Thursday, October 24, 2019
| COMMENT | ||||||
| All the performance ratios are in decline and are poor . The improvement in the utilistion of the asset | ||||||
| base prevented the return on operating assets from declining further in 2019. | ||||||
| The company converts 6% of its revenues into funds available for investment. As can be seen, this is | ||||||
| due to its operating expenses consuming 89 % of its sales revenue, with financial charges consiming a | ||||||
| further 5%, partly because of the company’s generous dividend policy. | ||||||
| Working capital ratios are almost constant and satisfactory. The receivable days have to be | ||||||
| interpreted with caution as sales are paid for with a mixture of cash and credit cards. | ||||||
| Shareholder performance is poor and the dividends are not covered. The debt ratio is constant and the | ||||||
| interest cover is satisfactory. | ||||||
| In October 2019, Thomas Cook Management attended before a selection committee in Parliament. The | ||||||
| view expressed by the committee was that exceptional item were not, in fact exceptional; they | ||||||
| occurred every year. For this reason theM &S profit figures used are after charging the adjustment | ||||||
| items shown in the income statements. | ||||||