Introduction
The primary goal of this section is to evaluate the financial performance of McCain Foods as a multinational company. In this instance, comparing its financial indicators and aspects with one of its major competitors, ConAgra, will help identify the areas of improvement. Selecting ConAgra is reasonable, as it has financial superiority in comparison to JR Simplot with $5,800,00 million and Larsen Farms with $799,23 million in gross revenues (ConAgra Foods: Sec fillings, 2016). At the same time, this company has a leading position in the market, and monitoring its performance can identify a direction for improvement and the desired financial outcomes.
Comparison: ConAgra and McCain Foods
One of the major aspects of comparison is gross revenue, and it is used to present the actual amount of financial resources acquired from sales without taking into account taxation (Hussey, 2014). In this case, ConAgra had gross revenue of $11,642,90 million and net operating cash flow of $1,207,40 in 2015 (ConAgra Foods: Sec fillings, 2016). Thus, JR Simplot and Larsen Farms had $5,80 and 799,23 million respectively (ConAgra Foods: Sec fillings, 2016).
As for McCain Foods, this company occupies the second position and has a significant market share with $6,00 billion in annual sales (ConAgra Foods: Sec fillings, 2016). In this case, McCain Foods’ revenues solely in the UK were $424,700,000 in 2015 and $428,753,000 in 2014 (McCain Foods Limited: Annual report, 2015).
In turn, ConAgra’s net profit margin was 5.76% in 2015 (ConAgra Foods: Sec fillings, 2016). On the contrary, McCain Foods had an operating profit of 13.2% in 2015 and 12.1% in 2014 (McCain Foods Limited: Annual report, 2015). In this case, the company also experienced a growth of 1.1% while comparing the results of two years. It could be said that McCain Foods moves towards the right direction, but continuous improvement is required.
Other matters that have to be compared are various indicators regarding the employees. For instance, ConAgra had 32,900 employees in 2015 (ConAgra Foods: Sec fillings, 2016). As for McCain Foods, the overall number of employees, who are engaged in manufacturing, distributing, and administrative activities, is lower. Furthermore, it decreased from 1,390 (2014) to 1,373 (2015) due to the structural changes in the company and unfavorable financial conditions (McCain Foods Limited: Annual report, 2015). Nonetheless, despite the reduction, there was a significant shift in employee retention rate with 98.8% (McCain Foods Limited: Annual report, 2015).
This change signifies that the company’s organizational structure offers exceptional working conditions, and it has a clear reflection on the company’s revenue. Thus, using fewer employees helps increase the quality of the delivered products and minimize production costs (Hussey, 2014).
Lastly, one cannot underestimate the role of the market capitalization in the company’s operations. In this case, ConAgra had $19,84 billion in capital markets in 2015 (ConAgra Foods: Sec fillings, 2016). As for McCain Foods, the company had 120,000 normal shares of $1.27 and 2,000,000 of redeemable preference shares of $1.27 (McCain Foods Limited: Annual report, 2015). In this case, these results show that ConAgra has a higher coverage of the capital market, and it vehemently pertains to the high recognition of the company in the world and its reputation.
Conclusion
Overall, it could be said that this comparison helps understand that a gap in financial performance between McCain Foods and ConAgra tends to exist. ConAgra’s recognition and extended years of operation allowed the company to have a superior performance in capital markets and high gross profits and be one of the leaders in the industry. This analysis reveals that McCain Foods tends to face difficulties in sales. Nonetheless, it moves in the right direction, and it helps the firm remain competitive in the market.
References
ConAgra Foods: Sec fillings. (2016). Web.
Hussey, R. (2014). MBA Accounting. London, UK: Palgrave MacMillan.
McCain Foods Limited: Annual report. (2015). Web.