FT Guide to Using and Interpreting Company Accounts, 4th Edition

13

IMI

Introduction

I’m now going to analyse IMI’s performance over the last four years. Normally I prefer to analyse companies over five years, but I’ve shortened the analysis period as IMI’s business changed in 2005 when it sold its building products business, Polypipe, in September. This was a material disposal, as it comprised 15% of the group’s revenue and 11% of its operating profit in 2005. Although the income statement was analysed between continuing and discontinued operations on a line by line basis for 2005 and 2004, only the total operating and investing cash flows were disclosed making it impossible to adjust all the other financial statements.

Starting the analysis

I always start a financial analysis in the same way, by ...