VERTICAL ANALYSIS OF STATEMENT OF PROFIT OR LOSS AND NET ASSSETS

Appraisal of Nationwide Plc’s Operation:

The Nigerian region contributed significantly to the group’s performance across various business lines.

Income Statement: The Nigerian region contributed 97.52% of the entire revenue of the group, with interest and similar expenses amounting to 30.31% of the group’s total revenue, 99.11% of which originated from Nigeria. This left an operating income representing 69.69% of the group’s revenue.

The operating expenses and net impairment collectively exceeded the operating income, with Nigeria being the primary contributor to these figures.

Assets and Liabilities: Liabilities accounted for 81.14% of the group’s assets. Nigeria contributed 88.78% of the group’s assets and held 88.12% of the group’s total liabilities.

This overall analysis demonstrates that the major activities of the group are concentrated in Nigeria, evidenced by the high percentages of revenue and assets contributed by the Nigerian region. This heavy concentration may expose the group to concentration risk.

Tutorial Note:

Vertical analysis is the proportional analysis of a financial statement, where each line item is listed as a percentage of another item within a single period. Vertical analysis between segments involves comparing each segment’s figures against the group total, expressing each segment’s contribution as a proportion of the total.