REQUIREMENTS:

You are tasked with performing a detailed financial analysis of two Jamaican companies: Honey Bun Ltd and Consolidated Bakeries Ltd. More specifically, you are to prepare a single comprehensive report which addresses the following requirements:

1. Explain the value, purpose, and limitations of ratio analysis.

2. Explain the significance of ratio trend analysis.

3. Explain the significance of competitor ratio analysis.

4. Identify the industry within which both Honey Bun and Consolidated Bakeries operate, and provide a brief overview of this industry.

5. Provide separate company overviews for Honey Bun AND for Consolidated Bakeries. Use information from the chairmans and/or management reports, news reports, websites, analysts reviews, and other relevant sources to support your discussion. Also, outline the key successes and challenges faced by both companies in their financial year ending in 2021. Indicate any major operational or financial issues which arose during that year, why they arose, and how they were resolved.

6. Using the full list of ratios and formulas as outlined on the ratio analysis worksheet provided on Moodle, calculate each of the stated ratios for BOTH companies for the three (3) financial years ending in 2019, 2020, and 2021.

7. You are then to prepare a detailed trend analysis discussion for BOTH companies over the same period. Your analyses should reference the results of the ratios calculated and must incorporate the use of graphs/charts. Your discussion should go beyond simply stating the trends observed, as the majority of the marks will come from your ability to explain or justify the trends observed and discuss their implications for the business. You should utilise information from the notes to the financial statements, other sections of the annual reports, or from other relevant sources to support your analyses. This is especially crucial where you observe significant movements in any of the trends (whether positive or negative). The discussion of the trend for each ratio should be done in one to two well developed paragraphs, and each company should be discussed separately.

8. You are also to prepare a summary comparing and contrasting the general liquidity, solvency, profitability, asset management, and investment performance of BOTH companies.