Assess the financial performance of William Hill over the last 4 years Essay

Assess the financial performance of William Hill over the last 4 years and discuss how focussing accounting can assist a service providing business like William Hill - Essay Exampleo treasure the financial performance of William Hills is its profitability assessment over the last four years and the satisfaction of investors in terms of pitchs on their investments. The tool of ratio compendium is used for assessing such financial performances of William Hills. In order to assess the profitability the ratios that are considered for the four year performance are operating margin, net margin, return on total assets (ROA), and return on common equity (ROE).Let us start with operating profits. Operating profit margin measures the percentage of distributively sales dollar remaining after all costs and expenses other than interest, taxes, and preferred stock dividend are deducted. It represents the pure profits earned on for each one sales dollar. Operating profits are pure because the y measure the profits earned on operations and ignore interest, taxes, and preferred stock dividends.(Lawrence J Gitman, knave 67)i The assessment of operating margin ratios of William Hills suggests that profitability performance is sliding lot since 2006. The operating profit margin was 32.68% in 2006, 30.7% in 2007, 28.91% in 2008, and then down to 25.31% in 2009. One of the reasons for this sliding performance is poor response to newly introduced online gambling business. In fact the online business of William Hills has tarnished the groups reputation for management excellence by mismanaging the online sports book technology project.(Betting Market, Viewed on 19th May 2009)iiThe analysis of profitability on basis of net profit margin is similarly very interesting because the net profit margin is indicative of managements ability to operate the business with sufficient success not only when to recover from revenues of the period, the cost of merchandise or services, the expen se of operating the business (including depreciation) and the cost of borrowed funds, but also to leave a margin of reasonable fee to the owners for providing their capital at risk. The ratio