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Invensys Plc Financial Statements Analysis

Autor:   •  November 28, 2012  •  Case Study  •  280 Words (2 Pages)  •  1,034 Views

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Summary

The report aims to analyse the performance of the Invensys Plc. focuses on the financial statements analysis, value oriented ratios and equity valuation. Invensys have strong growth prospects in its core markets due to the long-term structure growth .The significant components in Invensys’ financial statements are pension liabilities and negative net debt, which are consistent with characteristic of human intensive industries. Invensys has high positive Return on equity (ROE) and negative financial leverage (FLVE). Significant pension liabilities and benefits from investments in Research and Development, restructuring programme mainly influence high ROE. Free cash flow valuation and Abnormal operating profit model are applied to work out Invensys’ equity valuation and reveal that Invensys’ share price is currently overvalued hence selling share is recommended

I- Invensys Plc: Business Description

II- SWOT Overview

Strengths

Invensys operates through three business segments, each division offers wide range of products and operated in completely different market thereby Invensys are able to diversify product offering, eliminate the unsystematic risks.Moreover, Invensys operate across different industries in more than 60 countries worldwide that represent a diversified geographic presence.

Weaknesses

Invensys was perceived to have a sluggish performance in its key business and geographic segments. In FY2010, IOM’s sales declined 8.5%, IC’s sales shrink 2.2% compared to FY2009. In addition, Invensys

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