Question:
Discuss about the Analysis of Coats Group.
The company chosen for review is Coats group plc which is a British multinational company and is engaged in the manufacturing and the distribution of the sewing thread and applied and is also the second largest manufacturer of the various zips and the fasteners after the company that is its competition known by the name of YKK.
The history of the company goes way back to the year 1755 during which James and Patrick Clark began to loom its equipment and the silk thread business in Paisley in the area of Scotland.
During the year 1806, the owner Patrick invented one way of twisting the cotton thread together for the purposes of substituting the same for the silk thread that were not available during that time in the region of France’s blockade in the Great Britain.
He then went on to open his firs plant for the manufacturing the cotton thread in the year of 1812. In the year if 1864, the Clark family began the manufacture in the region of Newark, New Jersey in the country of the United States as the Clark thread company.
During the year of 1802, James Coats went on to set up the weaving business which was also situated in Paisley. In the year 1826, he went on to open one cotton mill at the Ferguslie for the purposes of producing his own thread. But then he retired during the year 1830 and it was then that his sons James and Peter took over the business in their own hands and names the business as J & P sons.
The firm the expanded internationally especially in the country of the United States of America. During the year 1890, the company got itself listed on the London Stock Exchange and had the capital base of £5.7 millions.
During the eyar 1952, the company and the Clark Thread company got merged and during the year 1961, there was a merger of Patons and Baldwin’s and this created the Coats Patons.
During the year 1986, the company then merged with Vantona Viyella and that created the company by the name of Coats Viyella. During the year 2003, Guinness Peat took the coats private and during the year 2015, they returned in the market as the name of Coats group.
During the year of 2007, the company was fined €110 by the Europen commission for the purposes of participating in the cartels with the company known by the name of Prym, YKK. There were also other companies that were involved for the purposes of fixing and manipulating the prices of the various zips and the fasteners and the machinery that help make them. One of the cartels ran for about 21 years.
The company had also filed an appeal for the same to the General court of the European union for the purposes of dismissing the fine and the fine was finally upled and since then the company has been working tirelessly for the society.
The review of the annual report available at the website of the company has been used (Coats, 2016).
The assets of the company along with the liabilities shows a decrease or a fall in the values. The total decrease or the reduction shows a fall of 57% in total which is not very good since that would just hinder the growth of the company. The management must consider the stated facts and must pull up its socks so that the company can perform more efficiently and effectively since ultimately, the company is running for earning profits and to serve the society.
The revenues and the expenses of the company have decreased drastically and the main reason behind the same is the fact of decrease in the sales revenue. The company must look for the way through which this revenue can be increased since that would be good for the company. The company could promote its products or the services that it renders, adopt some of the marketing strategies so that the revenues could be increased by a greater %.
The company has not added a single $ to it but has only absorbed the money that was being introduced into the business which shows inefficiently on the part of the company. Hence, the company must undertake measures so that this could be improved.
The above table shown no change in the amount of the issued capital, no change in the shares that have been held under trust since there is no amount involved in the same. There has been a very minimal amount of change in the reserves. There has been a change of 55% in the total amount of the retained earnings along with a negligible change in the non-controlling interests.
There has been no change whatsoever in the number of the ordinary shares.
Review of the balance sheet:
The current assets of the company are $1122.6 millions
The non-current assets of the company are $627.9 millions
The current liabilities of the company are $437.9 millions
The non-current liabilities of the company are $958.6 millions
The total stockholder’s equity of the company are $354 millions
The following is the table for comparisons:
|
(Amounts in $ in millions) |
|||
|
Particulars |
2015 |
2014 |
% increase or -decrease |
|
Total current assets |
1,122.60 |
1,308.40 |
-0.14 |
|
Total non-current assets |
627.90 |
653.90 |
-0.04 |
|
Total current liabilities |
437.90 |
576.60 |
-0.24 |
|
Total non-current liabilities |
958.60 |
985.10 |
-0.03 |
|
Total stockholder’s equity |
354.00 |
400.60 |
-0.12 |
The assets of the company along with the liabilities shows a decrease or a fall in the values. The total decrease or the reduction shows a fall of 57% in total which is not very good since that would just hinder the growth of the company. The management must consider the stated facts and must pull up its socks so that the company can perform more efficiently and effectively since ultimately, the company is running for earning profits and to serve the society.
