Acting as a financial advisor for a potential investor who is considering the purchase of shares in the company in question generate a Report evalua

ASSIGNMENT (3000 words)

Acting as a financial advisor for a potential investor who is considering the purchase of shares in the company in question generate a Report evaluating the financial performance and position of two companies as evidenced by their most recently published annual accounts. The investor is looking for both income and capital growth and has a modest sum to invest in the Main company (Company A).

You are required to select two major non-financial quoted companies which will be Main Company (Company A) and comparator company (Company B) from either of the below mentioned exchanges.

FTSE350 Index https://www.londonstockexchange.com/indices/ftse-350/constituents/tableSingapore exchange https://www.sgx.comHong Kong exchange https://www.hkex.com.hk/?sc_lang=enChoose 2 companies and mention them as main company and an appropriate comparator company. Both the companies must be listed in any of the above-mentioned exchanges. Please specify which exchange they are listed and if available then include the date / year of listing in the exchange.

Both companies should be in the same industry group, of similar size and should be working in the same market for which you will research, analyse, and evaluate their consolidated financial results.

Having chosen valid subject companies, you are then free to use any source you wish to obtain hard or electronic copies of said companys annual report. You are also advised to visit companies websites that may be valuable sources of background information. Annual reports for the current year, and often for prior years too, are usually available to view and download within the website area entitled investors, investor relations or about our company.

Report should include a comparison of the companys most recently published annual report with that of its five previous years (so basically 1 + 5 years = 6 years of financials data).

Report should also compare your Main companys position and performance with that of comparator company, over the same period.

The social-ethical investing (i.e., critical evaluation of Corporate Social Responsibility (CSR) disclosures in corporate communications, e.g., annual reports, Web sites, social media) should also be considered.

REPORT

(ASSIGNMENT STRUCTURE BREAKDOWN)

ABSTRACT

PART 1 - INTRODUCTION

Brief History

Description of Industry Membership, Main Business and Principal Locations;Any Exceptional Recent Events that Could Impact on the Consolidated Financial Statements;Discussion of Competitive Environment;General discussion , PESTEL, 5 Forces [inspiration] )

Brief Financial Information a Five-year Financial Review (e.g. Total Assets, Sales Turnover, Number of Employees, Capital Structure, etc.). Graphs [5 year revenue] , tables

PART 2 EVALUATION OF FINANCIAL STATEMENTS COMPARATIVE ANALYSIS

Cover the 5 categories but be selective on what ratios within each category to use.

Profitability (gross profit margin, net profit margin, return on equity ..)

Liquidity (short-term)

Gearing (long-term solvency)

Efficiency

Investor

2.1 PROFITABILITY ANALYSIS

2.1.1 Net profit margin

Insert table

Insert Graphs

Insert Commentary, for example as below:

Trend => Apple is increasing its margin. Samsung is decreasing in marginWhy => Apple is in earpods, watches. Samsung is in lower priced goods.

So what -> Apple is superior and its strategy is working.

2.2 LIQUIDITY RATIOS

Insert table

Insert Graphs

Insert Commentary / your analysis from the table and graph, for example as below:

Trend =>

Why =>

So what ->

2.3 EFFICIENCY RATIOS

Insert table

Insert Graphs

Insert Commentary / your analysis from the table and graph, for example as below:

Trend =>

Why =>

So what ->

2.4 SOLVENCY / GEARING RATIOS

Insert table

Insert Graphs

Insert Commentary / your analysis from the table and graph, for example as below:

Trend =>

Why =>

So what ->

2.5 STOCK MARKET (INVESTMENT)

PE Ratio

Dividend Yield

Insert Commentary / your analysis.

2.6 REVENUE GROWTH (YEAR AFTER YEAR) HORIZONTAL ANALYSIS

REMINDER:

Please look for INSIGHTS. Do not just describe the numbers (up, down)

Use a recognised database to access ratios for the current year and previous years and competitor companies.

While databases, such as Bloomberg, Financial Analysis Made Easy (FAME), supply a large amount of ratio analysis you may find it more helpful to undertake your analysis as sometimes databases adjust the information presented in the published accounts so that it will fit their standard format.

When using databases, you should acknowledge the potential discrepancies as a limitation within your report. This does not detract from the quality of your submission. It allows you to demonstrate familiarity with a relevant database and may save you time regarding accessing and analysing annual reports yourself.

The aim of the assignment is to report on the financial position, performance, and prospects of quoted companies. The analysis should try and give insights as to what is happening and not be merely descriptive (why? So what? Is it temporary, is it permanent). To do this, you may need to try and relate the information contained in the accounts to other external information.

PART 3 CONCLUSIONS

3.1 Overview of Performance;

For example [ is Apple doing well or not?]

3.2 Implications for Potential Investment;

For example [should I invest in Apple or not?]

3.3 Credit Assessment;

For example [is Apple stable in its finances or not?]

3.4 Limitations of the Analysis, Ratios and Financial Statements

(e.g. the potential problems associated with using ratio analysis to analyse the financial health and performance of companies, balance sheet figures are single-point values, similar companies for comparison are hard to find, accounting policies may differ between companies, inflation and creative accounting or earnings management practices may distort accounting information, etc.);

[GOOGLE - Limitations of Financial Statement Analysis]

3.5 Recommendations to an Identified User of Accounting Information.

=> Decision: Invest or Abstain or Short /Sell

Important Guidance

Use Yahoo Finance or Google Finance to get the latest news, international market data, etc.

Within your word limit, you do not have a lot of room for long introductions to the company and so on. Consequently, you can assume you are reporting to a sophisticated individual who has a good knowledge of accounting practices and the operation of the stock market.

Please note that while you are expected to make use of the full annual report to support your analysis, you are required to demonstrate your analytical skills. You must NOT simply reproduce parts of the company report.

Referencing

APA style reference and all the links provided should be easily accessible

Provide in text reference.

Even when the candidate has placed a reference, the content should still be written in your own words. Copy and paste sentences will be flagged up by the system and potentially be heavily penalized.

References should go beyond the annual reports so that independent sources of information are injected within the report. Use independent references which means outside of the company. Do not use company annual report or company website talking about itself. For example: Nvidia talking about semi-conductor industry growth, it should be third party such as KPMG who are not in same industry providing such information.

If you do make use of text, charts, tables or any other material published in the annual report, please ensure that you acknowledge it, as failure to do so would constitute plagiarism.

Bank and Investment Houses will assign analyst to study them. Share the Analyst Reports.