As an MBA student you are interested in the shares and debentures of public limited companies. As a prudent investor you need to critically assess the value, to shareholder or debenture holder, of the information in the financial statement.
You are required to:
Take the most recent published financial statement of one of the following companies (Public Companies listed in London Stock Markets) Preferably “Shire PLC” or “TESCO”
1- Critically appraise what you see as the financial objectives of the organization and discuss how that satisfies your personal objectives.
Critically appraise the role played by an accountant in ensuring the achievement of the financial objectives.
2- Critically evaluate the contents of income statement, Balance sheet and the Cash flow statement as well as the information gathered by the stake holders from such statements.
3- Critically assess the performance of the company by using appropriate accounting ratios and investment appraisal methods.
Analyze the relationship between the performance of the company and of its current share price.
Attention should be given to the organization’s capital structure and its forward strategy. Conclude by deciding with reasons, whether you should invest in the company.
The Below text is what had been explained by the professor as a verbal detailed guidelines for the assignment:
Underlies the performance of the company & the current share price looking at the different share prices but here you are going to look at the profit & relating it to the company’s share price.
Please highlight the impact on the share price which is the profitability of the company and different share prices.
And the last part, you should be given an organization capital structure for the strategy to conclude the decision with reason whether you should invest in this company or ‘not’.
Therefore from your relationship & actual understanding of the market share/ price, looking at the investment ratios you decide whether you will invest in this company or ‘not’.
You should do it from the 5 years trading from 2013 – 2018. From London Stock exchange Note: This technique is called “Trend Analysis”.
Example: So if you are looking at a trend, for instance a technological company/ if you are looking at an average of that sector.
If you are looking at consumer goods the average of that sector. And then compare it to company in comparison to that particular sector.
And you are expected to do ratios by putting it in tables, graphs & then do the analysis.
And then final part would be the recommendation whether to invest or ‘not’.
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