M & S RATIOS

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All the performance ratios are poor and in decline. Operating the company used up 89% of its sales revenue and financial charges used up another 5%, meaning that only 6% was left for it to invest in the company’s future. Working capital ratios are almost constant and are satisfactory. From  a risk point of view its debt ration is constant and its dividend cover is satisfactory. The shareholders, although getting good dividends, looks poor. The return on shareholders’ funds is poor and the profits do not cover the dividend.

Note that profits have been calculated AFTER deducting the large adjustment figures that the company had excluded, because Thomas Cook was criticised recently by a Parliamentary committee for excluding such adjustments.

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