Task:
Scenario:
You hold the position of manager in your company. As a manager you have sound industry knowledge and commercial awareness. As part of your career development you have requested to be involved in a financial project to expand your managerial skills. You have volunteered to analyse the financial performance of the three companies identified in this case study over a period of 3 financial years (using the published financial data in the PDF file included with this case study). The companies have listings on the London Stock Exchange. You are required to undertake independent research to review current annual company reports, market reports and academic literature to support your findings in your report.
1a. Using the company websites, specifically the Investor’s area, and the annual “Chief Executive’s Strategic Review” identify the Strategic Plans for each company including the main financial goals and measurable success indicators in relation to financial growth, financial sustainability and financial performance. Having identified the key goals, explain the nature of the decisions i.e. long term or short term, and justify how these decisions will achieve the financial goals e.g. new investments, new products / services, increasing market share, restructuring etc. Clearly demonstrate how these decisions have impacted on the financial performance of the companies (use of evidence from ratio analysis will be required to support content).
1b. Critically evaluate the performance of the three companies using the latest three years financial and non-financial data to reach a conclusion to clearly identify the ranking of performance i.e. 1st, 2nd and 3rd. To reach a conclusion on the performance of the companies you are required to select and analyse 10 appropriate financial ratios, ensuring the you cover all the categories of ratio, and 2 non-financial ratios to look in depth at each ratio result / finding, use supporting arguments and evidence for and against as well as how these findings interrelate to one another. Demonstrate your understanding of the findings by interpreting the performance and financial position of the three companies by commenting on any significant patterns and causal relationships. Use of charts and tables is expected in your supporting argument. It is essential to establish the key facts and important issues surrounding the industry, selected companies and literature, you are therefore required to look at the audited financial statements and carry out further research to explain the performance of the companies over the three years.
1c. Using information and results from tasks 1 and 2 above, put forward a short case justifying the reasons why the best performing company (using the ranking result from task 2) would/ would not be a positive investment opportunity. In order to present a balanced argument, consider opinions which may run contrary to your own before stating your conclusion.
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