Paddy Power operate in the United Kingdom and Ireland where it is the largest and most popular betting brand. It is use apps which consumers can understand combined with retail betting shops which is known for entertaining customers. On the other hand, Betfair is an international online sports betting and gaming which controlled the betting exchange in 2000. Betfair is well known because of its innovation, partnership and value which it delivers to its consumers.
The Merger of Paddy Power and Betfair was completed on 2nd Feb, 2016. It was recorded as an acquisition of Betfair by Paddy Power on that acquisition date. The reported statutory comparative results for the year ended 31st Dec 2016 was done in accordance with Generally Accepted Accounting principles GAAP. The report will analyze key financial results three years before the acquisition and at the acquisition and at the first reporting date post.
Return on Capital Employed
It is a profitability ratio which compares profitability across different companies, based on the capital they use. Return on Capital Employed is calculated by dividing the EBIT by the Average Capital Employed. IBIT is also operating income shows how much a company earns without considering interest and taxes. EBIT is the cost of goods sold and operating expenses from the sales revenues. It shows the amount of capital utilized in order to generate revenue. Capital Employed is the Total Assets from Current Liabilities.