Global Edition

 

Secrets of Prosperous Companies Revealed

12.10am 5th June 2007 - Management Topics

A new league table from leading financial analysts Plimsoll Publishing aims to provide an answer to that age-old question in the Golf Equipment market: Why do some companies fail and others prosper?

The Plimsoll analysis looks at the financial strength of each company based on four years’ figures. This shows that one in three UK Golf Equipment companies is currently at risk of failure, while one in four is doing well.

The equation is not as simple as strong sales equals survival. Nor is the success rate of a firm automatically affected by market conditions. Instead, it depends on the ingredients in a finely-balanced recipe that includes good margins, low borrowing, responsible management and foresight.

Plimsoll’s new analysis of the market weighs all these ingredients and turns them into a unique one-page snapshot of each company’s prospects. From that, it establishes a league table based on 138 leading firms that looks like this:

  • 38 companies are in a strong position, with a pre-tax margin of 12%
  • 14 are in the good sector, on 3% margins
  • 12 are rated as mediocre, on 2%
  • 19 are in the “caution” category, with minus -1% margins
  • An alarming 55 are in the “danger” range, on minus 11%.

Nearly nine out of ten UK companies currently in receivership were rated in the lowest two categories by Plimsoll in the two years before their demise. Its senior analyst David Pattison says, “34 of the 38 companies in the strong section are there for the second year running, proving that if you have a solid business where management is in control, you can maintain success irrespective of market conditions. The most successful firms are also largely free of debt.

“At the other end of the scale, there is no doubt in my mind that if the pundits are right and the UK market tightens towards the end of the year, then the 55 companies in the danger category will take the brunt of the downturn.

“All is not lost for those firms that find themselves at the lower end of the table. But the management needs to accept that the business has a problem and take action today, rather than next week or the week after.”

The Plimsoll analysis is aimed at busy managers who need to understand their own place in the market, as well as the likely future performance of their competitors, customers or suppliers.

Plimsoll, based in Stockton-on-Tees, is one of the leading business analysts in the UK, France and Japan. It has 16,000 customers worldwide who rely on its reports to take crucial commercial decisions.

Copies of the analysis – at a Golf Business News.com reader discount of 20%- can be obtained by calling Clair Sherwood on 01642 626422, by emailing enquiries@plimsoll.co.uk, or by visiting www.plimsoll.co.uk. Please quote discount code PR05.

       

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