Using fundamental analysis, compare and contrast the financial performance of a

Sri Lankan company over the last 3 years, e.g., a close reading of your chosen company's annual report. Develop a report to address the following areas.

Part A

(i). From the perspective of shareholders or managers and local communities or

suppliers assess the usefulness [Only two stakeholders from the above pairs] of the

information in the annual report for the stakeholders you have chosen. Analyse based

on the financial information provided in the annual report.

(ii). Comment on whether your chosen company is a limited company (provide the

reason) and discuss how the income statement and statement of financial position of

the selected company differ from other types of organization.

(iii). Why working capital (WC) is important for an organization? What recommendations

that you can provide to improve the working capital of the selected company? What's

the difference between WC and working capital cycle (WCC)? Analyse and identify

any issues related to the WCC of the selected company for last three years.

(iv) Analyse the sources of finances (internal and external) of the selected company of

last three years. Identify the advantages and disadvantages of the sources that the

company has used during last three years.

Part B

Assume that the selected company is planning to start a project worth more than 25M

which has a lifetime of 7 years. Prepare a cashflow forecast of this project. And based on

your forecast prepare the following. (Assume that 50% of the investment is from

borrowings)

a. Accounting rate of return

b. Payback period

c. Net Present Value

d. Internal Rate of Return

Based on your calculations, analyse the project's performance and recommend the

company about their project. (Consider the cost of capital is the same as the loan interest

rate)