Introduction to Business Studies

Table of Contents

Introduction.

Calculations for BSky B plc.

Financial performance analysis.

Profits improvement

Conclusion.

Individual Report: MacDonald’s.

Training and development

Macdonald’s training initiative.

Training methodology at Macdonald’s.

Impact of training and development in MacDonald’s.

Conclusion.

References.

Introduction to British Sky Broadcasting Company Plc

British Sky Broadcasting Company Plc is a satellite broadcasting Television Company in Britain. The company also supplies broadband services and telephone in the UK and Ireland. The company is the leader to pay for TV services in the United Kingdom. There was a slight fall in the profits of the company in the year 2014 even after a rise in the revenue. Also, the company achieved a growth of 33% in the number of customers during the year.

Calculations for BSky B plc

Item

2014

2013

Revenue

7632

7235

Cost of sales

4616

4329

Gross profit

3016

2906

Operating profit

1275

1330

Profit for the year

865

979

     

i) Gross profit margin

39.52%

40.17%

     

ii)- Operating profit margin

16.71%

18.38%

     

iii)- Profit margin

11.33%

13.53%

Financial Performance Analysis

Company’s revenue has improved from 2013 to 2014 but the cost of sales has also increased from 4329 million pounds to 4616 million pounds. This shows that expenditure has increased with the increased revenue. Due to this increase expenses, gross profit didn't improve as per the revenue. Also, the gross profit margin that measures the profitability by calculating the amount that has been left over after the cost of sales has declined. But the change in the margin is less than 1%. 

The operating profit of the company has declined and has reached to 1275 million pounds from 1330 million pounds. The operating margin depicts the margin that a company is making on every dollar of sales after the variable cost has been paid off (Lukic, 2018). The operating profit margin has declined in the year 2014 and has come down to 16.71% from 18.38%. This shows that on a dollar of sale after paying off the variable cost, the company was making 18.38% which has declined to 16.71%. The operating profit has declined due to an increase in the cost of operations. The administrative cost might have increased leading to a decline in the operating profits.

The overall increase in the cost of sales and administrative costs has led to a decline in the overall profit of the company. The company's profits have declined from 2013 to 2014. The cost of the company has increased. The cost of sales, operating costs have increased so the net profit margin has also declined. The net profit margin depicts the percentage of net profit that has been generated as per the revenue's percentage (Ega, Illat & Pangerapan, 2017). The net profit margin of the company has declined from 13.53% to 11.33%. This means that the percentage share of the company's profit has reduced in the revenue.

Shareholders will not be satisfied with the performance until and unless the company justifies its expenses. Over the years shareholders expect a growth in the profit as that increases the value of the company on the index and in turn increases their share's worth. The company has increased its dividends that might compensate but the value of shares on the index won't improve. So, shareholders would like to see the growth in profits of the company too for their satisfaction and also the growth purpose of the firm.

Profits Improvement

There are various strategies that a company can adopt for improving the profits of the company. The very first strategy that a company can adopt is to remove the products that are unprofitable or in unprofitable care services. Once the products have been identified that earn profits, it should be decided whether unprofitable products should be removed or not and areas of improvement should be found. Then another strategy that the company can adopt is to increase its rate of conversion. Turning leads into customers is one of the major parts of the business. This will increase the sales of the company and it is one of the important methods of boosting the profits of the business.

Another strategy that can be adopted by the business is to review the structure of pricing. Increasing the price by a smaller amount will create an impact that is significant to the gross profit. So, it is required that the company chooses the appropriate prices for the business. The next strategy that the company can follow is to reduce the direct cost overall. Since the direct cost of the company has increased, it will be better for the business to negotiate the prices and reduces it. This will improve the margins of gross profit. This can be done by eliminating unnecessary purchases. Also, a thorough review should be done and areas, where overspending has occurred, should be found to reduce the cost.

The other thing that the company should do for improving the profits is to reduce their overheads. Overhead expenses creep up over time and it is required that regular review is done. The business overhead expenses have increased due to which net profit has reduced. Thorough scrutiny should be done and it should find out what expenses have led to an increase in the cost. This, in turn, will help in putting a check and thus reduce the cost and improve the profit margin of the company. In this manner, BSky B plc can improve its profits financially. Once the costs are reduced and sales have increased, the company will be able to generate more profits and provide better returns.

Conclusion on British Sky Broadcasting Company Plc Case Study

British Sky broadcasting company plc. was performing well in the year 2013 but in the year 2014, the profits and profit margins of the company reduced. This happened mainly because of an increase in the cost of the company. It was the major reason as the customer base of the company improved in the next year. Also, the dividend payout has improved for the company. So, to improve the profits company can follow various strategies that may include reducing the cost, turning the leads into sales. Reducing the cost will be a major step for the company as that is the main reason why the company has lost its revenue. Shareholders too will expect that company should grow its profit so that the value of their holdings improve.

References for British Sky Broadcasting Company Plc Case Study

Brull, S., Finlayson, S., Kostelec, T., MacDonald, R., & Krenzischeck, D. (2017). Using gamification to improve productivity and increase knowledge retention during orientation. Jona: The Journal of Nursing Administration47(9), 448-453.

Egam, G. E., Ilat, V., & Pangerapan, S. (2017). Pengaruh Return on Asset (ROA), Return on Equity (ROE), Net Profit Margin (NPM), dan Earning Per Share (EPS) terhadap Harga Saham Perusahaan yang Tergabung dalam Indeks LQ45 di Bursa Efek Indonesia Periode Tahun 2013-2015. Jurnal EMBA: Jurnal Riset Ekonomi, Manajemen, Bisnis dan Akuntansi5(1).

Kuranchie-Mensah, E., & Amponsah-Tawiah, K. (2016). Employee motivation and work performance: A comparative study of mining companies in Ghana. Journal of Industrial Engineering and Management, 9(2), 255-309.

Lukić, R. (2018). The Analysis of the Operative Profit Margin of Trade Companies in Serbia. Revista de Management Comparat Internațional19(5), 458-475.

Tismal, A., Awais, M., & Shoaib, O. (2016). On job training and its effectiveness: An employee perspective. South Asian Journal of Banking and Social Sciences2(1), 1-22.

Wolfson, M. A., Tannenbaum, S. I., Mathieu, J. E., & Maynard, M. T. (2018). A cross-level investigation of informal field-based learning and performance improvements. Journal of Applied Psychology103(1), 14.

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