Assignment Task :

Learning Outcomes 
Anglia Ruskin modules are taught on the basis of intended learning outcomes and, on successful completion of this module, you will be expected to be able to demonstrate you have met these outcomes.
1. Explore how financial information is provided and in what form for management decision making
2. Select, explain and apply accounting techniques to provide quantitative information for decision making
3. Critically assess information within the internal and external context of the required decision
4. Critically evaluate the role of financial information in the context of the whole organisation
 

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 prepare 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.

  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:

    1. Profitability

    2. Efficiency

    3. Liquidity

    4. Financial gearing

    5. Investment

  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).
  3. Potential acquisition: After you identify a potential target company, you will address the following in your report to the senior management team:

    1. Rationale for choosing the target company

    2. The synergistic gain of the acquisition for the Company

    3. Proposed deal value and finance of the acquisition

    4. The potential implications of such acquisition on firm performance

    5. Challenges and risk assessment of the acquisition

 

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  • Posted on : April 02nd, 2019
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