Evaluate the financial performance

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Reference no: EM131582400

Intended learning outcomes:

1. Evaluate the performance of a company using various financial analytical tools.

2. Analyse different patterns of cost behaviour and apply cost-volume-profit analysis to business decisions.

3. Select and apply investment appraisal techniques appropriately.

4. Evaluate the performance of business units using both financial and non-financial measures.

Q1. Sultan Investments has employed you to evaluate the financial performance of two companies listed in the Muscat Securities Market (MSM) by taking into consideration the following instructions.

Instructions:
a. Select two companies preferably from the same industry or sector (Other than Banking and Investment companies).
b. Collect financial reports of any two companies for two consecutive years.
c. Use annual financial statements for analysis. Avoid using quarterly statements.
d. Provide references for the data collected (use Coventry Harvard style of referencing). Company websites can also be used for data collection.
e. From the financial statements and additional information collected, complete the below mentioned tasks.

TASKS
1. Compute the following ratios for each year for two companies.
a. Liquidity Ratios
b. Profitability Ratios
c. Efficiency Ratios
d. Capital Structure Ratios (Gearing)
e. Market Ratios (dividend, PE etc.)

2. Based on the above computations and literature review; analyze the liquidity, profitability and efficiency position of the two companies. Which company is in a better financial position and why?

3. Based on the gearing and market ratios and other information available in the financial statements along with literature review, would you recommend buying these companies shares? Justify your recommendation.

Q2. Saud Bawan LLC is considering selecting one of the projects to be implemented to improve their revenues. They are providing details of the three projects to you and the rate of investment is assumed at 10%.

Particulars	Project A	Project B	Project C
Initial Cost	20,000	40,000	80,000
Year 1	8,000	7,000	31,000
Year 2	8,000	13,000	32,000
Year 3	5,000	16,000	30,000
Year 4	3,000	15,000	27,000

a. Evaluate the projects using Net present value method and Pay-back period method.

b. Based on the above evaluation and literature reviews, recommend one project and justify your suggestion.

c. Discuss the role of non-financial factors in investment appraisal decision making.

Q3: The following data is provided from the records of Sohar plastics LLC. The company is undergoing benchmarking exercise hence certain changes are suggested,

Details	Per unit (RO)
Materials	16
Conversion cost (variable)	12
Dealer's margin (10% of sales)	4
Selling price	40
Fixed cost	500,000
Present sales	90,000 units
Capacity utilisation	60%

a. The following suggestions are to be considered,

i. Reducing sales price by 5%
ii. Increasing dealer's margin by 25% of the existing rate.

b. Which of the two suggestions would you recommend if the company desires to maintain the present profit? Justify your suggestions.

c. Critically discuss the role of break-even point in decision making.

Reference no: EM131582400

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Reviews

len1582400

7/29/2017 12:57:58 AM

For a mark of >69% ? Show a thorough understanding of the purpose of the activity. ? Display knowledge of the major principles, theories, methodologies, and practices involved and an ability to apply them effectively. ? Provide evidence of wide reading, including academic journals. ? Demonstrate an ability to select critical points, evaluate them and communicate the conclusions effectively. ? Provide approaches that are creative, practicable, and supported. ? Provide a sound, supported critique of your own work. ? Provide sound and supported discussions of further research that may be needed. For a mark of 60-69% ? Show a clear understanding of the activity. ? Display knowledge of most of the principles, theories, methodologies, and practices involved and an ability to apply them effectively. ? Provide evidence of wide reading. ? Demonstrate an ability to select critical points and analyse them and draw sound conclusions. ? Provide approaches that are creative and pragmatic. ? Provide a supported critique of your own work. ? Provide supported, discussions of further research that may be needed.

len1582400

7/29/2017 12:57:41 AM

Student name Student ID Name of company (one) Name of company (two) Two consecutive year’s financial statements for both companies is available: (mention – Yes or No) 2. The report should have table of contents and appendices if any. 3. Appropriate references using Harvard style of referencing and in-text citations are mandatory. 4. The report to follow font style Times New Roman, font size 12 and text color black. 5. Submission should be through Turnitin and is subject to plagiarism and late submission policies of the college (Refer Student Manual) 6. Deadline for submission of assignment is 2nd. 7. A viva – voce may be conducted as per the discretion of the faculty and it carries no marks. 8. Marks awarded in the assessment is provisional till it is approved by the Exam Board 9. Marking

len1582400

7/29/2017 12:57:31 AM

1. Work proposal should be submitted as per the schedule given by the Module Leader. The template given below to be used for the submission of work proposal. Proposal has no marks and is used for formative feedback purpose. a. b. Students are requested to email the name of the two companies that they are choosing for completing the assignment. c. Please wait for approval and confirmation through email from module leader (teacher) about the selection of companies after the submission of proposal. d. Please use the following template for sending the mail to Module Leader. Students may submit their work proposal as soon as possible.

len1582400

7/29/2017 12:57:25 AM

Before i had talk about this assignment. So the box is the proposal and the another file is the assignment file. Please send the price. these are the 2 companies I had chose and the tutor could find the financial report Student name Student ID Name of company (one) Name of company (two) Two consecutive year’s financial statements for both companies is available: OMAN CERAMIC COMPANY (OMCI) RAYSUT CEMENT (RCCI) yes

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