Financial Management Analysis

Financial Management Analysis

Learning Outcomes:
• Use analytical techniques and appropriate electronic aids to assist in contemporary financial decision making,

• Analyse the impact of economic, legal and tax changes on the strategic and financial position of companies, appreciate the ethical issues of financial management within business organisations.
Assignment Brief:

1. Task 1: Selection of Companies
As a consultant, you have been asked to report upon the financial performance of any company from the following business sectors: General Retailers, Food & Drug Retailers, Oil & Gas Producers, Travel & Leisure and Tobacco. From their respective annual report or other suitable financial databases (such as Financial Analysis Made Easy-FAME; Morning Star; Osiris; etc.) obtain relevant financial information for your chosen companies for the last 5 years.

2. Task 2 : Extraction of ratios
From above financial platforms, extract the following financial ratios (or the necessary information or variables to calculate the ratios) for the company over a period of 5 years as follows:
• Profitability
• Liquidity
• Working capital management
• Capital structure
• Stock market performance

Task 3: Discussion of ratios
Evaluate and analyse the performance of the company using the ratios extracted over the period under consideration (use graphs of the ratios extracted to support your analysis). Recommend whether the company would be a good investment (with the necessary justification)
Task 4: Weaknesses of Ratios
Evaluate the main weaknesses associated with ratio analysis
Assessment Presentation Requirements:
The submission of your work assessment should be organised and clearly structured in a report format. Maximum word length allowed is 3000 words, excluding words in Charts & Tables and in the Appendices section of your assignment. Student is required to submit a typed-written document in Microsoft Word format with Times New Roman; Arial; Calibri of size 12’ for the body text and automatic table of contents for using the relevant headers. The line spacing 1.5. This assignment is worth 40% of the final assessment of the module.

Indicate the sources of information and literature review by including all the necessary citations and references adopting the Harvard Referencing System.

Please refer to the Student Handbook for information on plagiarism
Plagiarism involves taking someone else’s words, thoughts, ideas or essays from online essay banks and trying to pass them off as your own. It is a form of cheating which is taken very seriously.

Task 3: Recommended Report Writing (3000 words)
The contents may be as follows:

1. Introduction: [Max 200 words]
This should clearly set the purpose of the assignment; address the
methodology and source of information; the company chosen

2. Rationale for the choice of the Company [maximum 300 words]
Provide the necessary justification for choosing the company.
(Should be critical in nature).

3. Performance Analysis [1500 words]
This should be carried out using the ratios extracted for:
Working capital management
Capital structure
Stock market performance

Comparative Management commentaries; overall assessment and
viewpoint based on your own analysis; graphical analysis etc. Note that
the discussion should be supported with the relevant literature. It should
be critical in nature.

Summary of analysis: [to help provide relevant recommendations]
Provide a summary for the analysis carried out in the form of table with
comments within the table.

4. Limitations of the method used to perform the analysis: [500 words]
This may be cantered on the weaknesses associated with the use of
ratio analysis

5. Conclusions & Recommendation: [500 words]
Ensure your conclusions and recommendations are justified and supported
by facts. There should be a logical based on the evidence contained in the
main body of the report.

6. Reference List

7. Appendices

Marking Scheme

Criteria Marks What the examiners will assess
Introduction; the use of an appropriate financial platform and the justification for the choice of firms 10 Students should demonstrate an ability to discriminate between the necessary and un-necessary detail in the financial statements and then extract, through accessing the appropriate software, the financial statements of the required firms. Also provide an excellent rationale for the choice of firms

Use of financial ratios 25 Students need to be able to apply and manipulate ratios in the sector in the context of management decisions. Candidate should demonstrated a clear understanding of the core issues relating to the sector in the context of the ratios extracted

Evaluation & analysis of the performance of the firm selected 25 Students need to provide a clear demonstration, through application of the models, as to how the firm selected is performing. The implication of the behaviour of the ratios for both sector and firm should be given strict attention by candidate.

Justified recommendations 15 Students need to highlight adverse performance and advise on pragmatic corrective action that company management can take in the light of constrains that the sector may have.

Evaluation and /or analyse information from a range of academic, professional and business sources. This should include a discussion of the limitations of ratio analysis 15 Students need to provide a context for the above in the light of contemporary business practices and as reported in the financial pages. Discussion should be supported robustly with some relevant literature.

Presentation 10 The quality of the references; visuals; references and coherency of arguments

Total 100