FINANCIAL STATEMENT ANALYSIS AND VALUATION
M 17 EFA

INTERPRETATION OF PUBLISHED ACCOUNTS

I. Introduction

After financial crisis in 2008, economic seems starting to recovery. Many companies have gone bankrupted, but energy companies seem doing very well in the down turn. One of most important part in the financial management is how to finance a business. It is also the reason why the financial statement analysis and valuation takes a vital part of a report for investors.

Centrica Energy Company and Scottish and Southern Energy (SSE) are two renounced companies in the UK energy industry. Their main products are such as: supplying energy to home and to business, providing home and energy services, generating electricity and producing gas, buying, storing and selling energy international. However, Centrica is bigger than Scottish and Southern Energy in term of size and capital investment. The main market of Scottish and Southern Energy is in United Kingdom, which account for 99% of its revenue. However, Centrica Energy’s market share is more diversified with its presence in United Kingdom, Norway, Nigeria and Trinidad, specially, North America, assets and trading operations in Europe, where they knows as Direct Energy.

According to financial report in 2009, SSE concentrate more in renewable energy which could make companies facing the rise in cost of producing energy, while Centrica focus more about expansion, replacement of aging power stations and nuclear power. It would make Centrica more clear and easy-understandable in its strategic with really clear direction. II. Horizontal analysis, Vertical analysis and Ratios analysis
Horizontal analysis shows the compare of two year data demonstrate the changes in performance of a business in form of percentage.

Look at the balance sheet and income statement of Centrica, the revenue in general grew from 2005 to 2009 with considerable growth rate in 2008 with