Reference no: EM132556236
Case study
This is an individual element. (Note: this contributes to the 25% of the weightage to the portfolio)
Scenario
British Sky Broadcasting Company plc is a British satellite television broadcasting company that also supplies telephone and broadband services throughout the UK and Ireland. BSkyB is the market leader for pay-for-TV services in the UK.
The company reported a slight fall in it annual profits in July 2014 despite a 5.5 per cent growth in its revenue. The company also announced that it was increasing its dividends by 7 per cent and would be paying 32 pence per share to its shareholders. The company commented that it was on target to meet its objectives and had achieved a 33 per cent growth in customer numbers during the year.
Item 2014 £m 2013 £m
Revenue 7,632 7,235
Cost of sales (direct costs) 4,616 4,329
Gross profit 3,016 2,906
Operating Profit 1,275 1,330
Profit for the year 865 979
Question: 1. Calculate BSkyB plc
(i) Gross profit margin
(ii) Operating profit margin
(iii) Profit for the year
Question: 2. To what extent do you think that BSkyB plc''s shareholders will be satisfied with the company''s financial performance during 2013 and 2014.
Question: 3. What are various options you may suggest to BSkyB plc to improve profits further within a financial point of view.
1000 words