Review of the income statement:
The total operating revenues of the company are $1489.5 millions
The Cost of goods sold of the company are $946.6 millions
The total expenses before taxes of the company are $31.2 millions
The non-operating gains and losses of the company are $0
The earning per share of the company is $3.61
The following is the table for comparisons:
|
(Amounts in $ in millions) |
|||
|
Particulars |
2015 |
2014 |
% increase or -decrease |
|
Total operating revenues |
1,489.50 |
1,561.40 |
-0.05 |
|
Cost of goods sold |
946.60 |
993.40 |
-0.05 |
|
Total expenses (before taxes) |
31.20 |
6.50 |
3.80 |
|
Any non-operating (or extraordinary) gains and losses |
– |
1.50 |
-1.00 |
|
Earnings per common share |
-3.61 |
1.06 |
-4.41 |
The revenues and the expenses of the company have decreased drastically and the main reason behind the same is the fact of decrease in the sales revenue. The company must look for the way through which this revenue can be increased since that would be good for the company. The company could promote its products or the services that it renders, adopt some of the marketing strategies so that the revenues could be increased by a greater %.
Review of the statement of cash flows:
The net cash inflow from operating activities of the company are $ 44.3 millions
The net cash inflow from the financing activities of the company are $-16.4 millions
The net cash inflow from the investing activities of the company are $-48 millions
The net increase in the cash during the year of the company are $-20.10 millions
The following is the table for comparisons:
|
(Amounts in $ in millions) |
|||
|
Particulars |
2015 |
2014 |
% increase or -decrease |
|
Net cash inflow from operating activities |
44.30 |
80.90 |
-0.45 |
|
Net cash inflow from financing activities |
-16.40 |
-50.50 |
-0.68 |
|
Net cash inflow from investing activities |
-48.00 |
-27.90 |
0.72 |
|
Net increase in cash during the year |
-20.10 |
2.50 |
-9.04 |
The company has not added a single $ to it but has only absorbed the money that was being introduced into the business which shows inefficiently on the part of the company. Hence, the company must undertake measures so that this could be improved.
Review of the stockholders equity:
The following is the list of the required account balances:
|
(Amounts in $ in millions) |
|||
|
Particulars |
2015 |
2014 |
% increase or -decrease |
|
Issued capital |
127.00 |
127.00 |
– |
|
Shares held in trust |
– |
– |
– |
|
Reserves |
335.70 |
334.40 |
0.00 |
|
Retained earnings |
-14.30 |
-32.10 |
-0.55 |
|
Non-controlling interests |
24.70 |
24.30 |
– |
|
Number of shares: |
|||
|
Ordinary shares |
1,407,612,282 |
1,407,612,282 |
|
|
Preference shares |
– |
– |
|
The above table shown no change in the amount of the issued capital, no change in the shares that have been held under trust since there is no amount involved in the same. There has been a very minimal amount of change in the reserves. There has been a change of 55% in the total amount of the retained earnings along with a negligible change in the non-controlling interests.
There has been no change whatsoever in the number of the ordinary shares.
Conclusion:
From the analysis of the above, it is very much apparent that the business activities hinders the growth of the company and that the management must take this matter sin it won hands so that the revenues, assets of the company could be increased since that would only lead the company to go into liquidation. That could only lead to the loss of shareholders and the other stakeholders of the company.
In the nutshell, the following are the points:
The assets of the company along with the liabilities shows a decrease or a fall in the values. The total decrease or the reduction shows a fall of 57% in total which is not very good since that would just hinder the growth of the company. The management must consider the stated facts and must pull up its socks so that the company can perform more efficiently and effectively since ultimately, the company is running for earning profits and to serve the society.
The revenues and the expenses of the company have decreased drastically and the main reason behind the same is the fact of decrease in the sales revenue. The company must look for the way through which this revenue can be increased since that would be good for the company. The company could promote its products or the services that it renders, adopt some of the marketing strategies so that the revenues could be increased by a greater %.
The company has not added a single $ to it but has only absorbed the money that was being introduced into the business which shows inefficiently on the part of the company. Hence, the company must undertake measures so that this could be improved.
The above table shown no change in the amount of the issued capital, no change in the shares that have been held under trust since there is no amount involved in the same. There has been a very minimal amount of change in the reserves. There has been a change of 55% in the total amount of the retained earnings along with a negligible change in the non-controlling interests.
There has been no change whatsoever in the number of the ordinary shares.
References:
Coats.com. (2016). Coats plc. [Online] Available at: https://www.coats.com/ [Accessed 23 May 2016].
Coats.com. (2016). Coats plc – Change of name. [Online] Available at: https://www.coats.com/index.asp?pageid=320 [Accessed 23 May 2016].
Coats.com. (2016). Coats plc – Our businesses. [Online] Available at: https://www.coats.com/index.asp?pageid=14 [Accessed 23 May 2016].
https://www.coats.com/. (2016). Annual report 2015. [Online] Available at: https://www.coats.com/assets/files/cms/CoatsARA_2015_10March_WEB.pdf [Accessed 23 May 2016].
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