UNIVERSITY / INSTITUTE: University of Wolverhampton

CLASS / COURSE: Business School

QUESTION DESCRIPTION:

6000 words Financial Analysis of Sainsburry UK. 

You are to select a PLC that has a listing on a recognised stock exchange of your choice and agree this with the module tutor.

 

The company is seeking to raise 10% of its Net Assets Employed and as an investment analyst you have been asked to produce part of an overall assessment of whether it would be a good investment.

 

You have been asked to produce a Financial Analysis of the company based upon the following ratios for the company for the years 2012, 2007 and 2002;-

 

Return on Capital Employed

Asset Turnover

Operating Profit Margin

Gross Profit Margin

Return on Equity

Gearing

Interest Cover

PE Ratio

 

(you will need to show all relevant workings and supporting documentation). Your analysis will be based upon the ratios calculated but is also is to include an analysis of the company’s industry and a comparison of company performance with industry averages for the same years.  The second part of your report is to analyse whether it would be better to purchase ordinary shares or debentures in this company, based upon the company performance and capital structure.

 

Assignment Structure

·       Table of Contents

·       Executive Summary

·       Introduction

·       SectionOverview of the Company (The easiest source you can find is the accounts of company- its website for example. BUT I want you to see from OTHER DIFFERENT sources-e.g. analysts’ reports about the company. In other words, do some research about the company that arise some issues as its website always mention only how wonderful that company is). Give a story/range of information about the company including your views.

·       Section Ratio Analysis(what is the ration supposed to be telling you? What is the purpose of liquidity/ current ratios…? All the ratios you are asked for. Show me that you know what are these ratios for (i.e. spell out what are the ratios for/ their meanings and interpretations somewhere in your report- either in the main body or in the appendices).

-        Write Ratio Analysis in the main body (what is a ratio doing?(good or bad, what is the norm for this type of company or its competitors? Compare 2012 with the past 3 years for the same company AND also with other competitors/similar companies just for 2012. You can find   Industry Ratios in investors’ reports.) The comparison should answer the following questions:

*Is it better? Is it worse?

*Reasons?

*how can it be improved?

-Cross Reference some of the ratios. Try to link the ratios together.

-Think about the connection between the ratio and stocks (are they both high? If this is the case, what can you do to solve this problem-e.g. discounts?)

·       Section Overview/Summary of the company: key issues (either to be addressed or mentioning what this company is good at?

Selected company is Sainsburysof UK - http://www.sainsburys.co.uk

SOLUTION DESCRIPTION: Sainsbury UK has engaged me an independent investment analyst to carry out an Independent analysis of the proposal......

SUBJECTS / CATEGORIES:
1. Finance
2. Financial Management
3. Accounting

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