Share Analysis of Thorntons Plc - 1988 Words

Part 2 The chocolate industry in UK Britain really is a nation of chocolate lovers. Among the whole world, UK has the seventh highest consumption of chocolate. A British eats an average 17.49lbs of chocolate per year (The World Atlas of Chocolate, 2011). Switzerland takes the top spot. In Britain, an estimated 660,900 tones of chocolate are eaten per year which is an average of 11kg per person. The UK chocolate industry is worth  £3.6billion and sales of chocolate just keep growing and growing. The chocolate industry is a fast growing industry in UK, and the competition among the main brands is getting more and fiercer. For the investors, it is important to know the market share and the share price information of a company. These†¦show more content†¦The P/E ratio is calculated by share price divided by earnings per share or market capitalization divided by earnings. It is a relative indicator of potential growth in profits. The P/E ratio of Thorntons PLC is calculated below. | |2011  £Ã¢â‚¬â„¢m |2010 £Ã¢â‚¬â„¢m |2009 £Ã¢â‚¬â„¢m |2008 £Ã¢â‚¬â„¢m |2007 £Ã¢â‚¬â„¢m | |Market capitalization |41.2 |55.7 |50.5 |77.9 |119.2 | |Profit attributable to |(0.253) |4.354 |3.605 |6.068 |5.296 | |equity shareholders | | | | | | |P/E ratio |(-162.8) |12.8 |14.0 |12.8 |22.5 | Table2.1 P/E ratio calculate Source: Thorntons PLC Annual Rrport and Accounts 2011 From the year 2008 to 2010, the P/E ratio is around 13 which mean the share will have paid for itself in 13 years. It really a long term for the investment to pay for itself. But in the year 2007, the ratio is too high that means most shares are hopelessly overpaid. Normally, an average P/E ratio is around 10. However, the ratio in the year 2011 is appeared to be negative 162.8!!! That is caused by the falling profit. 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