This was presented at Universidad de Huelva in 2009 as a project for financial statement.

1. BRITISH LAND COMPANY By POPA ANGELA, NATHALIE SCHROLL, SZASZ ILIE and NICOLE MACHULA.

2. FINANCIAL ANALYSIS Financial analysis is a process by which the analyst, by means of transformations, graphic representations, ratios, and other calculations, forms an opinion from the financial statements and other complementary information, evaluating the liquidity, solvency and profitability of the company. This opinion usually takes the form of an analysis report.

5. LIQUIDITY: Cash Flow analysis The objective of the cash flow analysis is to state if the company can satisfy its short-term debts using its operating cash flow, net and its liquidity reserves. The ideal situation is when the company can pay its short-term debts using only the operating cash flow, but it is also good if they can pay the debts using the operating cash flow and the liquidity reserves.

6. LIQUIDITY: Cash Flow analysis 561 800 546 759 Current Liabilities (non-operating) 12.179 15.874 13.196 11.978 Liquidity Reserves -137 1.217 267 -358 Operating Cash Flow, Net 2008 2007 2006 2005

7. LIQUIDITY: Cash Flow analysis

8. LIQUIDITY: Operating Working Capital Analysis The operating working capital (excess of operating current assets over operating current liabilities) is a good measure to represent the capacity of the current assets related to the company’s operating activities to generate enough cash so as to satisfy the current liabilities related to the company’s operating activities. Generally, a positive OWC is good for the company because it means that the company is able to pay off its short-term liabilities.

9. LIQUIDITY: Operating Working Capital Analysis The operating working capital is positive for all the four years because either they don’t have, or they don’t report separately any operating current liabilities. For that reason we were unable to calculate the operating current ratio and the quick ratio.

11. SOLVENCY: Cash Flow analysis NET DEBT < 0 NET DEBT < 0 NET DEBT < 0 NET DEBT < 0 For each of the 4 years, the net debt is lower than 0, which means that liquidity reserves are bigger than the non-current liabilities. This means that the company can pay off its long-term debts using the liquidity reserves.

12. SOLVENCY: Cash Flow analysis

13. SOLVENCY: Cash Flow analysis >>> 1 >>> 1 >>> 1 >>> 1 Operating coverage indicates whether operating expenses can be covered by operating income or not. That is to say, the superiority of operating inflows over outflows. This ratio is expected to show values that are above the unit. In our case, the value is much bigger than the unit which means that our company has no problem of solvency.

14. SOLVENCY: Guarantee analysis The Guarantee ratio is greater than the unit, which means that the company, in a state of liquidation, could pay off the external capital it has been financed with. Debt ratio is the opposite of the previous one. It is interpreted as a measure of the debt taken on by the company to finance its assets. This ratio usually varies between 0.4 and 0.6, and its value must be compared to sector references. Our company is situated between the limits.

15. SOLVENCY: Guarantee analysis

16. PROFITABILITY Profitability measures how a company, after performing its basic activity of sales and services rendered, and paying all the production factors concerned, is able to generate a profit to be distributed among shareholders that can be compared to the total of resources invested in the activity, as a measure of the efficiency achieved.

18. PROFITABILITY: ROA The higher the ROA percentage, the better, because the company is earning more money on less investment. Comparing to Unibail Rodamco, our ROA ratios are lower, which means we are not as good as Unibail Rodamco at using our assets in order to generate money.

19. PROFITABILITY: ROA

20. PROFITABILITY: ROA Our company chose a differentiation strategy, based on quality – it seeks to sell exclusive products at a high price even though the number of units sold is low. Thus the profit margin is high but the turnover is low.

21. PROFITABILITY: ROA

22. PROFITABILITY: ROE Return on equity represents t he amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. Our ROE is much lower comparing it to the industry (4.52), but comparing it to our competitor Unibail Rodamco we have similar ratios, which means we can interpret it as a positive value.

23. PROFITABILITY: ROE

26. INVESTOR’S PERSPECTIVE

27. INVESTOR’S PERSPECTIVE Regarding the earnings per share from 2005 to 2007, British Land Company had a annual raise of its earnings. Considering the dividends per share, it has also rose from 8.91 in 2005 to 19.21 in 2008. From all this it can be seen that the company fulfills the obligations towards the investors by paying annual dividends even in 2008 when the earnings per share were zero.

28. INVESTOR’S PERSPECTIVE

30. INVESTOR’S PERSPECTIVE

31. INVESTOR’S PERSPECTIVE Market to book ratio: Is used to measure how much a corporation is worthy at present in comparison to the amount of money invested by the investors. It is commonly used by investors to look for a company that is believed to be undervalued. When the company’s market to book ratio is less than 1, it is said that the company is undervalued. 2005 2006 2007 2008 0.71 0.92 2.46 1.93 Market to book ratio

32. INVESTOR’S PERSPECTIVE

33. CONCLUSION Finally, the ratios show us a very good situated company in the real estate industry. Even if the company was affected by the financial crisis like the rest of the companies in the real estate industry, our personal opinion is that at this moment it is good to invest in the British Land Company because the share price is low at the moment but with very good chances to rise in the near future.

34. THE END Thank you for your attention!