Inge Larsen is the principal shareholder in Larsen Locations Limited. Her company provides services to businesses that are in the process of moving from one location to another. Inge and her staff plan the moves in detail, ensuring that all arrangements are made and that the move goes smoothly. Lately, the company has itself moved into larger premises and has taken on more staff.

Tom Wilton runs The Wilton Group plc, of which he is the major shareholder; the company’s principal activity is similar to Larsen’s. He is considering making an offer to Inge to buy the business from her so that he can consolidate Wilton’s position as the market leader in the region. He does not want Inge Larsen to know anything about his possible interest in her company until he has completed some basic financial analysis.

Tom obtains Larsen’s company accounts for the last 3 years from Complies House Some of the extracted income statement information is summarized in the following table:

Over the period 2009 to 2012 The Wilton Group pic has experienced steady growth in revenue, administrative expenses and operating profits of 2-3% per year.

Required: analyze Larsen’s revenue, administrative expenses and operating profits horizontally, reporting briefly on how the trends in these items compare with those of The Wilton Group plc.

 

2012 2011 2010 2009 Sales of services 3 709 480 3 690 900 3 502 404 3 497 983 1 446 437 1 204 448 Administrative expenses Operating profit 1 109 932 795 046 1 100 555 756 734 841 525 787 046