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Halfords Financial Ratios

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Introduction

In this essay I will be reviewing the financial position and performance of two companies for a large institutional investor, who is considering investing in one of two companies. The two companies that I will be reviewing are Halfords plc, they both operate in the retail industry; and The Unite group plc, also provides purpose built student accommodation.
Before I go into the financial positions of both companies here is a little background on both Halfords and unite group plc. The Halfords brand was found in 1902 and Halfords plc is now one of UK’s leading retailer of motoring and cycling products and it also operates one of the leading independent garage servicing and auto repair. Halfords operates through two reportable segments retail and auto centres and 85% of its revenue was is derived from the retail division. Unite group plc was founded in 1991 and it …show more content…

If the company has a higher leverage it means the company is too risky although this tends to turn investors away however this can be changed and managed. The gearing ratio is significant to a company and the potential investors. Furthermore it is essential to plan as it affects the company’s ability to maintain a consistent dividend policy during intricate operating periods. Moreover, the gearing ratio reveals the suitability of capitalization of a company. In the year 2015 Halfords had a gearing percentage of 21.54% and 2016 a gearing of 15.89% this is good because not only did the risk decrease the following its due to decrease over the following years if they plan circumspectly . And after looking at their competitors for example b and q that have a higher gearing I can happily say they are a good investment, lower risks means more profits and

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