Element 010 – End Term Assignment

3,000 Words (100%)

The assessment for this module consists of one element with final
submission date provided below.

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
£30,000,000 and £40,000,000 and has a life of ten years. The finance
department appraised some other similar investments before using
different investment appraisal techniques. The discount rate is 12% for
the Company (Ignore inflation and taxation).

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.

Required:

Suppose you are successfully appointed as the CFO for one of the
companies listed below:

 Associated British Foods;

 AstraZeneca;

 Barratt Developments;
 Melrose Industries;

 Diageo;

 Halma.

As the newly appointed CFO of your chosen company, you are required
to write a report to the senior management team - fully referenced,
and address the following:

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.

Note: Analyse your chosen financial ratios using information from

financial statements. Considering word limit, please
choose one financial ratio from the four different categories listed
above; therefore, you should focus on four ratios in total in your
analysis. Critical analysis of the four ratios under four categories is
required for a good work. Please critically evaluate past five-year firm
performance using your chosen ratios and discuss the problems and
limitations of financial ratios as a tool of financial analysis before
make recommendation to the board of directors. Use small tables,
diagrams and charts in your analysis and present
professionally. Financial ratios can be collected using Osiris, Fame,
annual report, or other professional resources. Compare with
competitors and industry will be helpful. Suggested word: 700-800
words.

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.

Note: Please present NPV and IRR results using small tables. You need
to make a decision on which investment appraisal format that you will
choose. The project will be based on your chosen company,
therefore, you have the flexibility to decide the project using your
estimate. The investment should be around £30m to £40m, but how the
money is invested would depend on the nature of the investment.
Sensitivity analysis will be helpful to analyse different scenarios for
the appraisal. Suggested word: 600-750 words.

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.

Note: Based on analyses of your chosen company, please identify a

target company in the real business world. Good work will provide
critical analysis of the deal, rather than provide some general
discussion without in-depth analysis. Good work will also link potential
implications from the deal with your chosen financial ratios discussed
in the financial performance section. Suggested word: 900-1000 words.

4. Appendix: Supporting information to help the senior management

team make their final decision. Present your own tables and
do not copy and paste an annual report in your appendix.

Assignment submission guidance

1. You should attach the Front Sheet before your own work, followed
by title page and content page before the main body of your work.

2. You should adhere to the 3,000 word limitation. Any misuse of

tables with aims to avoid word limit will be subject to penalty. There
is ±10% tolerance on word limit, but in worse scenarios of
deliberately using tables to avoid word limit could lead to more
penalty. There will be a 10% penalty if the assignment is too short.
Please indicate the word count on the Front Sheet.

3. Your Module Tutor is available to support you in preparing your

report. Conference session times for you to live chat with your
Module Tutor about the assessment will be posted on the
announcement page. As well, you are encouraged to email your
Module Tutor with any questions you have at any time. Please also
note that you are welcome to submit rough drafts of your work for
comments at any time up until the end of Week 10.

4. The word count excludes tables, charts, graphs, formulas,

appendices and reference list. In sum, the word count refers only to
the narratives. Table can be used to present numbers and some
brief points.

5. We treat assessment offence seriously at ARU (more information

is available
at http://web.anglia.ac.uk/anet/academic/qad/module_guide/modguid
e_assessmentoffences.php). All the resources must properly cited
in your assignment. The formatting must follow Harvard Referencing
guideline (6th Edition) for both the construction of the reference list
and the proper in-text citation formats – pay attention to §3.1 in
particular. You can obtain the guide
here: http://libweb.anglia.ac.uk/referencing/harvard.htm

6. You should provide an extensive list of references comprising a

combination of: academic journal articles, textbooks, good quality
periodicals such as FT or WSJ or The Economist. Good quality
websites will be helpful, but please refrain from using Wikipedia or
Investopedia heavily in your work.
7. You should use either Arial or Times New Roman 12 font sizes and
use double spacing throughout. Use `justified’ margin whenever
possible and centre all graphs, charts, figures, tables, etc.

8. Check your Turnitin access at least one week prior to

submission. If you have any queries regarding Turnitin submission,
please contact our faculty admin team directly. More submission
guidance will be available on Turnitin submission point.

Turnitin®UK Grademark assignments

The direct link to Turnitin® UK Grademark

is: http://www.turnitinuk.com

Front Sheet

1. This sheet must be attached in the front of your assignment.

Name of Module:

MOD004051 Finance for Decision SID Number:

Making

Title of Your Course and

Final Submission Date:
Year/Stage:

Actual word count: Extension Granted to (if any):

Checklist before submission

1. Have you read, understood and acted in accordance with the

referencing guidelines set out in the Harvard Reference Guide?

2. Where you have quoted directly from or where you have

paraphrased the work of others, have you acknowledged and
 appropriately referenced the source of your quotation in the body of
the text?

3. Have you placed all direct quotations in inverted commas?

4. Have you listed and correctly presented all your sources in the
reference list?

Declaration by the candidate

1. I declare that this assignment is my own work (or, in the case of

a group assignment, the work of my group), that it has not been
copied from elsewhere and that any extracts from books, papers or
other sources have been properly acknowledged as references or
quotations.

2. The work contains no material drawn from unattributed sources.

 Please tick the box to confirm acceptance of the above

declaration.
Date ________________________

Signature ________________________

Marking Criteria for Element 010 – End Term

Assignment 3000 Words

Learnin
g
Section Content Mark
Outcom
e

1. Introduction  Brief introduction of 5%

 the company that you
choose.

 A concise summary
of issues addressed in
the essay, your main
findings and the
structure of the
report.

 Choose one financi

al ratio
from four different
categories (focus on
four ratios in total) in
your analysis of
financial ratios and
evaluate ratio analysis
as a tool to assess
firm performance.

Evaluate financial  Discuss your

2. performance chosen financial ratios
25%
for past five years.

 Critically evaluate
various aspects of
financial position and
performance of the
Company.

 Analyse the
problems and
limitations of financial
ratios as a tool of
financial analysis.
  Critical evaluation
of NPV and IRR
techniques.

 Provide samples to
illustrate investment
appraisal results using
NPV and IRR
techniques at your
chosen format.
3. Investment
25%
appraisal
 Discuss potential
implications of the
investment on the
Company.

 Discuss risk and

uncertainty in
investment appraisal
and make your
recommendation.

4. Potential merger  Rationale for 30%

and acquisition choosing the target
company.

 The synergistic gain

of the acquisition for
the Company.

 Explanation and
evaluation of the
financing of the
proposed acquisition.

 Critically analyse
issues and challenges
in the acquisition
process including risk
 and uncertainty of the
acquisition.

 Critically discuss
potential implications
of the investment on
firm performance.

 Clearly presented
conclusions based on
the preceding
analysis.
5.
Conclusion 5%
 Make suggestions
and recommendations
based on your
judgement.

 Follow Harvard
Reference guide.

 Adequate
references and
properly referenced
6. Reference and
resources. 10%
presentation
 Use of journal
articles.

 Professional
presentation.

100
Total Marks: 1,2,3,4
%