Reference no: EM132290890 , Length: 1500 Words
Financial Decision Making Assignment -
Aim: The aim of the second assignment is to test your knowledge and understanding of key accounting and corporate finance concepts, theories and tools that can be used to critically analyse organizations. It will also test your ability to present non-financial information.
Required: You have been asked to write a report to the board of directors of one of the selected companies below as part of the interview process for your first appointment as a Finance Director of a company listed within Singapore Stock Exchange (SGX). The board of directors have asked you to write a report about your vision and strategic financial goals for the company.
The companies are within selected sectors. Assume that your selected company has great ambitions and plan to become the largest in its sector or to double its current market share in the next 5 years.
Outcome of the assignment / Conclusion: Write a report to the board of directors of one of the selected companies below as part of the interview process for your first appointment as a Finance Director of a SGX listed company (Remember you need to make an impression on the board of directors for you to be considered for the critical post of Finance Director)
SECTION A (around 2000 words)
Analyze the performance of your chosen company using relevant financial and non-financial ratios (5 years). Your analysis should include profit ratios, efficiency, liquidity and other ratios that you consider relevant.
1. Select a company form the list provided to you below (Singapore stock exchange (SGX) company ONLY).
2. Give an introduction of the selected company (about the product or services, location, turnover, number of employees). Also comment little bit on the major competitor for your company(~ 200 words)
3. Make a horizontal analysis and vertical analysis (of Profit and loss account and Balance sheet) for immediately preceding five years (2018, 2017, 2016, 2015, and 2014) Get a trend of the sales, profits, assets and liabilities. Comment on the trend (increase or decrease). Compare the trend to the industry (Sector) / GDP of Singapore (100 words).
Please refer to the slides that is published on Edmodo / for examples of horizontal analysis and vertical analysis (also attached in this sheet).
ALL RATIOS OF YOUR SELECTED COMPANY MUST BE COMPARED EITHER WITH INDUSTRY (SECTOR) AVERAGE OR WITH THE COMPETETOR.
4. Identify profits (100 words)
a. Comment on the economic condition (ups and downs in the market of your selected company) - Example: If you have selected Singapore airlines, then comment on the airline industry. (100 words)
b. For the preceding 5 years calculate the Financial ratios and comment on the ratios as shown below in sample analysis.
c. Use any of the below 4 ratios for commenting on profitability.
PROFITABILITY (Select any 4 from below) (COMPARE EITHER WITH INDUSTRY AVERAGE OR WITH THE COMPETETOR) (200 words)
- Gross profit ratio
- Net profit ratio
- Expense ratio
- Return on assets
- Return on Equity / Return on Investment
- Return on ordinary shareholders' funds
- Operating ratio
5. Identify Dividends (200 words)
a. For the preceding 5 years calculate the divided related ratios and comment on the ratios as shown below in sample analysis.
b. Use any of the below 4 ratios for commenting on dividends
DIVIDEND RATIOS (Select any 4 from below) (COMPARE EITHER WITH INDUSTRY AVERAGE OR WITH THE COMPETETOR)
- Dividend Yield ratio
- Dividend Payout ratio
- Price earnings ratio
- Earnings per share ratio
- Dividend Cover ratio
6. Identify stability and Liquidity (200 words)
a. Comment on company's short term and long term financial position.
b. For the preceding 5 years calculate the stability and liquidity ratios and comment on the ratios as shown below in sample analysis.
c. Use any of the below 4 ratios for commenting on stability and liquidity
Stability and Liquidity Ratios (Select any 4 from below) (COMPARE EITHER WITH INDUSTRY AVERAGE OR WITH THE COMPETETOR)
- Debt to Equity ratio
- Interest coverage ratio
- Net cash transition period ratio
- Gearing ratio
- Debt to market capitalization proportion ratio
- Current ratio or working capital ratio
- Quick ratio or acid test ratio
- Absolute liquid ratio
- Current cash debt coverage ratio
EFFICIENCY (Select any 4 from below) (COMPARE EITHER WITH INDUSTRY AVERAGE OR WITH THE COMPETETOR) (200 words)
- Asset Turnover ratio
- Current Asset turnover ratio
- Stock or inventory turnover ratio
- Debtor's turnover ratio
- Cash Cycle
- Creditor's turnover ratio
7. Also identify and comment on the following (COMPARE EITHER WITH INDUSTRY AVERAGE OR WITH THE COMPETETOR) (200 words)
- Returns on Investment
- Return on Assets
- Return on Equity
- Risk
8. Identify the asset value per share and the current market share price. (This will be available on the company website or Google out. The annual report will have the yearend high and low values). Comment on the share prices of the company. Is it linear with the stock exchange indicator (STI - Strait times Index) (200 words).
9. Consider non-financial (ratios) parameters like brand preference, customer retention and churn, customer experience, Innovation, customer service, KPI, SWOT, PESTLE, market share, customer loyalty, innovation, management capability, employee relations, quality and brand awareness and perceived value, CSR activities, sustainability activities, service quality, staff turnover, patents and trademarks, supply chain, R&D activities, etc....,
10. Make a comparative analysis, where-ever possible. (300 words).
Section B (around 500 words)
Critically evaluate the company's corporate governance compliance and its impact on the brand and reputation as reported in the press (print, online and social media).
Discuss the proposed medium term financial strategies for your selected company to become dominant in the industry / sector.
1. Refer the website of selected company or Google any information about the company performance or any news that has impact on the company financial performance (Example: If you have selected Singapore airlines, --- It acquired Tiger and Scoot which have substantial impact on SIA financials. Comment on the motives of acquisition). You need to provide the source of information. (100 words)
2. Any critics , its impact on the brand and reputation as reported in the press (print, online and social media). You need to provide the source of information. (100 words)
3. Refer to the corporate governance report of the company (Refer to the annual report of the company to access to this report) (100 words)
a. Identify the directors - write a bit on their role and their impact on the company.
b. Identify the non-executive directors - write a bit on their role and their impact on the company. DONOT JUST LIST THE DIRECTORS.
4. Based on the analysis of financial and non-financial parameters set your vision and strategic financial goals for the company.
Conclusion: Remember you need to make an impression on the board of directors for you to be considered for the critical post of Finance Director. The board of directors have asked you to write a report about your vision and strategic financial goals for the company in becoming a market leader in the sector in the future. (200 words)
NOTE - It is essential that all sources of information are correctly referenced using the Harvard system.
Word Limits - The word limit for this assignment is 2500 words (+/- 10%).
Attachment:- Assignment File.rar