Financial analysis of a company
You have been asked by an investment manager (you client) to perform financial
analysis of a company and a main competitor in an industry of you choice (avoid
mining/resouces/ and financial services sectors)- Based on this analysis, you client
requires you to make a recommendation to:
1- Invest in the company-
2- Invest in the competitor.
3. Or, for whatever reason, invest in neither.
You have to submit a business style report containing the following:
1- BRIEF background information on the two companies including how they are placed
within the industry (approx 350 words)-
2- BRIEF industry trends and how well each company is placed to face these trends
given their strategic outlook (approx 65owords)-
3. A ratio analysis to investigate and (raw conclusions about performance of the
company and its competitor in the areas of (a) profitability, (B) liquidity, (0) working
capital management and (D) leverage and financial risk- Note: present tables with just
a- Conduct you ratio analysis over the most recent 3 year period for which full-year
financial information is available for.
b- Be smart about using ratios- For example: do not use 5 ratios to generate the same
c- In you analysis, identify reasons for any significant/unusual differences in numbers