Produce a financial analysis of a selected FTSE 100 company, in the role of an advisor for an investment bank

Here is a list of frequently asked questions about the assignment with answers, hope it helps!

1. Does it matter what year-end my chosen company has? A – No, it is just the most recent financial statements available. If you have a December year-end the company will have had almost a year, but this means you can bring in the current year performance into the forward-looking part of the report

. 2. Does my company have to be British? A – No, and many FTSE 100 companies are not British (or not solely British anyway). I have asked for FTSE 100 companies due to availability of information and to give a definitive list to choose from, I do not mind where the companies are based or operate.

3. Does my company have to use sterling? A – No, some of the companies may use USD for instance. This is fine, but you may want to think about the competitor (see below).

4. Does my competitor have to be FTSE 100? A – No, you just have to be able to obtain necessary information for them. This could be tricky if you choose a competitor that is a private business.

5. Does my competitor have to be British? A – No, I do not mind where they are based. However, I advise that they should report in the same currency as your chosen company, as otherwise overall comparisons regarding size etc. would be difficult, as exchange rates affect numbers presented.

6. Can I compare to more than one company? A – Yes, this is possible, if for instance your chosen company has a number of distinct business streams. However, be careful with your word count if you do this, and make sure that your report is coherent regarding competitor analysis.

7. Do I need to use interim financial information? A – If this is available (mid-year information released to the stock exchange), then I would suggest you look at it. Please also bear in mind that I want you to consider your company up until 30th November, so I still want you to look at share price movements etc., and link into anything in the press that you can see for your chosen company.

8. Which figure do I use for long-term debt in ROCE/ gearing? A – Long term debt is usually just the ‘borrowings’ figure in non-current liabilities. I would also include any non-current trade and other payables if they appear. Do not include items such as provisions, deferred tax or derivative liabilities as these are nothing to do with how a company is financed. If you see borrowings in current liabilities then these could also be included when calculating ratios, it is really up to you. 9. How do I present my ratios? A – Please present ratios in an appendix to you report (at the back), and show what figures you have used to calculate each ratio. Remember to include ratios on profitability, and solvency/investor to gain the full range of marks available.

10. Can I use pre-prepared ratios? A – Yes, this is fine, as long as these come from a reputable source. The marks in this assignment are for the analysis of the company rather than the calculation of ratios (although marks will be lost if the calculations are fundamentally wrong). If you do decide to use pre-prepared ratios, don’t waste time trying to reconcile these to your own calculations, just use whichever figures you think you can explain. 11. Are marks available for the presentation of my report? A – Yes, 10 marks are available for this, which is for overall presentation of the report and referencing. Pease ensure you have looked at the marking scheme on the assignment (which is included in the assignment brief here on Moodle), so you can see exactly how your assignment is going to be marked.