Topic: Interpretation of Published Accounts
No# of Pages:
16 pages (4,000 words)
Subject Area: Finance
Paper Style: Harvard
No# of Sources Required: 11
Details:
Assessment criteria:
(i) Application of analytical tools 20%
(ii) Interpretation of financial information and ratios 35%
(iii) Industry Performance and Prospects 15%
(iv) Advice on investment decision 10%
(v) Structure, layout and presentation 10%
(vi) Harvard referencing, spelling and language used 10%Coursework Question
You are one of a team of investment analysts for World Wealth Management. Your role is to provide investment advice to high wealth individuals. Dave Jones lives in Coventry andhas been a client of your firm for many years and he has approached your manager for investment advice. Dave has a large portfolio of shares and is interested in broadening his portfolio by investing in the retail sector. He has identified two companies that he is interested in investing in-Dairy Farm International Group Plc and Marks &Spencers Group Plc. Dave's file has been passed to you by your manager and he has asked you to prepare a report for him. You have carried out some preliminary work and obtained access to the latest financial statements and share prices and dividends of the organisations for the last three accounting periods.
Required:
a) Carry out a financial analysis of both companies.
This analysis should include
I. A justification of the tools and the ratios that you have chosen (this can be incorporated into your main analysis).
II. Based on the financial analysis and ratios you have computed an evaluation of the financial performance and current financial position of both companies. This should include investor ratios.
III. All computations should be included in an appendix.
b) Using information from the FAME database and other appropriate sources evaluate the future prospects for each company.
c) Based on your assumption of Dave'sattitude to risk (which should be clearly stated), and supported by the results in (a) and (b) above, advise Dave on how he should proceed with his investment decision. Your advice should consider the advantages and disadvantages for Dave of investing in the shares of an overseas company.
Note - you are strongly advised to explore relevant and reliable information from the websites of the companies and databases available via Locate (e.g. FAME).
The full annual reports can be downloaded from:
http://www.dairyfarmgroup.com
http://corporate.marksandspencer.com/
You should download the last two annual reports of both companies. You will then be able to carry out analysis for their last three financial years.