An Analysis And Assessment Of The Entity’s Financial Performance And Position
Select a PLC for your assignment. The listed entity chosen must have published consolidated financial statements for an annual reporting period ended during the calendar year 2019. The financial statements must have been prepared in accordance with International Financial Reporting Standards. The entity should be engaged in commercial activities involving manufacturing, service provision, distribution, general trading, or any mix of these. The entity should NOT be primarily engaged in the financial services sector.
The basis of the project assumes that you are a potential investor and the purpose of the report is to evaluate the chosen entity as a potential investment opportunity. The report should address the following issues at a minimum:
- An analysis and assessment of the entity’s financial performance and position for the previous two years, based on the entity’s most recent financial statements. This should include:
- Full ratio analysis including the calculation of the key activity, liquidity, profitability, solvency and investment ratios for the two years. Please include a clear table showing full workings and assumptions if relevant.
- Interpretation and analysis of the above ratios and the interrelationship of any trends identified.
- Initial conclusion, based on the ratio analysis, on the financial position and performance of the company.
- Prepare a table which focuses exclusively on the following three key metrics for the entity:
- Cash Flow
- Operating Profit/Loss
- Earnings Per Share (EPS).
Critically assess the performance over the two years using these metrics and discuss the similarities and/or differences in the trend for each metric.
- Provide a critical review of other influencing factors in terms of a potential investment in this entity. Consider the additional narrative content provided in the published financial statements and in particular the directors’/chairman’s report and the Operating and Financial Review (OFR).
- Provide an overall conclusion on the investment decision, clearly outlining the positives and negatives of an investment in this entity and identifying any additional information which may be desirable.
