£m £m £m £m
Cash flow from operating activities
Profit before taxation 1,173 1,279 1,576 1,042
Profits less losses on disposal of non-current assets -4 -6 -6 -11
Profits less losses on sale and closure of businesses 94 34 -293 14
Transaction costs 2 2 3 5
Finance income -15 -15 -9 -6
Finance expense 42 50 59 56
Other financial income -12 -4 3 -3
Share of profit after tax from joint ventures and
-57 -54 -63 -57
associates
Amortization 68 65 57 47
Depreciation 544 509 514 439
Exceptional items 79 –
Acquired inventory fair value adjustments 15 23
Effect of hyperinflationary economies 6 –
Net change in the fair value of current biological
– 5 – -12
assets
Share-based payment expense 22 19 21 7
Pension costs less contributions -10 4 12 7
Increase in inventories -202 -35 -40 -62
Decrease/(increase) in receivables 18 -99 -2 -55
Increase/(decrease) in payables 44 -19 168 107
Purchases less sales of current biological assets -1 -1 -2 -2
Decrease in provisions -28 -30 -1 5
Cash generated from operations 1,778 1,727 1,997 1,521
 Associated British Foods 20

Income taxes paid -269 -297 -356 -211

Net cash from operating activities 1,509 1,430 1641 1310
Cash flows from investing activities
Dividends received from joint ventures and
52 42 69 25
associates
Purchase of property, plant and equipment -680 -787 -823 -774
Purchase of intangibles -57 -81 -43 -30
Sale of property, plant and equipment 12 23 49 27
Purchase of subsidiaries, joint ventures and
-84 -208 -79 -10
associates
Sale of subsidiaries, joint ventures and associates 6 1 452 –
Interest received 20 10 8 6
-
Net cash from investing activities -731 -367 -756
1,000
Cash flows from financing activities
Dividends paid to non-controlling interests -4 -4 -4 -10
Dividends paid to equity shareholders -358 -327 -299 -279
Interest paid -43 -50 -59 -62
Decrease in short-term loans -263 -111 49 -109
Increase in long-term loans 2 19 -9 12
Decrease/(increase) in current asset investments 1 -30
-1 -1
Sale of shares in subsidiary undertakings to non-
– 1 -3 -252
controlling interests
Movements from changes in own shares held -25 -30 -10 -19
Net cash from financing activities -691 -533 -335 -719
Net increase/(decrease) in cash and cash
87 -103 939 -165
equivalents
Cash and cash equivalents at the beginning of the
1,271 1,386 462 585
period
 Associated British Foods 21

Effect of movements in foreign exchange – -12 -15 42

1,358 1,271 1,386 462

Calculation of Ratios

Ratio Calculation

Liquidity Ratio
2019 2018 2017 2016
Current Ratio 1.82 1.63 1.65 1.50
Quick Ratio 1.05 0.95 0.98 0.81
Operating Cash Flow Ratio 0.49 0.44 0.52 0.44

Profitability Ratios
2019 2018 2017 2016
Profit Margin 5.66% 6.56% 7.89% 6.13%
Return on Equity 12.41% 13.89% 18.90% 14.77%
Return on Capital Employed 13% 14% 20% 15%

Market Ratios
2019 2018 2017 2016
EPS 111.10 127.50 151.60 103.40
PE Ratio 21.00 17.65 21.04 26.29

Activity Ratios
2019 2018 2017 2016
Asset Turnover Ratio 1.15 1.14 1.20 1.18
Inventory Turnover Ratio 6.63 7.12 7.31 6.59
 Associated British Foods 22

Debt Ratios
2019 2018 2017 2016
Debt Ratios 0.05 0.05 0.06 0.07
Debt Equity Ratio 0.45 0.48 0.53 0.60

Formulae used for the calculation of ratios:

 Current Ratio: Current Assets / Current Liabilities

 Quick Ratio: (Current Assets - Inventory - Prepaid Expenses) / Current Liabilities
 Operating Cash Flow Ratio: Operating Cash flow / Current Liabilities
 Profit Margin: Net Income / Revenue
 Return on Equity: net Income / Average Shareholders’ Equity
 Return on Capital Employed: EBIT / Capital Employed (Capital Employed = Total
Asset - Current Liabilities)
 Earnings Per Share: Profits Attributable to Equity Shareholders / Outstanding Shares
 PE Ratio: Price / Earnings Per Share
 Asset Turnover Ratio: Total Sales / Beginner =Ending Assets
 Inventory Turnover Ratio: Revenue / Average inventory
 Debt to Asset Ratios: Total Debt / Total Assets
 Debt Equity Ratio: Total Liabilities / Total Shareholders' Equity
Associated British Foods 23