Page 6 - Patisserie Valerie Teaching Note

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Up until 10 October 2018, Patisserie Holdings gave every
sign that it was a profitable company making good profits

and expanding well. Its chairman, Luke Johnson trusted the

figures supplied to him by his Chief Financial Officer and

believed the auditor who gave the company a clean bill of

health. Moreover, any questions he did raise were

satisfactorily answered.

Financial Overview

Overview 30 September Year 1 Growth 3 Year CAGR 5 Year CAGR
2017

Turnover 114,197,000 GBP 9.66 14.2% -

EBITDA 25,636,000 GBP - 20.99% -

Post-tax Profit 16,364,000 GBP 19.14% 22.48% -

Total Assets 98,921,000 GBP 15.93% 17.05% -

Net Assets 92,332,000 GBP 18.08% 18.93% -

Gearing 7.14% - - -

A low gearing percentage typically shows a company is

financially stable. It refers to the relationship of long-term or

equity finance to short-term debt such as bank borrowings.

Gearing ratio = Debt

Total stockholders’ equity

The gearing ratio reflects the vulnerability of the company to

changes in interest rates and any reduction in cash flow. For

Patisserie Holdings gearing at 7.14% would seem to indicate