Page 6 - Patisserie Valerie Teaching Note
P. 6
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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. For Patisserie Holdings gearing would
seem to indicate that management are in a financially
strong position certainly capable for sustaining future
growth.
However, by the 11 October 2018, the company was
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insolvent and requiring a cash injection on to keep going. In
addition, the cash and assets shown in the accounts were
fictitious.