Choose FOUR categories from the list of five categories of financial ratios below and use ONE financial ratio from each category. Report on
Covid-19 had a significant impact on business in 2020 and 2021. Some businesses, such as supermarkets, did well but with additional costs. Many businesses have gone into liquidation. Restrictions due to covid are gradually being eased around the world, but we are now being hit by new problems. To help with planning going forward, we want you to consider the new challenges and how they may be overcome. With mass vaccinations gradually being rolled out across the world, your business is looking to develop a new product or service for the post Covid-19 world. The investment proposed is £50 million and should have a lifespan of ten years. You are to suggest a suitable project, and, using NPV and IRR appraisal methods, show how (if) the investment will benefit your company.
Required:
Suppose you are appointed as the CFO for ONE of the companies listed below.
Greggs plc:
The company’s principal activity is retailing sandwiches, savouries and other bakery related products with a particular focus on takeaway food and catering.
Halfords Group PLC:
The company’s principal activities are the retailing of automotive, leisure and cycling products from retail stores and car servicing and repair from Autocentres.
Hays PLC:
The company is a public listed recruitment group in the United Kingdom and a specialist recruitment and HR services company.
Nissan Motor Co Limited:
The company is a Japan based company mainly engaged in the manufacture and sale
of automobiles and parts, as well as the provision of sales financial services.
Stagecoach group plc:
The group’s principal activity is the sale and operation of passenger
transport.
Tesco PLC:
The principal activity of Tesco PLC is the operation of plus are born to visit
for the food stores and associated activities in the UK Republic of Ireland,
Hungary, Poland, Czech Republic, Slovakia, Thailand, South Korea, Taiwan and
Malaysia.
You are required to write a report to the senior management team, fully referenced, and addressing the following:
1. Evaluate financial
performance: Choose FOUR categories from the list of five categories of financial ratios below and use ONE financial ratio from each category. Report on which aspects of your chosen business have been most affected by recent events using the last 5-years’ financial information:
2. Efficiency
3. Liquidity
4. Financial gearing
5. Investment
Note: Analyse your chosen financial ratios using information
from financial statements. Considering word limit, please choose ONE
financial ratio from FOUR different categories listed above; therefore, you
should focus on four ratios in total in this part of analysis.
Critical analysis of the four ratios is required for a good
work. Discuss the problems and limitations of financial ratios as a tool of
financial analysis before making recommendations to the board of directors.
Create your own small tables, diagrams and charts in your analysis and present
professionally. Financial ratios can be collected using Osiris through
ARU library (https://anglia.libguides.com/az.php?a=o), annual reports or other
professional resources.
Comparison with competitors and industry will be helpful.
Suggested word count: 800 – 900 words.
2. Budgeting
Discuss the advantages and disadvantages of making a budget for
the next year. Do the results of the ratio analysis indicate any aspects
worthy of special consideration? Explain two different approaches to
drawing up a budget for the business. Critically evaluate how performance
management can use the budget to make better decisions. Suggested word
count: 750 – 800 words.
3. Investment appraisal:
You plan to use NPV and IRR techniques to evaluate an investment project for
your chosen business. Critically discuss NPV and IRR techniques and the
implications of the investment on the Company. Risk and uncertainty in
investment appraisal should be considered before you make your recommendation.
For this exercise use a discount rate of 10%. (Ignore inflation and
taxation). Discuss the best way to finance this project.
Note: Please present NPV and IRR results using small tables.
You need to make the decision on which investment appraisal format that
you will choose. The project will be based on your chosen company,
therefore, you have the flexibility to decide the project using your
ESTIMATE. The investment should be around £50m, but how the
money is invested would depend on the nature of the investment. Sensitivity
analysis will be helpful to analyse different scenarios for the appraisal.
Suggested word count: 650-750 words.
4. Appendix:
Supporting information to help the senior management team make
their final decision. Present your own tables and do NOT copy and paste annual
report in your appendix.
1.1.2 Assignment submission guidance
1. Please name
your assignment submission using your SID number.
2. You should attach
the Front Sheet before your own work, followed by title page
and content page before the main body of your work.
3. You should adhere to
the 3,000 word limitation. Any misuse of tables with aims to avoid word
limit will be subject to penalty. There is ±10% tolerance on word limit,
but in worse scenarios of deliberately using tables to avoid word limit could
lead to more penalty. There will be a 10% penalty if the assignment is too
short. Please indicate the word count on the Front Sheet.
4. Your Module Tutor is
available to support you in preparing your report. For on-campus students,
feedback sessions will be provided in seminar sessions. For DL students,
conference session times for you to live chat with your Module Tutor about the
assessment will be posted on the announcement page. As well, you are encouraged
to email your Module Tutor with any questions you have at any time. Please
also note that you are welcome to submit rough drafts of your work for comments
at any time up until the end of Week 11 (but earlier if
possible), while your tutor would be able to provide detailed feedback
on a single page summary of your work. Each student may receive a one-off
feedback using their preferred feedback channel.
5. The actual word
count excludes tables, charts, graphs, formulas, appendices and
reference list. In sum, the word count refers only to the narratives from
introduction to conclusion. Tables can be used to present numbers and some
brief points.
6. We treat assessment
offences seriously at ARU (more information is available at http://web.anglia.ac.uk/anet/academic/qad/module_guide/modguide_assessmentoffences.phpLinks to an external site.. All the resources
must be properly cited in your assignment. The formatting must follow Harvard
Referencing guideline (6th Edition) for both the construction of the reference
list and the proper in-text citation formats – pay attention to §3.1 in
particular. You can obtain the guide here: http://libweb.anglia.ac.uk/referencing/harvard.htmLinks to an external site..
7. You should provide an
extensive list of references comprising a combination of:
academic journal articles, textbooks, good quality periodicals such as FT or
WSJ or The Economist, etc. Good quality websites will be helpful, but please
refrain from using Wikipedia or Investopedia heavily in your work.
8. Check your upload access
at least one week prior to submission. If you have any queries regarding
submission, please contact our faculty admin team directly via BL-SEFL@anglia.ac.uk. More
submission guidance will be available on the submission point.
9. You should use either
Arial or Times New Roman 12 font sizes and use double spacing throughout. Use
`justified’ margin whenever possible and centre all graphs, charts, figures,
tables, etc. You should create your own small tables, rather than copying the
annual report for example.
Checklist before
submission
1. Have you read, understood and acted in accordance with the
referencing guidelines set out in the Harvard Reference Guide?
2. Where you have quoted directly from or where you have
paraphrased the work of others, have you acknowledged and appropriately
referenced the source of your quotation in the body of the text?
3. Have you placed all direct quotations in inverted commas?
4. Have you listed and correctly presented all your sources in the
reference list?
Answer preview for Choose FOUR categories from the list of five categories of financial ratios below and use ONE financial ratio from each category. Report on
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