Financial Analysis of a UK Listed PLC and its Competitor

MBA 610 Accounting And Financing Decisions

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Task

Learning Outcomes

1. Understand the fundamental concepts underlying financial accounting statements

2. Appraise the performance of a range of organisations using appropriate accounting ratios and the usefulness of financial accounting information for a range of stakeholders.

Assignment Description

Introduction

Task - Analysis of financial accounts

You must choose a UK listed PLC from the FTSE – 100 List. You must also find a suitable competitor company (preferably of similar size) to enable valid comparisons of performance to be made. I choose HSBC as my company and to compare it with a competitor bank which is slandered chartered.

Required:

•A brief introduction to the company, the nature of its business and a brief overview of its financial performance and position over the past five years. [20%]

•Compare the financial performance of your company and a suitable competitor using a minimum of 10 ratios over the last 2 financial years. Your analysis should cover profitability, liquidity, efficiency and capital structure ratios. [35%]

•Comment on the business from an investor’s point of view in terms of movements in share price and investor ratios and compare your business to the Stock Market performance over the past year. [25%]

•Review any changes in accounting policies impacting on the performance of your chosen company and the comparative company. [10%]

•Consider the limitations of your analysis and any reservations that you may have about the analysis that you have provided. [10%]

Guidance

You are advised to keep records of share price movements and keep abreast of business news about your company to explain any impact on capital and financial markets and perceived performance of your company.

You should make use of tables & graphs to present complex information and ensure that the report is written in a professional way. Remember that your report needs to critically address the issue of whether the business is a worthwhile investment rather than simply describing the ratios and financial data.

Any calculation of ratios or supplementary data can be included in an appendix to your work. Work in an appendix does not count towards the word count limit.

Your analysis should cover the limitations of ratio analysis.

Additional Information

Report format:

•Executive Summary

•Contents page

•Introduction

•Main body (with section headings)

•Conclusion & Recommendations

•Appendices

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