Gathering Financial Information for Business Decisions

Course: MSc Finance
Module: Financial Reporting
ASSIGNMENT 3: Gathering Financial Information for Business Decisions
TOPIC: The perspective of a selected private company/firm (i.e.,
case study) and its reaction to the impact of the pandemic
in 2020. What can be learned from the experience of this
company/firm?

This assessment is designed to assess your ability as outlined in the whole of the Module, with
special emphasis on learning outcomes 3, 4 and 5:

1. Strategically apply financing theories and models to business decisions, the analysis of financial data and the evaluation of business proposals.
2. Take a critical approach to the use of financial theories and models in the analysis of corporate finance structure, decision making and budgets to support business strategy.
3. Critically evaluate the strategic benefits of types of financing for business decisions and their impact on the organisation’s corporate financial structure.
4. Synthesise and critically discuss emerging themes and issues in performance measurement.
5. Synthesise key principles, trends and international issues in accounting and corporate finance.
   Assignment Topic
   The perspective of a selected private company/firm (i.e., case study) and its reaction to the impact of the pandemic in 2020. What can be learned from the experience of this company?
   Key Components and Task
   To research and prepare a critical analysis of financial information for a private company/firm and submit it as a formal essay. The essay will contain circa 3,000 words +/- 10%. To be written in third person. References to be in Harvard referencing style.
   For developing this essay, you must select ONE company/firm as a case study. Any company in any sector of industry and country could be a valid option.
   Before committing to focusing on this company, you will need to be sure there is full access to the company’s financial reports and statements (i.e., Balance Sheet, Income Statements and Cash Flow Statements). Commentary both from the company and from analysts outside the company will also be useful to guide the analysis.
   Each student is expected to demonstrate both their understanding of financial information from a managerial perspective, and a competent use of concepts and relationships in the analysis directed to a real company in its up-to-date environmental conditions.
   
   The essay report should summarise the following aspects of the company’s performance:
   1) Using financial reports data for a total of 5 years, 4 years pre-Covid-19 crisis (i.e., 2015-2019) AND Covid-19 crisis year (i.e., 2020). You are expected to focus your attention on the general strengths and weaknesses that the company had before the crisis, and any possible changes in the company circumstances during the crisis. Notice that as financial reports may not be complete for the whole year 2020, any partial reports and information could be used, and the constraints of the information made apparent in the “methodology” and the “analysis” section of the essay.

2) As the company selected as a case study may be a multinational corporation, you must pay attention that the selected company’s performance may differ from other companies headquartered in the same country because their revenues may depend on countries which
were less/more affected by the crisis. This should be an interesting point to develop by looking at the particular location of operations that have suffered more during the crisis, type of activities/operation in the company which have been more/less harmed, and to find out any possible variations in the short-term strategy of the company during 2020.
3) Clearly identify the specific financial and risk reports, accounts and ratios in the corresponding financial statements that comprise the relevant information for positive and negative consequences of the crisis versus the pre-crisis performance. Has the company changed its capital structure by taking/issuing more debt/equity? Has the company changed its Working Capital policies/ratios? Has the company fulfilled any investments during the crisis period or delayed investments which were planned in advance to 2020? Have the profitability indicators been acutely/slightly affected by the crisis?
4) Clearly identify the reports, accounts, ratios, and intelligence provided by analysts that incorporates relevant information about assistance/support received from government or central bank policies during the crisis. If commentaries are not clearly identified in the financial statements and accounts, you are expected to notice and remark possible reasons for the missing information/details.
5) Visibly ascertain the risk factors that the company should be surveying after the crisis (i.e., short-term and medium-term after the crisis), and relate each one of these risk factors to explicit financial reports, accounts and ratios that must be monitored by the corresponding financial manager, the executive and board of directors of the company, and any potential
investors and stakeholders.

Assignment Structure:
For the structure of the essay and guidelines to be followed is contained in document named: Essay Guidelines and Structure