Reference no: EM132368209
Assignment
Part 1 - Financing the Business
Data provided
Your client has approached you about a business the client would like to start. You will be provided with basic information about the clientâ??s proposed business.
Tasks required
Describe and discuss the various sources of finance available to the business, both in the starting up of the business and to finance future expansion.
Explain the advantages and disadvantages of the different sources of finance in different situations.
Make specific recommendations as to which sources of finance would be best for this business, both in the starting up of the business and to finance future expansion.
Part 2 - Preparing the Financial Statements
Data provided
Your clientâ??s business has now been up and running for one year. You will be provided with detailed financial data relating to the value of assets, liabilities and equity, as well as revenue and expenditure over the past year.
Tasks required
Prepare the Balance Sheet, Profit and Loss Statement and Statement of Cash Flows.
Part 3 - Financial Statement Analysis
Data provided
Another 3 years have passed. You will be provided with the firmâ??s most Balance Sheets, Profit and Loss Statemenst and Statements of Cash Flows for the past 3 years.
You will also be provided with the ratios for similar businesses (i.e. industry averages) for each of these ratios.
Tasks required
Calculate each of a set of specified financial ratios for the last three years.
Discuss any trends you have identified and discuss strengths and weaknesses compared to similar businesses.
Give an overall view of the financial health of the firm.
Part 4 (a) - Cost of Capital
Data provided
You will be provided with the firm's most recent Balance Sheet.
Tasks required
Calculate the firmâ??s Cost of Capital.
Part 4 (b) - Project Evaluation
Data provided
You will also be provided with information about a project the firm is planning to undertake.
Tasks required
Forecast future cash flows for the project
Calculate the NPV of the decision to undertake the project (using the firmâ??s cost of capital as the discount rate)
Make a recommendation as to whether or not the firm should undertake the project.