Analysis of a Public Listed Company's Financial Performance

Brief History of the Company

Students are required to choose a public listed company whose shares are traded on a stock exchange (preferably the

London Stock Exchange). Download its most recent annual report(s) covering financial statements for the past 5 years, and produce a report, no more than 5,000 words which includes an analysis of the chosen company.

Your reports are expected to cover the following areas:

Part a)

A brief history of the chosen company including its business model, market place and major competitor(s), as well as a review of major recent events over the past five years (e.g. change of directors, profit warning, legal issue, M&A, or any strategic changes).

Part b)

A critical review of the company’s financial performances including

• Calculation of key financial ratios for the past 5 years (e.g. profitability, liquidity, gearing, efficiency ratios)
• Critical evaluation of the ratios calculated
• Comparison to major competitor(s) and/or sector average if possible
• Any recommendation on how to improve the financial management of the company

(As a guidance, the calculation of ratios contributes to 10 marks, 40 marks to ratio analysis with comparisons to competitors and remaining 10% to future recommendations.)

Part c)

Carry out investment appraisal techniques to evaluate the following two projects: Assume that the company you chose in part a) has been researching the prospects for a range of new investment opportunities. The cash flow details of two promising projects (which are mutually exclusive) are given below: Year Projected Cash Flows (£m)

Assume that the company’s cost of capital is currently at 10.25 per cent.

Assume that all cash flows arise at year ends and straight-line depreciation is used over the life of the project with zero scrap value. Ignore taxation and inflation.

1. Calculate the Payback Period (PBP), Accounting Rate of Return (ARR) and the Net Present Value (NPV) of the project. Evaluate the results of these calculations and recommend with reasons which project should be adopted.
2. Critically discuss the advantages and shortcomings of the PBP, ARR and NPV techniques as ways of evaluating capital projects, please use relevant literature (with proper referencing) to support your discussion. Please also address the non-financial factors that need to be considered.

Each student is also expected to make a 20-min presentation of their reports at the end of the term (usually in week 10, time to be confirmed), and feedback to the presentation can then be incorporated in the final submission. Although the presentation carries no weightings to the final module grades, it is a great exercise to have students build confidence and communication skills that they will need in their future careers.

Please note the following when completing your written assignment:

1. Writing: Written in English in an appropriate business/academic style
2. Focus: Focus only on the tasks set in the assignment.
3. Document format: In business report format or any other suitable format appropriate to the context. The total word count should be equivalent to a total word count of 5000 words. Ensure a clear title, course, and name or ID number is on a cover sheet and a reference list using Harvard referencing throughout is also provided.
4. Research: Research should use reliable and relevant sources of information e.g. academic books and journals that have been peer reviewed. The research should be extensive.
5. References and Turnitin

Additionally, you should refer to text books, current news items and benchmark your organisation against other organisations to ensure your assignment is current and up-to-date. High-level referencing skills using the HarvardMethod must be demonstrated throughout your work and all sources listed alphabetically.

Good referencing is a powerful way to reinforce the arguments you make in your writing. The point of referencing is that you can justify the points you write about and make it easy for the reader to find the things that you cite.

You must submit your work electronically via the Turnitin link on the university virtual learning platform (moodle) on or before the deadline set by the assessment team.

Turnitin is a software program that compares a submitted text to other texts in its database. The database includes  published books, journal articles, webpages and other submitted assignments. It checks the originality of the submitted text against these texts and produces a report that shows the percentage of writing that is original, and the source of nonoriginal text. Although Turnitin has been described as a plagiarism detector, it is actually an originality checker. So a piece of work submitted to Turnitin may have a high percentage of writing that is not original, but this may include a lot of common phrases or acknowledged quotes. It is therefore important to follow referencing guidance throughout the coursework.

In accordance with the Framework for Higher Education Qualifications, at the end of Level 7 students should be able to demonstrate: a systematicunderstanding of knowledge, and a critical awareness of current problems and/or new insights, much of which is at, or informed by, the forefront of their academic discipline or area of professional practice; a comprehensive understanding of techniques applicable to their own research or advanced scholarship; originality in the application of knowledge, together with a practical understanding of how established techniques of research and enquiry are used to create and interpret knowledge in the discipline; conceptual understanding that enables the student to evaluate critically current research and  advanced scholarship in the discipline to evaluate methodologies and develop critiques of them and, where appropriate, to propose new hypotheses.