Thursday, October 24, 2019

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.