Financial Analysis of London Stock Exchange Listed Companies

This assignment assesses the following learning outcomes:

1. Demonstrate a conceptual and critical understanding of International Accounting Standards and its implications on corporate reporting (learning outcome K1)
2. Apply the techniques of financial analysis to real-world company financial scenarios (learning outcome K2)
3. Analyse corporate financial performance taking an independent approach and using relevant data (learning outcome A1)
4. Communicate complex financial information appropriately in writing using academic conventions (learning outcome A1)

You are the financial analyst at Pioneer Capital Company. The directors of Pioneer Capital ask you to identify three potential investment opportunities.

(a) Identify three listed companies on the London Stock Exchange (LSE) and critically evaluate their financial performance and position for the last five years (you should use the group (Consolidated) financial statements of the company). Prepare your answer in a report form for Pioneer Capital directors. Relevant ratios should be included where appropriate.

(b) Using your analysis in part (a), identify and briefly discuss your investment recommendation.

(c) Using your analysis in part (a), critically discuss the limitations of financial reporting and analysis. In your discussions, you should refer to accounting standards and give specific examples from the accounting policy notes, financial statements and notes to the accounts etc. of your chosen companies.

Assignment main questions mentioned in Assignment brief document and One Example document given by tutor for ease of making report.

5-6 financial ratios should be calculated and present in report, which are relevant of that particular industry.

1) All 3 companies should be public limited

2) All 3 companies should be listed on London Stock Exchange

3) you should use the group (Consolidated) financial statements of the company)

4) All figures should be in same currency , for example either all 3 companies figures in GBP or in USD

5) The selected three listed companies must be from the same industry for comparison purposes.

6) You should use the latest available annual reports for the company for last 5 years and all companies should have same closing month.

7) Include all 3 chosen companies’ statement of profit or loss and other comprehensive income, statement of financial position, statement of changes in equity and statement of cash flows for the relevant years in the appendix to the report.

8) Ratios required for part (a) must be calculated and not extracted from external databases.

9) All calculations of ratios and other financial data must clearly be shown in the appendices for all 3 companies.

10) Pay close attention to the Assessment Criteria (specific and generic) at the end of this document

It is essential that you provide a reference list, of all sources and relevant readings at the end of your submission, including websites.

• Avoid mere description of the content of material referred to – critical evaluation is required where specified.
• Read widely from textbooks, journals and authoritative financial press commentaries in forming your views.
• Pay close attention to the Assessment Criteria (specific and generic) at the end of this document – this lists the specific criteria to the requirements of this assignment. These specific criteria will be used to provide feedback on your marked assignment.
• Use the APA 6th referencing guide – badly referenced material will lose you marks.
• Do not exceed the word limit (2,500 words) (excluding references and appendices).