Financial Analysis Assignment

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Q1. Assume that you are a Financial Analyst working of a leading Auditing Firm. Evaluate the financial performance of a company listed in the Muscat Securities Market (MSM)/GCC Market by taking into consideration the following

instructions.

 Select a company listed in Muscat Securities Market Market ,You may refer to ]the company name is :   NATIONAL GAS 

 Collect annual financial reports of the chosen company for three consecutive years.

 Use ONLY annual financial statements for analysis. Avoid using quarterly statements.

 Provide references for the data collected (use Coventry Harvard style of referencing). Company websites can also be used for data collection.

 From the financial statements and additional information collected by you complete the below mentioned tasks.

 

  1. A. Prepare comparative income statements and balance sheet for 3 years using Horizontal and Vertical Analysis

techniques for the both income statements and balance sheet. (10 marks)

  1. On the basis of literature review and from the above computations analyses; Profitability position and Financialposition of the chosen company. Provide meaningful recommendations for the company to improve theProfitability position and financial position based on the analysis.

(Literature Review about the techniques used for analysis and recommendations

(profitability position- & financial position

 

 

 

 

 

 

 

 

 

Q2. City Cinemas is planning to expand and open new Cinemas in Sultanate of Oman. Currently they areconsidering two options, one is to start a new cinema in Sohar and other is to take over an existing cinema in Nizwa. But due to recent developments they will be able to fund only one project of the two as the overall revenue trends are subdued. Details of cash inflows for 5 years of the two projects along with additional information is given in the table below

 

 

Details New cinema at Sohar Take-over existing cinema at Nizwa
Consumer trends Growth expected at 10% Stagnated
Population growth 12% 5%
Competition Strong Moderate
Initial cost 500,000 500,000
Cash flows
YEAR 1 150,000 200,000
YEAR 2 160,000 185,000
YEAR 3 190,000 160,000
YEAR 4 175,000 175,000
YEAR 5 200,000 150,000

,

 

  1. Evaluate the projects using Internal Rate of Return method.
  2. Based on the above analysis and on the basis of the relevant literature review, which project wouldyou recommend and why. The students have to consider the non-financial factors provided in theabove scenario and other relevant non-financial factors while recommending a project.
  3. Based on appropriate literature review, analyse the non-financial factors provided in the above
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scenario and other relevant non-financial factors.

 

 

 

 

 

Q3. Your company, a leading fertilizer manufacturer has asked you to submit a cost-volume-profit analysis report for the two products being produced in your company

Particulars Product A Price per unit (RO) Product B Price per unit (RO)
Sales price 20 15
Material 10 9
Direct wages 3 2
Variable expenses 100% of direct wages 100% of direct wages
Fixed expenses RO 800

 

 

The following scenarios are predicted by the Management:

Scenario 1: 100 units of product A and 200 units of product B

Scenario 2: 150 units of product A and 150 units of product B

Scenario 3: 200 units of product A and 100 units of product B

You are required to:

  1. Compute the contribution per unit of both Product A and ProductFind out total contribution and profits for each of the scenario.
  2. In your opinion which is the most profitable scenario and justify your recommendation
  3. Evaluate the role of CVP analysis in taking business decisions with appropriate literature review.

 

Instruction

 

Cover page

Table of contents:

Introduction:

Overall introduction about the assignment. A short paragraph capturing all the points to be covered in

the assignment.

Question 1: (40 marks)

Introduction:

 A short paragraph covering the tasks involved in question no. 1

 A short profile about the selected company (short paragraph)

Task A: calculations (10 marks)

Prepare comparative income statements and balance sheet for 3 years using Horizontal and Vertical

Analysis techniques for the both income statements and balance sheet.

Income Statement – Profitability position

Vertical Analysis of Income Statement for three years:

 Vertical analysis table to be presented here.

Horizontal Analysis of Income Statement for three years:

 horizontal analysis table to be presented here

 Example: if you have selected the financial data of 2018, 2017 and 2016 then two tables to be

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presented. Table one – horizontal analysis of 2016 and 2017 and table two – horizontal analysis

of 2017 and 2018

Balance sheet – financial position

Vertical Analysis of Balance sheet for three years:

 Vertical analysis table to be presented here.

Horizontal Analysis of Balance sheet for three years:

 Horizontal analysis table to be presented here

 Example: if you have selected the financial data of 2018, 2017 and 2016 then two tables to be

presented. Table one – horizontal analysis of 2016 and 2017 and table two – horizontal analysis

of 2017 and 2018

Task B: Analysis and LR – 30 marks

On the basis of literature review and from the above computations analyse; Profitability position and

Financial position of the chosen company. Provide meaningful recommendations for the company to

improve the Profitability position and financial position based on the analysis.

Literature Review about the technique used (vertical and horizontal analysis) for calculations. – 10 marks

Profitability position: Analysis and recommendations based on calculations and with LR (LR could be

used for benchmarking/ comparison of similar industry across the globe/GCC etc) – 10 marks

Financial position: Analysis and recommendations based on calculations and with LR (LR could be used

for benchmarking/ comparison of similar industry across the globe/GCC etc) – 10 marks

Conclusion: a short paragraph about the overall position of the company.

Question 2: (25 marks)

Task A: Calculations (10 marks)

Evaluate the projects using Internal Rate of Return method.

IRR calculations to be provided here (including all steps involved in the calculations)

Task B: Recommendation with LR (10 marks)

Based on the above analysis and on the basis of the relevant literature review, which project would you

recommend and why. The students have to consider the non-financial factors provided in the above

scenario and other relevant non-financial factors while recommending a project.

 Literature review of the technique used

 Recommendations based on calculations, LR and Non- financial factors including factors

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mentioned in the scenario and other relevant non-financial factors.

Task C: Analysis with LR (5 marks)

Based on appropriate literature review, analyse the non-financial factors provided in the above scenario

and other relevant non-financial factors.

 Analysis based on literature review of the non-financial factors provided in scenario

 Analysis based on literature review of other relevant non-financial factors.

 

 

Question 3: (20 marks)

Task A: calculations (10 marks)

Compute the contribution per unit of both Product A and Product B. Find out total contribution and

profits for each of the scenario.

Provide the detailed calculations/ tables of the following,

 Contribution of Product A

 Contribution of product B

 Total contribution and profits for Scenario A

 Total contribution and profits for Scenario B

 Total contribution and profits for Scenario C

Task B: Discuss the most profitable scenario with justification (5 marks)

In your opinion which is the most profitable scenario and justify your recommendation.

Task C: role of CVP analysis with LR (5 marks)

Evaluate the role of CVP analysis in taking business decisions with appropriate literature review.

Reflection report on Industry Guest Lecture: (5 marks)

Your reflection report may cover the following,

 Introduction – brief profile of the Industry Guest Speaker

 Reflection/ Your understanding of all points mentioned/ covered by the Industry Guest Speaker.

 Reflection/ Your understanding of the Question & Answers session

 Any other relevant point covered in the speech.

 Conclusion

List of references: Include all references (text book, Journals/ Research articles, websites etc) and style

prescribed in CU Harvard Style referencing for both in-text citations and references. Pls ensure that you

have provided the reference for all your in-text citations used in your assignment.

Appendix:

  1. Student declaration form – mandatory
  2. Financial statements downloaded from the MSM website. Pls insert the financial statements as

files (both word format and PDF acceptable) – mandatory

  1. Any working notes or calculations which are part of the assignment – mandatory
  2. Any other relevant documents if necessary

Last Updated on March 29, 2019 by EssayPro