#urgent

Assessment Element 010 - END TERM ASSIGNMENT(100%)

Assessment brief 010: case study

After several rounds of interview, you are successfully appointed as the CFO of the Company. The Company

has enjoyed considerable success in recent years and the board of directors have decided to adopt a growth

strategy by making further investment in their current production line and acquiring an existing company in

their industry. As the newly appointed CFO of the Company, you are tasked to evaluate the performance of the

Company and help make a report to the board of directors with evaluation of the potential investment

opportunities.

The first investment under consideration is to make further investment in their current product, which needs

initial investment between 40,000,000 and 50,000,000 and has a life of 10 years. The finance department

appraised some other similar investments before using different investment appraisal techniques.

At the same time, the Company plans to acquire another company in the same industry in the near future.

However, the board of directors require more information for the potential target. You are tasked with the

responsibility of identifying a potential target company and preparing a report to the board of directors

justifying the choice of a target company and potential implications from mergers and acquisitions.

Required:

Suppose you are successfully appointed as the CFO for ONE of the listed companies below.

The Berkeley Group Holdings plc

InterContinental Hotels Group

Marks & Spencer Group plc

GlaxoSmithKline

Burberry Group PLC

Aviva

As the newly appointed CFO of your chosen company, you are required to make report to the senior

management team - fully referenced, and address the following:

1. Evaluate financial performance: Choose FOUR categories from the list of five categories of

financial ratios below and use ONE financial ratio from each category to assess the financial health

of your chosen company using past 5-year financial information:

a. Profitability

b. Efficiency

c. Liquidity

d. Financial gearing

e. Investment

Note: Analyse your chosen financial ratios using information from financial statements. Considering

word limit, please choose ONE financial ratio from FOUR different categories listed above;

therefore, you should focus on four ratios in total in this part of analysis. Critical analysis of the

four ratios under four categories is required for a good work. Please critically evaluate past five-year

firm performance, i.e., 2015-2019, using your chosen ratios and discuss the problems and limitations

of financial ratios as a tool of financial analysis before make recommendation to the board of directors.

using small tables, diagrams and charts in your analysis and present professionally.

Financial ratios can be collected using Osiris and Fame through ARU library

(https://anglia.libguides.com/az.php?a=o), annual reports or other professional resources.

Compare with competitors and industry will be helpful.

2. Investment appraisal: You plan to use NPV and IRR techniques to evaluate the project. Critically discuss

NPV and IRR techniques and the implications of the investment on the Company. Risk and uncertainty

in investment appraisal should be considered before you make recommendation. The discount rate is

12% for the Company (Ignore inflation and taxation).

Note: Please present NPV and IRR results using small tables. You need to make decision on which

investment appraisal format that you will choose. The project will be based on your chosen company,

therefore, you have the flexibility to decide the project using your ESTIMATE. The investment

should be around 40m to 50m, but how the money is invested would depend on the nature of the

investment. Sensitivity analysis will be helpful to analyse different scenarios for the appraisal.

.

3. Potential acquisition: After you identify a potential target company, you will address the following in

your report to the senior management team:

a. Rationale for choosing the target company

b. The synergistic gain of the acquisition for the Company

c. Proposed deal value and finance of the acquisition

d. The potential implications of such acquisition on firm performance

e. Challenges and risk assessment of the acquisition

Note: Based on analyses of your chosen company, please identify a target company in the real

business world. Good work will provide critical analysis of the deal, rather than provide some general

discussion without in-depth analysis. Good work will also link potential implications from the deal

with your chosen financial ratios discussed in the financial performance section.

4. Appendix:

Supporting information to help the senior management team make their final decision. Present your

own tables and using annual report in your appendix.