LW is a utility services provider for residential and commercial properties. The business, which used to be nationalized, has now been privatized. Annual data for the company is provided below for the first three years after privatization. Also shown, for comparison, is the proforma data for the last year prior to the company being privatized, such that the data is comparable to the period after privatization.

The activities of privatized utility companies are scrutinized by the industry regulatory body, which restricts the extent to which prices can be increased.

The demand for the utilities provided by the company has increased by 4% per annum, in line with the demographic trends.

Key financial and operating data is shown below. 20X1 is proforma, 20X2 to 20X4 is actual (£m):

20X1 20X2 20X3 20X4

Turnover 240 250 300 350

Net profit 15 21 36 47

Taxation 3 5 8 10

Capital expenditure 15 28 43 58

Wage bill 70 65 62 59

Directors’ remuneration 0.5 1.2 2.2 2.8

Employee numbers 7,000 6,800 6,300 5,800

Retail Price Index (RPI) 100 102 105 108

You are required to:

Using the data provided, assess and analyze the extent to which NE has met the interests of the following groups of stakeholders in its first three years after privatization:

a). Shareholders. 

b). Consumers. 

c). Workforce. 

d). Government, including regulatory agencies. 

Answer rating: 100% (QA)

Shareholders The Net Income Percentage Net Profit Turnover X 100 20X1 15 240 X 100 625 20X2 21 250 X 100 840 20X3 36 300 X 100 12 20X4 47 350 X 100 1343 Answer It is seen from the above that the Profo... View the full answer